Conflict of interest avoidance and management policy

 

  1. GENERAL PROVISIONS

 

  1. This Conflict of Interest Avoidance and Management Policy of UAB Inrento, (hereinafter referred to as the "Company") (the "Policy") sets out the measures to identify, avoid and appropriately manage conflicts of interest that may arise in the course of the Company's activities as an operator of a crowdfunding platform and which may adversely affect the interests of the Funders or the Project Owners. 

  2. The Policy has been drawn up in accordance with the Regulation and other applicable legislation. 

  3. The Chief Executive Officer of the Company shall be responsible for the implementation of this Policy in the Company's operations. 

  1. CONNECTIONS

  1. Capitalised terms used in these Rules shall have the meanings set out below, unless the context of their use requires otherwise:

  2.  

5.1 Company 

UAB Inrento, company code 305519977, address Sporto g. 12- 114, Vilnius, Lithuania.

5.2 Funder

A client of the Company seeking to finance an announced project through a crowdfunding platform operated by the Company.

5.3 Close links 

a situation in which two or more natural or legal persons, other organisations and subdivisions thereof are linked by:

a) Participating relationships, where at least 1/5 of the company's share capital or voting rights are held directly or through control;

b) a control relationship, which includes a relationship between a parent and a subsidiary that arises by virtue of control, as well as other similar relationships between a natural or legal person and an enterprise, given that the subsidiary of the enterprise's subsidiary is also considered to be the subsidiary of the first enterprise;

c) continuing relationship of control with the same person, where two or more natural or legal persons have a continuing relationship of control with the same person, a close relationship shall be deemed to exist between all such persons.

5.4 Regulation

Regulation of the European Parliament and of the Council on European Business Crowdfunding Providers and related legislation.

5.5 Platform  

A crowdfunding platform managed by the company.

5.6 Policy 

this document.

5.7 Project owner 

A client of the Company that has raised or is seeking to raise finance for a project it is developing through a crowdfunding platform operated by the Company.

5.8 Director

Director of the company.

5.9 Related person

Employees, directors, shareholders and close ties related people by definition defined in this Policy.



 

  1. Other terms used in the Policy shall have the meaning given to them in the Rules or the Platform Use Agreement unless the context otherwise requires. 

  1. CONFLICTS OF INTEREST

 

  1. The Company shall endeavour to balance its own interests with those of its Clients as far as possible and shall at all times ensure that Clients are treated fairly and in their best interests. However, it is inevitable that potential or actual conflicts of interest may arise in the Company's business. In order to avoid conflicts of interest, or where it is not possible to manage them appropriately, the Company will comply with the provisions of this Policy when faced with conflicts of interest. 

  2. A conflict of interest arises when the financial or other interests of the Company (or its Clients) are different from the interests of the Company's Clients, except as provided for in the agreements between the Company and its Clients. 

  3. Conflicts of interest in the Company's business may arise between:

    1. the Company's Affiliates and Customers;

    2. the Company's Clients and other Clients of the Company;

    3. the interests of the Company's Clients and the Company.

  1. IDENTIFYING AND MANAGING CONFLICTS OF INTEREST

 

  1. Conflicts of interest within the Company may arise in the following main areas of practice: 

    1. Priority in financing Projects shall be given to crowdfunding projects and/or owners of crowdfunding projects linked to the Company (or Related Persons); 

    2. Funders and/or Project Owners may be treated differently from other Funders or Project Owners, depending on their direct or indirect relationship with the Company (or Related Persons); 

    3. Related Persons may enter into Financing Transactions for their own personal account using confidential information known to them;

    4. Certain Financiers are given the opportunity to finance a project on more favourable terms than other Financiers in the absence of objective circumstances;

    5. Certain Project Owners are given the opportunity, in the absence of objective circumstances, to list a project on the Platform on more favourable terms than other Project Owners.

