• Policy

MAIQ Capital Trust

(SEBI Registration No: IN/AIF3/22-23/1108)

Note:
This policy provides a set of principles through which the Investment Manager intends to manage any potential conflicts of interest, the Investment Manager intends that this document should be for guidance only. Accordingly, this document is being provided (to the extent permitted by law) without liability. This document is not interested to create their party rights or duties, nor is it intended to form part of any contract between the investment Manager and any investor in the Trust including the Fund. This document has been prepared by MAIQ Investment Advisors LLP (Formerly Known as Chatushtay Investment Advisors LLP). No part of this document may be reproduced or copied without prior written approval of designated partners/partners of MAIQ Investment Advisors LLP.

 

Background:

This Policy shall be called as Policy on Management of Conflict of Interests (“Policy”)

MAIQ Growth Scheme Long Only (“Fund”) is a scheme of the MAIQ Capital Trust (“Trust”), a contributory, irrevocable, non-discretionary and a determinate trust which is registered in India. The Trust is registered with SEBI under the AIF Regulations and is classified as a Category III AIF and the Fund is a scheme of the Trust. The Trust and its Schemes as it may launch from time to time, shall be managed by the Investment Manager pursuant to the Investment Management Agreement. The Fund has been registered as a Category III AIF with SEBI vide registration number SEBI vide registration number IN/AIF3/22-23/1108 dated 19th July, 2022.

MAIQ Investment Advisors LLP (Formerly Known as Chatushtay Investment Advisors LLP) (“Investment Manager” or “Company”), a limited liability partnership incorporated under the Limited Liability Partnership Act, 2008, having its registered address at B/203, Sai Anand CHS Ltd, Anand Nagar, Dahisar, Dahisar East, Mumbai-400068, Maharashtra, India appointed by the Trustee as Investment Manager in respect of the Fund under the Investment Management Agreement.

The primary object of the Fund is to carry on the activity of a ‘Category III AIF’ and raise resources from investors including investors who are resident in India and investors who are resident outside India and to create capital appreciation for the Investors by investing in listed equity and equity linked instruments, corporate bonds (rated or unrated), fixed income securities, securitized debt and in such other securities, listed, quoted or traded on any stock exchange or over the counter, as permissible under applicable law. The Fund is sector agnostic and shall diversify its investments in all sectors with investments in Portfolio Entities in India. Without limiting the generality of the foregoing, in relation to debt investments

Orbis Trusteeship Services Private Limited being the trustee of the Fund has delegated its powers to MAIQ Investment Advisors LLP (Formerly Known as Chatushtay Investment Advisors LLP) (the “Investment Manager”) to make investment and disinvestment decisions on behalf of the Fund vide Investment Management Agreement dated 10th November, 2022 (the “IMA”)

This Policy is in line with the requirements of SEBI (Alternative Investment Funds) Regulations, 2012 and SEBI circular no. CIR/MIRSD/5/2013 dated August 27, 2013 for dealing with Conflicts of Interest of Intermediaries, Recognised Stock Exchanges, Recognised Clearing Corporations, Depositories and their Associated Persons in Securities Market. For maintaining high professional standards, an effective policy on conflict management is critical to protect the interest of the investors of the Fund and, inter alia to ensure that standards of due diligence are not impaired by potential conflict of interests. The Investment manager is therefore required to maintain and operate effective organisational and administrative arrangements with a view to taking all reasonable steps to identify, monitor and manage conflict of interests

The Private Placement Memorandum (PPM) of the Fund, IMA, Contribution Agreement(s) and Trust Deed shall collectively be referred to as the “Fund Documents”. Capitalized terms not defined herein shall have the meaning as set out in the Fund’s Private Placement Memorandum.

Applicability:

(1)This Policy shall be applicable to the Investment Manager, w.e.f, 22nd December, 2022.
(2)     This Policy shall be applicable to all the Partner/Designated Partner, and all the employees of the LLP.

Purpose of the policy:

The Conflict of Interest Policy aims to ensure that the Investors of the Fund are treated fairly and at the highest level of integrity and that their interests are protected at all times. This policy lays down the framework to identify and adequately manage conflict of interest thereby safeguarding the investor’s interest. This policy outlines the framework for identifying, avoiding and managing conflict of interests.

