Principles for dealing with conflicts of interest
(Version October 2017) 

As a securities service company we are required to act exclusively in the interests of our investors and carry out our activities honestly, with the required care, conscientiousness and probity, and for this purpose act in the best interests of our clients and the integrity of the market. 

In view of our focused business model with a limited number of services, conflicts of interest when carrying out our activities are manageable, but cannot always be ruled out in individual cases.

Services

The focal point of the services we provide is individual financial portfolio management and investment advice for institutional investors, primarily within the scope of insourcing portfolio management of capital management companies for investment funds. In addition, 7orca Asset Management AG can also broker investments and acquisitions. Private investors are usually only indirect recipients of our services, such as through acquiring shares in investment funds for whose portfolio management we are responsible.

We have specialised in rules-based portfolio management and focus on overlay management, currency and value guarantee management, and short-vola strategies. Within this framework, we use in particular exchange-traded derivatives (such as futures and options) and off-exchange-traded (“OTC”) derivatives, such as forward exchange transactions.

We commission the following important services from third parties: internal audit, external audit, legal advice, tax consulting, insurance services, data supply and IT services.

Shareholders

In addition to the founders, a pension fund and a financial services provider that also specialise in institutional investors hold minority shareholdings in the company. 7ORCA Asset Management does not hold any investments in other companies.

In accordance with the guidelines of the German Securities Trading Act, we will inform you below about our precautions when dealing with conflicts of interest.

Possible conflicts of interest

Interests of our clients or investors could collide with the following interests:

• the interests of 7orca Asset Management or its affiliates;
• the interests of our employees;
• the interests of other clients or investors.

Conflicts of interest between our company, capital management companies and the custodians of our insourcing mandates are also conceivable. 

Conflicts of interest can result from, for example

• when receiving or granting gratuities (such as when selecting brokers/counterparties or financial instruments)
• from incentive systems for managers or employees of the company
• personal transactions with assets that are held in investment funds whose portfolio we manage
• reallocations in investment funds;
• transactions between investment funds administered by our company and/or individual portfolios;
• consolidating several orders (“block trades”);
• commissioning closely affiliated companies and people,
• individual investments of considerable extent;
• frequent trading;
• exploiting insider information

Measures to prevent, control and monitor these possible conflicts of interest

7orca Asset Management AG has taken organisational and administrative precautions to identify, prevent, settle, control and observe/monitor conflicts of interest in order to prevent conflicts of interest from causing considerable damage to the interests of investment funds or investors.

In particular, we have set up a compliance organisation that monitors our precautions against conflicts of interest regardless of the business field and regularly train all employees concerning legal requirements and internal company directives. 

If it is possible in a company of our size, we create confidentiality areas and information barriers between individual business areas and in relationship to the third parties we commission. Our risk controlling system is subject to special protective precautions against conflicts of interest.

If the organisational precautions taken by us to identify, prevent, settle and observe conflicts of interest to avoid an impairment of investor interests are not sufficient, we will inform investors in advance and develop countermeasures.

We have also taken the following measures in detail:

• our remuneration system does not create any incentive to place personal interests above those of our investors and clients;
• we have set up rules for personal transactions that are continuously monitored by the Compliance department and lead to a blocked list, which prohibits personal transactions with certain asset items (depending on the investment strategy we offer), in order to counter possible conflicts of interest;
• we have ruled out the acceptance of third party payments (trailer fees, reimbursements, other payments). One exception is low-value, non-monetary gratuities, which we may accept under certain conditions and that are documented in a directory of gratuities;
• we continuously monitor the transaction frequency in the investment funds we manage in order to prevent investors from experiencing disadvantageous reallocations in the individual portfolios or insourcing mandates;
• we have published our Execution Principles;
• we do not do any own-account business whatsoever – especially not with the investment funds or individual portfolios we manage – and only carry out securities transactions between different clients of ours at their wish;
• the consolidation of several orders (“block trades”) is done on the basis of a standard assignment principle;
• if we commission closely affiliated companies or people (in particular our shareholders), (e.g. with the role of an asset manager, investment advisor, broker or custodian), we will disclose this to investors;
• we only use our own financial instruments or those from shareholder companies within the scope of investment advice or financial portfolio management at the explicit wish of the client;

If our company cannot avoid conflicts of interests, we will advise you of the type of conflict and its cause.

Disclosure report according to the Institutsvergütungsverordnung and in conjunction with Article 450 of the EU-Capital Requirements Regulation 575/2013
(Last updated 15/03/2018 )

7orca Asset Management AG is not a prominent institution within the meaning of the Institutsvergütungsverordnung (InstVergVO), meaning that the presentation and scope of information relating to our remuneration policy conform to article 450 of the EU CRR no. 575/2013 without having to fulfil the additional provisions of paragraph 16 I and II of the InstVergVO. Although the company does not qualify as a CRR investment firm and hence not as an institute within the meaning of EU CRR no. 575/2013, the analogous application of article 450 comes into effect in accordance with paragraph 1a II of the German Banking Act (Kreditwesengesetz – KWG). 

7orca Asset Management AG specialises in financial portfolio management for institutional clients and generally provides its services to capital management companies for the account of investment funds. In so doing, we predominantly pursue systematically and quantitatively oriented investment strategies. 

The company´s remuneration principles meet the requirements of the German Banking Act (KWG) and those of MaComp (Mindestanforderungen Compliance) – minimum requirements for compliance – which were communicated to each employee at the end of his/her employment contract. Presently, the company employs another nine workers in addition to the three members of the executive board. All members of the executive board as well as the persons involved in portfolio management are relevant persons according to the (MaComp). 

The executive board is responsible for the appropriate design and implementation of the remuneration system as well as the avoidance of remuneration-related risks, in as far as the remuneration of the the other employees is concerned. In contrast the supervisory board of the company is responsible for the remuneration principles of the executive board in a corresponding manner. 

The remuneration principles are reviewed at least once a year with the participation of the compliance officer, and they currently contain a fixed and a variable component.Bonus regulations for all employees starting from a low threshold value are subject to the approval by the supervisory board. 

The remuneration structure and implementation plan must be aligned with our business and risk policy, and hence be of benefit to the sustainable development of the company. Consequently, the payment of a variable remuneration is always subject to the company havingadequate capital and liquidity. 

A variable remuneration scheme did not take effect in 2017 due to the fact that the company was at an early stage of development. Even beyond 2017, the essential remuneration component for all employees is fixed and no significant dependencies on bonus payments arise. In general the variable remuneration depends on the overall success of the company as a whole and does not lead to disproportionate risks. This is also accommodated by the fact that the strategies we pursue are strongly rule-based and are not dependent on individual portfolio managers for their implementation. 

The fixed remuneration of employees is paid in twelve monthly payments per year and is calculated in such a manner that no incentives for disproportionately risky transactions are created. The variable remuneration is paid annually, where payment is applicable, and is capped in accordance with the provisions of the German Banking Act (KWG).

Execution Venues

The files that can be downloaded below contain information in German on the identity of the most important trading venues and on the quality of execution.

Meldung Ausführungsplätze 2017.pdf
Informationen zu Handelsplätzen.pdf
Ausführungsplätze 2018.pdf
Informationen zu Handelsplätzen 2018.pdf

Complaint Management

We aim to meet the requirements and standards of our customers and investors with our services and products at any time. If there is nevertheless cause for complaint, you can contact us free of charge electronically, in writing or verbally.

We have established effective and transparent complaint management procedures. This includes confirming receipt of a complaint without delay and providing you with information on how the complaint is handled. All complaints are immediately brought to the attention of the board.