Ethics, Compliance and Regulation

Ethics

We believe that without practicing the highest level of ethics and operating in an environment of complete integrity, no business can survive. Honesty, transparency, putting our clients first and gaining our clients' confidence through dedication and performance are therefore our main business principles.

We abide by South African legislation as well as the CFA Institute Code of Ethics and Standards and always apply the stricter interpretation when a conflict between the two sources occurs.

To view the CFA regulatory documentation under which we operate please click on the links below:

CFA Institute Code of Ethics and Standards of Professional Conduct (443kb, pdf format)
CFA Institute Standards of Practice Handbook, 10th Edition, 2010 (4.48MB, pdf format)
CFA Institute Asset Manager Code of Professional Conduct (1.18MB, pdf format)

We also have our own internal Conflict of Interest Management Policy (113KB) covering conduct in any situation in which an actual or potential interest could exert an influence on rendering an unbiased and fair financial service, or from acting in the interests of a client.

The Promotion of Access to Information Act 2 of 2000 (PAIA) is legislation in the Republic of South Africa allowing access to any information held by the State, and any information held by private bodies that is required for the exercise and protection of any rights. It applies specifically to South Africa, but is part of the global drive towards freedom of information. The Act is enforced by the South African Human Rights Commission (SAHRC). Click here for the PAIA manual of Clarus Asset Managers (Pty) Ltd (PDF,199KB).

Compliance

In an ever-increasing complicated regulatory environment, compliance risk management has become essential either due to statutory requirements or as a requirement of global best practice and corporate governance.

Compliance Practice renders compliance risk management and advisory services to Clarus Asset Managers (Pty) Ltd in respect of all aspects of FAIS and FIC compliance functions and the management of compliance risk. Compliance risk is a composite risk with particular focus on regulatory and reputational risk.

Compliance Practice Services (Pty) Ltd provides its clients with a wide selection of services including compliance monitoring, administration, assessment and training services on an on-going basis. It is a member of the Compliance Institute of South Africa and maintains full implementation of the Generally Accepted Compliance Practice framework.

Regulation

Clarus Asset Managers (Pty) Ltd is regulated by the South African Financial Services Board and operates under the license number 858.

For a copy of the legislation covering the amendment to the general code of conduct please view the Government Gazette Financial Advisory and Intermediary Services Act, 2002 (697kb).

Please click here to view our full Due Diligence documentation (786KB). An excerpt covering the primary aspects appears below:

Does the firm maintain written policies and procedures?

Yes. Clarus Asset Managers (Pty) Ltd is committed to an internal complaint resolution system and procedures based on the following principles:

to maintain and remain committed to an efficient complaint resolution system with adequate resources;
transparency and visibility by ensuring that clients have full knowledge of the procedures for resolution of their complaints;
accessibility of facilities by ensuring the existence of easy access to such procedures at Clarus Asset Managers (Pty) Ltd’s business premises open to clients, and through ancillary postal, fax, telephone and/or electronic means;
fairness by ensuring that resolution of a complaint will be effected in a manner which is fair to both clients and Clarus Asset Managers (Pty) Ltd; and
adequate training of all relevant staff including imparting and ensuring full knowledge of the provisions of the legislation with regard to the resolution of complaints.

Conflict of Interest Management Policy (PDF | 1221KB)

Definition of a complaint

“Complaint” means a specific complaint relating to a financial service rendered by Clarus Asset Managers (Pty) Ltd or a representative to the complainant on or after the date of commencement of the complaint in which it is alleged that Clarus Asset Managers (Pty) Ltd or representative:

has contravened or failed to comply with a provision of the investment and that as a result thereof the complainant has suffered or is likely to suffer financial prejudice or damage;
has will fully or negligently rendered a financial service to the complainant which has caused prejudice or damage to the complainant or which is likely to result in such prejudice or damage; or
has treated the complainant unfairly.