Definition:

Conflict of interest is a situation in which a party to a transaction can potentially gain by taking actions that adversely affect its counterparty.

 Conflict of interest is also defined as a situation where the interests of a market intermediary may be inconsistent with, or may diverge from, those of its clients, investors, or others, or where the interests of one group of clients conflict with those of another group

The Conflict of Interest may arise between:

(a) The LLP and a Client
(b) The LLP and Designated Partners, Partners/employee and a Client
(c)Two or more Clients of the LLP in the course of providing services to these Clients
(d) Potential/past clients

For the purpose of this policy, Clients include:

  • Existing Clients/Investors of the Fund and the LLP;
  • Potential Clients (where the Fund and the LLP is seeking individually to enter into a contractual relationship in respect of Regulated Business services); and
  • Past Clients where fiduciary or other duties remain in place.

It would be impractical to attempt to list all possible situations in which a conflict of interest may arise, however, few of the common examples may be referred to as follows:

(i)  The Designated Partners, Partners and employee shall not engage in any business, relationship or activity which might conflict with the interest of the LLP. A conflict of interest, actual or potential, may arise where directly or indirectly

  • the Designated Partners, Partners /Employee/Relatives of the Designated Partners, Partners engages in a business, relationship or activity with anyone who is a party to the transaction with the LLP.
  • the Designated Partners, Partners /Employee is in a position to derive an improper benefit personally or to any of his/her relatives by making or influencing decisions relating to any transactions

(iii)  Any employee or his/her relatives holds partnership in other LLP

(iv) Designated Partners, Partners or employee or his relatives influence the composition of the  Designated Partners, Partners /s of a LLP

Procedures:

(1)  Identification of conflict of interests:

Conflicts of interest need to be identified in the process of decision making and to be assessed prior to the engagement of the transaction.

In identifying conflicts of interest, the LLP shall consider all of the factual circumstances where the LLP or Partners or employee:

(a) is likely to make a financial gain, or avoid a financial loss, at the expense of the Client;
(b) has an interest in the outcome of a service provided to the Client or of a transaction carried out on behalf of the Client, which is distinct from the Client’s interest in that outcome;
(c) has a financial or other incentive to favour the interest of one Client over another;
(d) Carries out the same business as the Client; or
(e) Receives from a person other than a Client an inducement in relation to a service provided to a Client, in the form of monies, goods or services, other than the standard commission or fee for that service

  (2)  Management of Conflicts:

  • The Compliance Officer shall monitor the implementation and effectiveness of Chinese wall, wherever applicable. The Compliance Officer shall be responsible for ensuring that ‘Head of Department (HODs) and Key Managerial Personnel (KMPs) or Specified Employees submits Conflicts of Interest declaration with regard to conflict of interest, if any. (Format annexed as Annexure A)
  • Specified Employees are also responsible to bring conflicts of interest to the attention of the Compliance Officer as and when they arise and update their conflicts declaration accordingly.
  • In case of any conflict, the Compliance Officer shall submit his/her declaration to the Designated Partners/Partners of the LLP,
  • The Compliance Officer must retain a copy of the completed and signed Declarations submitted by Specified Employees.
  • Where necessary, director/employee may be asked to step aside from working on a specific transaction or participation in the decision making of the transaction
  • The Designated Partners/Partners/employee shall promptly make full and fair disclosure of any matter that could be expected to impair their objectivity or interfere with duties to its clients, or prospective clients including any transaction or relationship that could be deemed as a conflict. Every Designated Partners/Partners employee is expected to avoid any outside activity, financial interest or relationship that may present a possible conflict of interests. No Designated Partners/Partners /employee may engage in any activity that involves any conflict except with specific prior approval in accordance with procedures set out in this Policy
  • Review and implementation of additional control measures/disclosures as may be required
  • The Designated Partners, Partners /Advisory Committee (as may be applicable respectively) shall take a decision on whether the transactions can be undertaken, where conflict of interest is involved and the manner to deal with it.

Measures to avoid or to deal Conflict of Interests:

Rules and Regulations:

The conflicts of interest may arise in relation to the various activities carried out by the Sponsor, Investment Manager and their respective affiliates/group entities, Designated Partners, Partners Directors, officers, employees, representatives and agents, Investment Committee or any other committee set up for the Fund vis-à-vis the activities of the Fund.

