Potential Conflicts of Interest Policy
I. STATEMENT OF POLICY
As a registered investment adviser with multiple clients, Altrinsic faces potential conflicts of interest in connection with management of multiple portfolios simultaneously. It is Altrinsic’s policy that no client for which Altrinsic has investment decision responsibility shall receive preferential treatment over any other client. Additionally, it is Altrinsic’s policy that the best interests of its clients will be placed above the interests of the firm or its employees. This policy summarizes some of the conflicts of interests faced by Altrinsic and the steps Altrinsic takes to mitigate these conflicts. It is not meant to be an exhaustive list of all potential conflicts of interest. All employees of Altrinsic have a responsibility to report any potential conflicts of interest to Compliance.
II. POTENTIAL CONFLICTS OF INTEREST
A. INVESTMENT OR BROKERAGE DISCRETION
1. Soft Dollar Arrangements
A potential conflict of interest could arise when Altrinsic uses client brokerage commissions to obtain research or brokerage services as the firm benefits from the research, products and/or services it would otherwise have to produce internally or purchase. In order to mitigate this potential conflict of interest, Altrinsic seeks best execution of clients’ transactions under the circumstances of the particular transaction.
Altrinsic maintains a soft dollar policy and requires that soft dollar arrangements are clearly documented and disclosed to clients in Altrinsic’s Form ADV Part 2A. Please see Altrinsic’s Soft Dollar Policy and Procedures for additional information.
2. Trade Aggregation and Allocation
A potential conflict of interest could arise when Altrinsic aggregates orders and allocates securities among clients. In order to mitigate this potential conflict of interest, it is Altrinsic’s policy that all clients should be treated fairly and that to the extent possible, all clients should receive equitable treatment over time and no client(s) will receive more favorable treatment or be disadvantaged over other client(s). Whenever possible, Altrinsic will aggregate orders for accounts purchasing/selling the same security at the same time. Generally, each eligible client that participates in an aggregated order will participate at the average price for all Altrinsic client transactions in that security on a given business day and transaction costs will be generally shared pro-rata based on each client’s participation in the transactions.
Altrinsic maintains policies and procedures relating to trade aggregation and allocation and they are disclosed in its Form ADV Part 2A.
Please see Altrinsic’s Trade Aggregation and Allocation Policy and Procedures for additional information.
3. Performance Fees
A potential conflict of interest could arise when executing trades for accounts which pay fees on different schedules. In order to mitigate this potential conflict, it is Altrinsic’s policy that all clients should be treated fairly and that, to the extent possible, all clients should receive equitable treatment over time and no clients will receive more favorable treatment or be disadvantaged over other client(s). Please see Altrinsic’s Trade Aggregation and Allocation Policy and Procedures for additional information.
4. Directed Brokerage
A potential conflict of interest could arise when clients direct brokerage from transactions in their account to a specific broker. These clients receive the benefit of the research or brokerage services which are paid for by other clients’ commissions. Additionally, when a client directs Altrinsic to effect transactions, or a portion of the transactions, in their account through a specific broker, it potentially impacts Altrinsic’s ability to obtain best execution on these clients’ behalf.
In order to mitigate this potential conflict of interest, Altrinsic has adopted a policy to address directed brokerage situations and makes appropriate disclosures in its Form ADV Part 2A
Please see Altrinsic’s Directed Brokerage Policy and Procedures for additional information.
5. Valuation of Securities
Altrinsic could face the task of putting a value on securities which may present a potential conflict of interest. Altrinsic may have the incentive and ability to artificially inflate the valuation of financial instrument in clients’ portfolios. In order to mitigate this risk, Altrinsic has adopted a policy to address standard and fair valuation events. Please see Altrinsic’s Valuation Policy and Procedures for additional information.
B. PERSONAL INVESTMENT/BUSINESS OPPORTUNITIES
1. Personal Securities Transactions
A potential conflict of interest could arise when an employee of Altrinsic effects securities’ transactions in their personal accounts in the same or different securities than those purchased and sold for the accounts of Altrinsic’s clients.
In order to mitigate this potential conflict of interest, only transactions that comply with the Code of Ethics and would not have an adverse economic impact on clients are approved. No personal transactions are aggregated with clients’ transactions.
Altrinsic maintains policies and procedures relating to personal securities transactions and they are disclosed in its Form ADV Part 2A.
Please see Altrinsic’s Code of Ethics for additional information.
2. Investment/Business Opportunities
A potential conflict of interest could arise when an employee of Altrinsic is given the opportunity to participate in investment opportunities which may or may not be suitable for Altrinsic’s clients. In order to mitigate this potential conflict of interest, employees of Altrinsic must put the best interest of the clients ahead of their own personal interests and therefore, must bring the potential investment opportunity to the attention of the firm prior to investing.
Please see Altrinsic’s Code of Ethics for additional information.
3. Outside Business Activities
A potential conflict of interest could arise if an Altrinsic employee engages in outside business activities. In order to mitigate this potential conflict of interest, all outside business activities must be disclosed to and approved by the firm. No outside business activity which potentially conflicts with the employees’ duties to the firm and its clients will be approved.
Please see Altrinsic’s Code of Ethics for additional information.
C. BUSINESS GIFTS AND ENTERTAINMENT
Gifts and entertainment given to or received from clients, vendors or prospects may be considered efforts to gain unfair advantage or may impair Altrinsic’s ability to act in the best interests of its clients. In order to mitigate this potential conflict of interest, employees of Altrinsic are prohibited from giving or receiving gifts in excess of minimal or nominal value from clients and vendors or attending any business entertainment events not reasonable in value.
Please see Altrinsic’s Code of Ethics for additional information.
D. PROXY VOTING
A potential conflict of interest could arise when Altrinsic has responsibility to vote proxies on behalf of its clients. Such conflicts could include, but are not limited to, Altrinsic’s or its affiliates, if any, relationships with the issuer or its affiliates for which it is voting. If a potential or actual conflict exists, Altrinsic will determine whether voting is in the best interests of clients.
Altrinsic maintains policies and procedures relating to proxy voting and they are disclosed in its Form ADV Part 2A.
Please see Altrinsic’s Proxy Voting Policy and Procedures for additional information.
III. COMPLIANCE REVIEW
A. Compliance Controls Testing
Altrinsic’s Controller tests the compliance controls and has the responsibility to communicate any significant findings from testing directly to Compliance and may escalate any matters directly to the Chief Executive Officer.
B. Annual Review
No less frequently than annually, as part of its compliance program under Rule 206(4)-7, Altrinsic will assess the adequacy of this policy, along with the underlying policies referenced herein. Additionally, the firm will review changes in its business and regulatory requirements to assess any new, potential conflicts of interest for the firm.