Procedure for lodging a complaint

Any client who wishes to lodge a complaint against Clarus Asset Managers (Pty) Ltd or any employee must lodge such complaint in writing.

The complaint must provide full details and be accompanied by supporting documentation.

All complaints must be addressed to:

Company Name       Clarus Asset Managers (Pty) Ltd
Postal address         PO Box 395, Somerset Mall 7137, South Africa
Telephone no            +27 (0) 21 852 5300, +27 (0) 860 CLARUS or +27 (0) 860 252 787
Faximile                      +27 (0) 21 852 2991
E-mail address         info@clarus.co.za
For the attention of    The CEO ~ JE Kellermann

Clarus Asset Managers (Pty) Ltd will acknowledge receipt of the complaint in writing and respond promptly to any complaint.

Clarus Asset Managers (Pty) Ltd will noftiy the complainant in writing of the outcome of the resolution of the complaint within 6 weeks of receipt thereof. Should the complaint not be resolved to the complainant’s satisfaction within 6 weeks of lodging such complaint, the complainant may lodge the complaint with the Ombud of Financial Services Providers (South Africa) within 6 months of receiving notification from Clarus Asset Managers (Pty) Ltd regarding the resolution/dismissal of the complaint.

Internal complaint resolution system

Clarus Asset Managers (Pty) Ltd must nominate a contact person responsible for managing and overseeing the effective resolution of complaints and compliance with this complaints policy and procedures (“the contact person”).

All clients must be advised in writing that Clarus Asset Managers (Pty) Ltd has a complaints policy and procedures which communication (refer to investment application form).

Any employee who receives a complaint from a client must request the client to lodge such complaint in writing and simultaneously provide the client with the communication particulars of the contact person.

If the complaint is received by any employee other than the contact person, the complaint should be handed to the contact person immediately.

The contact person may delegate resolution of the complaint to an appropriate person.

Complaints must be investigated and responded to promptly.

Complaints must be handled in a timely and fair manner.

Non-routine serious complaints must be handled at an appropriate level and by staff with adequate expertise.

All complaints must be resolved within 6 weeks of receipt thereof.

Should a complaint not be resolved to the satisfaction of the complainant, the complainant must be notified thereof within 6 weeks of receipt of the complaint and be advised of its right to lodge such complaint with the Ombud within 6 months of receipt of such notification, as well as be advised of any other legal remedies it may have.

The notification after dismissal of a complaint must include the name, address and other contact particulars of the Ombud.

If an outcome is not favourable to the client, full written reasons must be furnished to the client.

Where the complaint is resolved in the favour of the client, a full and appropriate level of redress must be offered to the client without any delay.

All complaints must be followed-up to ensure avoidance of occurrences giving rise to complaints and/or to improve services and systems and procedures, where necessary.

The complaints register must regularly be completed and inspected by the contact person who will excise management control to ensure effective control and supervision of the complaints process.

Records must be kept for a minimum period of 5 years together with an indication whether or not such complaint has been resolved, cases of non-compliance with the legislation and the reasons for such non-compliance.

Have appropriate anti-money laundering procedures been implemented?

Yes.

FICA imposes the following obligations:

Know Your Client (“KYC”) (duty to identify and verify);
record-keeping;
reporting; and
develop and implement internal rules to ensure compliance with legal obligations.

Clarus Asset Managers (Pty) Ltd is committed to:

preventing, detecting, monitoring and reporting confirmed or suspected money laundering;
client identification and verification (“Know Your Client”, “KYC”) (if applicable);
record-keeping;
money laundering control training; and
monitoring of accounts, activities, policies, and procedures.

Clarus Asset Managers (Pty) Ltd has formulated and implemented internal rules concerning:

the establishment and verification of the identity of persons whom the Clarus Asset Managers (Pty) Ltd must identify in terms of FICA;
the information of which record must be kept in terms of FICA;
the manner in which and place at which such records must be kept;
the steps to be taken to determine when a transaction is reportable to ensure the Clarus Asset Managers (Pty) Ltd complies with its duties under FICA; and
such other matters as may be prescribed.