Some of the measures the Investment Manager will adopt to managed identified conflicts are set out below. The Investment Manager will take reasonable care that, in relation to each identified conflict are set out below. The Investment Manager will take reasonable care that, in relation to each identified conflict, it acts independently to avoid material risk to the investor’s interests. The LLP shall put in place the following arrangements to manage the Conflict of Interest promptly and fairly:

  • Maintain high standards of integrity in the conduct of their business.
  • Ensure fair treatment of their Clients and not discriminate amongst them.
  • Ensure that their personal interest does not, at any time conflict with their duty to their Clients and Client’s interest always takes primacy in their advice, investment decisions and transactions.
  • Make appropriate disclosure to the clients of possible source or potential areas on conflict of interest which would impair the ability to render fair, objective and unbiased services.
  • Endeavour to reduce opportunities for conflict through prescriptive measures such as through information barriers to block or hinder the flow of information from one department to another etc.
  • Not deal in securities while in possession of material unpublished information.
  • Not in any way contribute to manipulate the demand for or supply of securities in the market or to influence prices of securities.
  • Not have an incentive structure that encourages sale of products not suiting the risk profile of their clients.
  • Not utilise information received from clients or pertaining to them, obtained as a result of their dealings, for their personal interest.
  • Not share information received from Clients or pertaining to them, obtained as a result of their dealings, for personal interest.
  • The Investment Manager will have regard to its obligations under the Fund Documents and will act in the best interests of the investors in the Fund.
  • The Investment Manager will make efforts to see that any transaction involving a potential conflict of interest will be effected on terms that are not less favourable to the investors in the Fund that if the potential conflict had not existed. The Investment manager will place significant emphasis on its strong compliance culture, and the efficient operation of systems and controls, to manage issues such as conflicts of interest.
  • The Investment Manager will take appropriate measures intended to assure that it will not unfairly profit from any transaction between the Interested Parties and the Fund and all such transactions shall strictly be done on an arm’s length basis.
  • The Investment Manager will make reasonable efforts to apportion or allocate business opportunities among persons or entities to or with which they have fiduciary duties and other relationships on a basis that is as fair and equitable as possible to each of such persons or entities, including the Fund.
  • Independence of the Investment Committee shall be maintained at all times,
  • All conflicted transactions shall necessarily require prior approval of the Advisory Committee. In case where any of the members of Advisory Committee are interested parties, they shall recuse themselves from such a meeting and their vote and opinion shall not be considered in such a decision.
  • Any conflicting duties are properly segregated.
  • Strictly implement and abide by the LLP’s Code of Conduct for Prohibition of Insider Trading which has inter alia mandated the following:
    • Appropriate Restrictions on transactions in securities while handling a client in respect of such security so as to avoid any conflict.
    • Restrictions on communication of material unpublished price sensitive information while dealing in securities on behalf of others.

The LLP shall adhere to all the applicable rules and regulations and any amendments made thereof from time to time with respect to the conflict of interest.

Reporting:

The Compliance Officer shall confirm the compliance with the policy and report to the  designated partners/partners on a half yearly basis.

Failure to Comply:

Any non-Compliance with this policy may be considered to be misconduct and may be subject to disciplinary action and shall be referred to the designated partners/partners.

Deviation from Policy:

Any request for deviation from this Policy, which may become necessary due to practical difficulties in implementation or otherwise, shall be referred to the Compliance Officer.

Review of the Policy:

The Designated Partners, Partners shall periodically review the effectiveness of this policy.

Declaration of Interests

To,
The Compliance Officer,
  [●]
I hereby declare that：

  •  I have no pecuniary or other personal interest, direct or indirect, in any matter that raises or may raise a conflict with my duties as employee of  [●]  (the LLP).
  • I have pecuniary or other personal interest, direct or indirect, in certain matter that raises or may raise a conflict with my duties as an employee of  [●] (the LLP)

The particulars of such matter are stated below：

________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________

I also acknowledge that I shall make another declaration to state any change in any matter contained in this declaration within one month after the change occurs and shall provide further information on the particulars contained in this declaration if so required by the LLP

 Signature     :
Name               :
Department       :
Date                 :

Note：
(a) Please put a “P” in the appropriate box
(b) Please continue on a supplementary sheet if necessary

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