Investment Research and Conflicts of Interest

Introduction

When producing investment research WH Ireland Ltd (WHI) has due regard to the following FSA Principles for Business:

Principle 6 - due regard to customers’ interests and treat them fairly.
Principle 7 - communications with customers should be clear, fair and not misleading.

Furthermore, the following principles are also considered:

Principle 1 - the firm must act with integrity.
Principle 2 - the firm must act with due care, skill and diligence.
Principle 5 - High standards of market conduct must be maintained at all times.

Finally, Principle 8 states that the firm must manage conflicts of interest fairly, both between itself and its customers, and between a customer and another client.

Senior management of WHI are required to ensure that the firm’s systems, controls and procedures are sufficiently robust and adequate to identify and manage conflicts of interest which arise in relation to investment research.

House Stocks

WHI may, from time to time, produce research on companies when WHI is, or may become engaged as, broker, financial adviser or Nomad. Because of the inevitable contact of our analysts with existing and prospective corporate clients, we cannot present such research as being impartial.

All such research published and distributed by the firm shall include the following disclaimer: “W H Ireland is not holding out this research to be impartial and it should not be relied upon to be independent or objective”.

This should be included on the front page of any research published on house stocks.

The nature of the relationship between WHI and the corporate client should also be fully disclosed on the front page of the research note.

Where expenses are re-imbursed by a company to WHI, in respect of research undertaken for that company, or WHI are paid to undertake research on a particular company, this research will be similarly classified as non-impartial.

Non-House Stocks

WHI research on non-house stocks will normally be classified as impartial because our analysts do not generally owe any duties to the companies covered by the research.

Organisation of WHI

WHI is divided into departments, with the corporate finance department operating behind a Chinese Wall, separate from other departments such as research and broking. The Chinese Wall includes physical and other barriers (e.g. password controlled computer files).

There will be occasions when analysts and brokers are brought over the wall with confidential and price-sensitive information disclosed to them.

Supervision & Management of Analysts

All analysts report to the Head of Research, who in turn reports to the Chief Executive Officer. This reporting line is independent of Corporate Finance, Sales and Trading. The Head of Research is required to formally sign off all research prior to its distribution.

In the absence of the Head of Research, research must be formally signed off by either the Chief Executive Officer or the Head of Institutional Research. All research should then be signed off by Compliance prior to publication.

Decisions on the content of research are to be taken only by the analyst responsible for the research. Editorial control over draft research is not given to Corporate Finance or the subject company, or anyone else whose role could conflict with those of the customers of the firm.

Draft research may be submitted to the subject company for the checking of factual accuracy only.

Decisions on analyst recruitment, remuneration and termination are to be taken by the Chief Executive in conjunction with the Head of Research. Analyst remuneration will not be based on expressing a specific view or recommendation.

Involvement of Analysts in other activities

Analysts can provide investment ideas, information and advice to both retail clients and institutional brokers and their clients.

Analysts may assist in the research of corporate finance business opportunities. They may attend presentations and road shows. Their participation, however, must not be perceived as an endorsement to the issuer and their comments must not, implicitly or explicitly, include any recommendations.

Inducements

Analysts and other employees are prohibited from offering or accepting inducements to provide favourable investment research. Attempts to put pressure on an analyst to produce favourable research must be disclosed to Compliance immediately.

Timing and Manner of Publication and Distribution of Research

Research can be distributed either by email, hard copy or by publication on the firm’s website. Employees are prohibited from affecting own account transactions in advance of research publications or distribution.