  2. In order to properly identify, assess and avoid or (where it is not possible to do so) manage conflicts of interest in its business, the Company continuously monitors and identifies situations in which: 

    1. The Company (or a Related Person) may benefit financially or avoid financial loss at the expense of the Financier and/or the Project Owner; 

    2. The Company (or a Related Person) has an interest in the outcome of the service provided to the Financier and/or the Project Owner or the outcome of the Financing Transaction for the account of the Financier and/or the Project Owner other than the interest of the Financier and/or the Project Owner in the outcome; 

    3. The Company (or a Related Person) has a financial or other interest in favouring the interests of one Funder and/or Project Owner at the expense of the interests of other Funders and/or Project Owners; 

    4. The Company (or a Related Person) receives or will receive an incentive other than from the Financier and/or the Project Owner which is in connection with a service provided to the Financier and/or the Project Owner or a financing transaction entered into by the Financier and/or the Project Owner, and which may be in the form of money, goods or services, other than the payments customarily payable under such circumstances. 

  3. In the event of a potential or actual conflict of interest, the Company will at all times endeavour to ensure that it acts in good faith and in the best interests of the Funders and the Project Owners. Where a conflict of interest cannot be avoided, the Company shall use its best endeavours to manage the conflict of interest and shall disclose to the Financiers and the Project Owners in respect of whom the conflict of interest arises or is likely to arise all information relating to the conflict.

 

  1. AVOIDING CONFLICTS OF INTEREST

 

  1. The Company uses the avoidance of conflicts of interest as a key tool to manage potential conflicts of interest. 

  2. The Company also takes the following measures to avoid conflicts of interest: 

    1. The Company's employees, officers and shareholders are obliged to maintain confidentiality, to act in a fair and professional manner towards the Funders and the Project Owners, and to seek to have the best interests of the Funders and the Project Owners in mind at all times, irrespective of the best interests of the other Funders and the Project Owners, the other activities of the Funders and the Project Owners, or the interests of the Company or any other Relevant Persons; 

    2. The Company does not invest its own funds in projects published on the Platform;

    3. The Company lists on the Platform the crowdfunding projects in which Related Persons have invested;  

    4. Related parties are made aware of the obligation to report immediately to the Company's Chief Executive Officer (or, in the case of the Chief Executive Officer, to the General Meeting of Shareholders) any situation that creates or may create a conflict of interest; 

    5. ensure that the system of remuneration of Related Parties does not allow Related Parties to benefit financially from situations that give rise to, or are likely to give rise to, conflicts of interest; 

    6. prohibit the Company's employees, officers and shareholders from publishing, exchanging information of the Financier or the Project Owner known to them that may adversely affect the interests of the Financier or the Project Owner, disclosing information that is not publicly available, or disclosing any other information relating to the Financier or the Project Owner that is not necessary for the performance of the Company's employees' or officer's direct functions in the Company; 

    7. ensure that the same information about Project Owners and their Projects is available to all Financiers and that Related Persons are prevented from obtaining additional sensitive information for their own benefit or for the benefit of others; 

    8. ensure that the Company's employees have access to and handle only the information necessary to perform their functions; 

  3. In order to avoid conflicts of interest, the Company shall ensure that: 

    1. all shareholders, directors and employees of the Company shall, in the exercise of their functions, determine whether a conflict of interest exists; 

    2. The Company's shareholders, directors and employees shall declare and periodically update information on persons with whom they have close links;

    3. upon identifying a potential risk of a conflict of interest, an employee or shareholder of the Company shall immediately inform the Company's Head of the potential conflict of interest and shall specify the nature of the potential conflict of interest; 

    4. all actions taken by the Company in relation to the Financier and the Project Owner are based on the interests of the Clients and are carried out for their benefit, and are carried out objectively and impartially. 

  4. Upon receipt of a notification from an employee or shareholder of the Company, the Company's Chief Executive Officer shall consider the validity of the notification and make a decision on the conflict of interest notified. The manager's decision must include how the conflict of interest is avoided or managed (e.g. removal of the employee from certain functions and appointment of another employee, permitting the employee to continue to perform his/her functions (or to enter into a transaction involving conflicts of interest), with measures to ensure that the conflict of interest is managed). 

