Conflict of interest avoidance and management policy
- This Prevention and Management Policy (hereinafter – the Policy) of Conflicts of Interest of INRENTO, UAB (hereinafter – the Company) determines the measures for identifying and preventing conflicts of interest which may arise for the Company as an operator of crowdfunding platform and which may negatively affect the interests of Financiers and Project Owners or properly manage these conflicts of interest.
- The Policy is concluded in accordance with the provisions of the Law on Crowdfunding of the Republic of Lithuania and other legislation regulating the Company activity valid in the Republic of Lithuania.
- The manager of the Company shall be liable for the implementation of this Policy in the Company activity.
- The definitions written in title case in this Procedure shall have the following meaning unless their context of use requires otherwise:
- The Company
INRENTO, UAB company code: 305519977, address Ramybės st. 4-70, LT-02103 Vilnius, Lithuania.
- The Financier
The client of the Company seeking to fund or who have funded the published project on the crowdfunding platform managed by the Company.
- Close Affiliations
the state when two or more natural or legal persons, other organisations, and their divisions are bound by:
- participation relations when no less than 1/5 of the share capital of the Company or voting rights are controlled directly or via the control method;
- the control relations encompassing the relations of the parent and affiliate companies that formed on the basis of control, as well as other similar relations between the natural and legal person, and the company regarding the fact that the affiliate company of the affiliate company of the parent company is jointly deemed as the affiliate company of the primary company as well;
- permanent control relations with the same person when two or more legal and natural persons are constantly bound by the control relationship with the same person, it shall be deemed that close affiliations bind all these persons.
- The Law
The Law on Crowdfunding of the Republic of Lithuania.
- The Platform
The crowdfunding platform administrated by the Company.
- The Policy
- Project Owner
The client of the Company that attracted or seeking to attract funding for their developed project via the crowdfunding platform managed by the Company.
- The Client
The user registered in the Platform administrated by the Company who have performed or seeking to perform the transaction of crowdfunding.
- The Manager
The director of the Company.
- Affiliated Persons
The employees, managers, shareholders of the Company and persons affiliated to them in Close Affiliations.
- Other definitions used in this Policy shall be comprehended as they are determined in the Law or in the Agreement of Platform Use unless the context requires otherwise.
- CONFLICTS OF INTEREST
- The Company shall aim to coordinate its and their Clients’ interests in their activity as much as possible and ensures in all cases that proper conduct shall be maintained with Clients in good faith and for their best interest. However, potential and real conflicts of interest may be inevitable in the activity of the Company. In order to prevent conflicts of interest, and manage them wherever it is impossible to prevent them, upon encountering conflicts of interest, the Company shall follow the provisions of this Policy.
- A conflict of interest arises when the financial and other interests of the Company (or its Clients) differ from the interests of the Clients of the Company except for the cases when they are determined in the agreements concluded between the Company and the Clients.
- Conflicts of interest during the Company activity may arise between:
- The Affiliated Persons of the Company and the Clients;
- The Clients of the Company and other Clients of the Company;
- IDENTIFICATION AND MANAGEMENT OF CONFLICTS OF INTEREST
- Conflicts of interest in the Company may arise in the following fields of practical activity:
- Upon funding the Projects, the projects affiliated to the Company (or Affiliated Persons) and their owners are prioritised;
- Financiers and/or Project Owners, taking into account their direct and indirect affiliations to the Company (or Affiliated Persons), may be assessed differently than other Financiers or Project Owners;
- Affiliated Persons may perform Funding Transactions at their personal expense using the information known to them.
- Certain Financiers are granted the opportunity to fund a project on more favourable terms than other Financiers.
- Certain Project Owners are granted the opportunity to publish a project on the platform on more favourable terms than other Project Owners.
