Compliance Regulations in Monaco: Managing Conflicts of Interest

Introduction

In line with Monegasque regulations, particularly Law No. 1.338 of September 7, 2007 on Financial Activities, banks in Monaco are required to comply with prudential and good conduct rules aimed at protecting investors and ensuring the regularity of transactions.

The Importance of Conflict of Interest Management

A conflict of interest can arise when a professional situation influences or alters an individual’s independence or integrity due to personal considerations or pressure from a third party. Common situations that may generate conflicts include:

• Situations where a bank or its related parties stand to gain financially at the expense of a client
• Situations where they have an interest in the outcome of a service provided to a client that differs from the client’s interests

CFM Indosuez Wealth’s Approach to Conflict of Interest Management

CFM Indosuez Wealth has implemented measures to identify and manage potential conflicts of interest, including:

• Establishing an organizational structure, internal procedures, and controls to detect and manage potential conflicts
• Providing staff training through its Code of Conduct and related presentations
• Vigilant monitoring by the Compliance Department, particularly during participation in committees that govern the bank’s operations

Minimizing Conflicts of Interest

To minimize the potential for conflicts, CFM Indosuez Wealth has implemented an appropriate segregation of tasks and activities, including:

• Ensuring that members of the Board of Directors and Authorized Management report all mandates they hold and specify why they do not believe they are affected by conflicts of interest
• Paying particular attention to relationships with related parties, including employees, shareholders, directors, and members of boards of directors

Primacy of Client Interests

The management of conflicts of interest at CFM Indosuez Wealth is based on the fundamental principle of primacy of the client’s interests over those of the bank or its linked parties. In cases where a conflict arises between two clients, the bank refers to the principles of proportionality and, where applicable, primacy of the interests of the client with whom it has made the longest-standing commitments.

Conflict Management Process

The Head of Compliance is responsible for putting these principles into practice, and conflicts are managed through a process that includes:

• Reporting conflicts to line managers and the Head of Compliance
• Proposing solutions based on the bank’s policies
• Recording conflicts in a specific register

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

Conclusion

As such, banks in Monaco are under pressure to maintain high standards of compliance and transparency in managing conflicts of interest, ensuring that their operations remain fair and ethical.