What is money laundering?

Money laundering is the processing of criminal proceeds to disguise their original source. Once illicit proceeds have been integrated into the legitimate financial system, it has been laundered.

When is a transaction suspicious or unusual?

When a person who carries on a business or is in charge of or manages a business or who is employed by a business and who knows or suspects that:

the business has received or is about to receive the proceeds of unlawful activities;
the transaction or series of transaction to which the business is a party, facilitated or is likely to facilitate the transfer of the proceeds of unlawful activities;
has no apparent business or lawful purpose;
is conducted for the purpose of avoiding giving rise to a reporting duty under FICA; or
may be relevant to the investigation of an evasion or attempted evasion of a duty to pay any tax, duty or levy imported by legislation administered by the authorities in the respective country;
the business has been used or is about to be used in any way for money laundering purposes;
the transaction must be reported to the Financial Intelligence Centre (“FIC”).

Who is the FIC?

The Financial Intelligence Centre (“FIC”) is an intelligence centre established to identify the proceeds of unlawful activities and to combat money laundering activities.

Internal Rules

KYC requirements must be applied to all new and existing clients – refer to all new investment application forms.

The first requirement of KYC is identification and verification.

The second requirement of KYC is to ensure that adequate information is obtained on the type of business, the prospective client expects to undertake with Clarus Asset Managers (Pty) Ltd and their appointed administrator and the source or origin of the funds involved.

Whenever the Clarus Asset Managers (Pty) Ltd and their appointed administrator establishes a business relationship or concludes a transaction with a client, whether the transaction is a single transaction or concluded in the course of a business relationship which Clarus Asset Managers (Pty) Ltd has with the client, Clarus Asset Managers (Pty) Ltd and their appointed administrator must keep record of:

the identity of the client;
if the client is acting on behalf of another person, the identity of the person on whose behalf the client is acting;
the client’s authority to act on behalf of that other person;
the manner in which the identity of the persons referred to above was established;
the nature of that business relationship or transaction.

In the case of a transaction the following requirements apply:

the amount involved;
the parties to the transaction;
all accounts that are involved in transactions concluded by that Clarus Asset Managers (Pty) Ltd and their appointed administrator in the course of that business relationship;
that single transaction;
the name of the person who obtained the information referred to above on behalf of the Clarus Asset Managers (Pty) Ltd and their appointed administrator;
any document or copy of a document obtained by Clarus Asset Managers (Pty) Ltd and their appointed administrator in order to verify a person’s identity in terms of FICA;
records may be kept in electronic form;
records must be kept for at least 5 years from the date on which the business relationship was terminated or the transaction concluded;
if an employee has formed a suspicion or has knowledge of an unusual transaction, a suspicion disclosure report must be made to the FIC within a period of 15 working days of the knowledge being acquired or suspicion of the event or transaction arose.

Clarus Asset Managers (Pty) Ltd’s Disaster Recovery Plan

All administration and record keeping is placed with our administrators and custodians; namely Standard Bank, JP Morgan and Metropolitan.

Internal key servers are backed up daily which allows Clarus Asset Managers (Pty) Ltd employees to work remotely and use secure login access via the internet.

The Promotion of Access to Information Act

The Promotion of Access to Information Act 2000 requires a PAIA manual to be drawn up by everyone who is carrying on a trade, business or profession in South Africa. Clarus Asset Managers (Pty) Ltd PAIA manual provide information on the documents that are held by the business which are open to the public as well as those that are confidential. It lists what documents are held in terms of specific laws that relates to Clarus Asset Managers (Pty) Ltd and it provide guidelines on how a member of the public can access this information.

Clarus Asset Managers PAIA Manual Jul 2012 (PDF | 109KB)