- In order to identify and prevent or (when it is impossible to prevent it) manage conflicts of interest properly, the Company shall constantly monitor and identify situations when:
- The Company (or Affiliated Person) may have a financial benefit or avoid financial losses at the Financier and/or Project Owner’s expense;
- The Company (or Affiliated Person) at the result of the service provided to the Financier and/or Project Owner or at the result of the Funding Transaction performed at the expense of the Financier and/or Project Owner is concerned with that result otherwise than the Financier and/or Project Owner are/is;
- The Company (or Affiliated Person) have a financial or other concern to prioritise the interests of one Financier and/or Project Owner at the expense of interests other Financiers and/or Project Owners;
- The Company (or Affiliated Person) receives or will receive the encouragement means not from a Financier and/or Project Owner which is related to the service provided to the Financier and/or Project Owner or transaction performed by them and which can be provided in the form of money, goods, and services except for the payments usually remitted in that case.
- Should a potential conflict of interest arise and upon identifying a current one, in all cases, the Company shall seek to ensure that it operates in good faith, for the best interests of Financiers and Project Owners. In those cases, when preventing a conflict of interest is impossible, the Company shall make all efforts to manage that conflict of interest and disclose all information related to the conflict of interest to the Financiers and Project Owners in whose regard that conflict of interest occurs or may occur.
- PREVENTION OF CONFLICTS OF INTEREST
- The Company shall apply prevention of conflict of interest as the primary means in managing potential conflicts of interest.
- To prevent conflicts of interest, the Company shall apply these measures:
- The employees, manager, and shareholders of the Company are obliged to comply with the requirement of confidentiality, behave in good faith and professionally in regards of the Financiers and Project Owners, always seek to take into account the interests of the Financier and Project Owner regardless of other Financiers and Project Owners, other activity performed by the Company, the interests of the Company or other Affiliated Persons;
- The employees, manager, and shareholders of the Company shall be introduced to the obligation to inform the manager of the Company (in case of the manager – the general meeting of shareholders) immediately about any situations which create or may create a conflict of interest;
- ensures that the applied system of remuneration to the Affiliated Persons does not create a presumption for the Affiliated Persons to benefit financially from the situations which create or may create conflicts of interest;
- prohibits the employees, manager, and shareholders of the Companies to publish, amend the Financier’s or Project Owner’s information that they are aware of which may negatively affect the interests of the Financer or Project Owner, disclose the information which is not for public use, as well as any other information related to the Financier or Project Owner which is not mandatory for the employees or manager of the Company to execute direct functions in the Company;
- ensures that all Financiers could access the same information about Project Owners and their Projects and the Affiliated Persons could not access the additional confidential information for their or a third party benefit;
- verifies whether the employees of the Company could access and work with only that information which is mandatory for performing their functions;
- In order to prevent a conflict of interest, the Company ensures that:
- all shareholders, manager, and employees of the Company, while performing their functions, shall determine whether there no conflicts of interest arise.
- The shareholders, manager, and the employees of the Company declare and update the information regularly about the persons they have Close Affiliations with;
- Upon determining the potential risk of a conflict of interest, the Company employee or shareholder shall immediately inform the manager of the Company on a potential conflict of interest and specify the type of the potential conflict of interest;
- all actions taken by the Company in respect of the Financier and Project Owner shall be based on the Clients’ interests and done in their favour and done objectively and impartially.
- The manager of the Company, upon receiving the report by the Company employee or shareholder, shall consider its substantiality and make a decision on the reported conflict of interest. The decision of the manager shall include the means to prevent a conflict of interest and how it is managed (e.g., dismissal of the employee from certain functions, and designation of another employee, a permit for the employee to continue performing their functions (or perform a transaction related to the conflict of interest) by determining the means ensuring the management of the conflict of interest).
- The manager of the Company (or the responsible person designated by the Company manager) shall regularly monitor and assess whether the prevention and management means of conflicts of interest applied by the Company are properly implemented and effective. Upon executing these functions, the Company manager (or the responsible person authorised by the Company manager):
- informs the shareholders, manager, and employees of the Company on the management procedures of conflicts of interest adopted in the Company;
- consults the Affiliated Persons on the risk of a potential or real conflict of interest in a specific situation and how it should be managed;
- performs other actions directed towards a proper and timely identification and management of conflicts of interest;
- periodically but no less than once a year does a revision of the provisions of the Policy, Internal Procedure of the Company, ensures their compliance with the requirements of the legislation applicable to the Company activity.
