Compliance Training for Banks in Monaco: Managing Conflicts of Interest

Background

The financial industry in Monaco has been taking measures to strengthen its stance on conflicts of interest (COI) management. In response to this growing concern, Crédit Agricole Monnaie (CFM Indosuez Wealth), a prominent bank in the principality, has launched an initiative to provide compliance training for its staff on managing COIs.

Regulatory Requirements

According to Monegasque regulations, authorized companies like CFM Indosuez Wealth are required to comply with prudential and good conduct rules defined by the Sovereign Order. Specifically, Article 7 of Sovereign Order No. 1.284 stipulates that banks must act with loyalty and fairness in the best interests of clients and ensure the regularity of transactions.

What is a Conflict of Interest?

A conflict of interest is defined as any professional situation where a person’s discretion or decision-making power may be influenced by personal considerations or pressure from a third party. Situations that may generate COIs include, but are not limited to:

• Situations where the bank or an individual related to it stands to gain financially at the expense of a client.

Identifying and Managing Conflicts

CFM Indosuez Wealth has put in place an organizational structure and internal procedures to detect and manage conflicts. The bank also conducts staff training through its Code of Conduct and presentations to minimize the risk of COIs. Additionally, the Compliance Department is vigilant in detecting conflicts during participation in various committees that govern the bank’s operations.

Managing Conflicts

When a conflict arises, the bank must refer to the principle of primacy of the client’s interests over those of the bank or individual linked to it. The Head of Compliance is responsible for managing COIs and proposes solutions based on principles of:

• Elimination
• Abstention
• Informing clients

The bank also records conflicts in a specific register and proposes corrective actions to avoid similar situations.

Initiative Objectives

Through this initiative, CFM Indosuez Wealth aims to inform its clients of the possibility of COIs arising and provide them with an opportunity to refer to a specialized function within the bank that ensures compliance with fundamental ethical principles.