Conflicts of Interest Policy

A conflicts of interest policy is the separate document, referenced by the client agreement, in which a firm identifies the places where its own interest may diverge from a client's and states what it does about each. The situations named are structural rather than accidental: the firm taking the other side of client trades, revenue that rises with client activity, payments made to or received from introducers, and staff whose remuneration depends on volumes. The distinction the document turns on is what the firm says it does with each conflict, because identifying one is not the same as removing it. Regulated frameworks generally set an order — avoid the conflict, manage it so the client is not disadvantaged, and disclose it only where the first two cannot be relied on — which makes disclosure the weakest of the three rather than the standard answer. Reading the policy is therefore a matter of counting how many entries end in disclosure alone, and of noting whether the arrangements described are ones the client can check independently.