- MANAGEMENT OF CONFLICTS OF INTEREST
- In that case when the Company determines that a conflict of interest cannot be prevented and it can affect or negatively affect the interests of the Financier or Project Owner, the Financier and/or the Project Owner should be informed about the conflict of interest, specify the type of the conflict, the source, and the proper management measures of such conflict.
- The Company shall collect the documents which substantiate that it was impossible to prevent the conflict of interest, as well as the documents which should confirm that the Financier and/or Project Owner was properly informed about the potential or current conflict of interest.
- In those cases when the Project Owner is affiliated to the Company in property and other relationship (via managers, shareholders, etc.), the Company shall apply the following management measures of conflicts of interest:
- Financiers shall be informed on the relationship between the Project Owner and the Company in the Project description;
- The project of the Project Owner shall be assessed according to the internal procedures valid in the Company by those Company employees that have no relations with the Project Owner; the Company manager, their authorise person designates the employee;
- agreements with the Project Owners shall be signed, executed, supervised, decisions on their termination and transfer for recovery shall be made by those employees of the Company that have no relations with the Project Owner;
- the measures that have been taken to manage the conflict of interest shall be documented;
- if managing the possible conflict of interest is impossible and the risk arises that the interests of the Financiers may be damaged, the Company shall refuse to initiate or continue the business relationship with such Project Owner;
- The Company seeking to manage the conflicts of interest shall also ensure that:
- The Affiliated Person seeking to receive personal benefit could not affect negatively the Company, other Affiliated Persons, Financiers, or Project Owners;
- The Affiliated Persons could not participate in making certain decisions on the Financier or Project Owner if such participation could interfere with the effective management of the conflicts of interest;
- In those cases when a Company employee or shareholder who is working directly on the assessment of Project Owners, funds the Projects for personal purposes, such person shall inform the Company manager on such funding and get the consent for such action. In all cases, it shall be ensured that such funding is executed on the same favourable terms as for other Financiers.
- In those cases when a potential or current conflict of interest is encountered which cannot be prevented or properly managed using the measures specified in the Policy, the Company shall inform the persons on the conflict of interest and the estimated actions of prevention and management whom the conflict of interest may have a negative impact on.
- MANAGEMENT OF FINANCIERS’ AND PROJECT OWNERS’ CONFLICTS OF INTEREST
- The Company shall ensure that the same terms for funding the projects published in the Platform are granted to the Financiers except for such cases when:
- Financiers cross the predetermined boundaries of funding amounts and published in the Platform and due to that more favourable terms are granted to them (e.g., additional interest);
- More favourable terms are granted to the Financiers for the advertising purposes or for the attraction of additional Clients;
- In other cases disclosed to the Financiers in advance.
- The Company shall disclose all 23 favourable terms specified in Clause 23 granted to the Financiers on the website of its administrated Platform, beside the information about the funding conditions of specific projects.
- The Company shall ensure that the Project Owners could publish projects in the Platform and attract funding for these projects on the terms known in advance. In certain cases, (especially at the beginning of the Company activity), it is likely that Affiliated Persons shall publish the projects in the Platform as well. In these cases, the Company shall always expressively disclose the information about it on the Platform and the possible conflicts of interest related to that and their management methods to the potential financiers before creating an opportunity for them to fund these projects.
- FINAL PROVISIONS
- This Policy is approved, amended, and supplemented by the order of the Company manager. The amendments and supplements of the Policy shall come into force on the day of the order of the Company unless otherwise indicated in the order.
- The Policy shall come into force on the day of its approval and remain valid until its amendment, supplement, or abolishment.
The Policy shall be published on the website of the Platform administrated by the Company