  5. The Chief Executive Officer of the Company (or a responsible person designated by the Chief Executive Officer of the Company) shall continuously monitor and assess whether the Company's measures to avoid and manage conflicts of interest are properly implemented and effective. In carrying out these functions, the Chief Executive Officer of the Company (or a person authorised by the Chief Executive Officer of the Company) shall: 

    1. inform the Company's shareholders, management and employees of the Company's procedures for managing conflicts of interest; 

    2. advise the persons concerned on whether a potential or actual conflict of interest exists in a particular situation and how it should be managed; 

    3. take other steps to identify and manage conflicts of interest in an appropriate and timely manner;  

    4. Periodically, at least once a year, review the provisions of the Policy and the Company's internal procedures, ensuring their compatibility with the requirements of legal acts applicable to the Company's activities.

  6. Each Affiliate, before becoming an Affiliate, shall be made aware of his or her obligations under this Policy and shall sign or otherwise acknowledge (e.g. by email) that he or she has read and understood this Policy and undertakes to comply with it. 

  7. Whenever a Connected Person intends to invest in crowdfunding projects published on the Platform, he/she must inform (by email or otherwise) and obtain the consent of the directors of the Company prior to investing. 

  8. A director of the Company may disapprove a Related Person's intention to invest where such action may adversely affect the management of conflicts of interest or adversely affect the interests of the Financier or the Project Owner. Such decision shall be made by the Director of the Company taking into account the fact that the Related Person is in possession of information which is not publicly disclosed to the public investors. In the event that a Director wishes to undertake a Crowdfunding Transaction, he shall inform the Head of Finance and Operations and shall obtain his prior approval for the Crowdfunding Investment. 

  9. The provisions of Rules 18 to 20 do not apply to shareholders of the Company who are passive shareholders (i.e. financial investors) and who participate in the business of the Company. 

  10. All documentation related to this process (emails, communications, information) shall be kept and documented by the Head of the Company.

  1. MANAGING CONFLICTS OF INTEREST

 

  1. In the event that the Company determines that a conflict of interest is unavoidable and may affect or adversely affect the interests of the Financier or the Project Owner, the Financier and/or the Project Owner must be informed of the conflict of interest, specifying the nature of the conflict, the source of the conflict, and the means of appropriately managing such conflict. 

  2. The Company must collect documentation to substantiate that the conflict of interest could not have been avoided, as well as documentation to substantiate that the potential or actual conflict of interest was duly disclosed to the Funder and/or the Project Owner. 

  3. In cases where the Project Owner is related to the Company by property or other relationships (through directors, shareholders, etc.), the Company shall apply the following conflict of interest management measures: 

    1. The relationship between the Project Owner and the Company/Related Persons shall be disclosed to the Financiers in the Project Description; 

    2. The Project Owner's project shall be evaluated in accordance with the Company's internal procedures for the evaluation of those employees of the Company who have no relationship with the Project Owner, such employee to be designated by the Company's CEO, or his/her delegate; 

    3. contracts with Project Owners are signed, executed, monitored, terminated and handed over for recovery by Company staff who have no relationship with the Project Owner; 

    4. the measures taken to manage conflicts of interest are documented; 

    5. if it is not possible to manage the potential conflict of interest and there is a risk that the interests of the Funders may be adversely affected, the Company shall refuse to enter into or continue any business relationship with such Project Owner; 

  4. In order to properly manage conflicts of interest, the Company shall also ensure that: 

    1. Related Persons should not adversely affect the Company, other Related Persons, the Financiers or the Project Owners for their own personal gain; 

    2. Related parties should not be involved in specific decisions concerning the Financier or the Project Owner if such involvement would be detrimental to the effective management of conflicts of interest; 

    3. where an employee or shareholder of the Company who is directly involved in the evaluation of the Project Owners funds the Projects for personal purposes, such person must inform the Company's Chief Executive Officer of the funding and obtain permission to do so. In all cases, it shall be ensured that such financing is on terms no more favourable than other Financiers. 

  5. In cases where there is an existing or potential conflict of interest that cannot be avoided or properly managed using the measures set out in the Policy, the Company shall inform the persons who may be adversely affected by the conflict of interest of the conflict of interest and the actions planned to avoid or manage it. 

  6. A company shall in all cases not disclose projects whose owners are: a) any of its shareholders holding 20% or more of its share capital or voting rights; b) its directors or employees; c) any other natural or legal person within the meaning of Article 4(1)(35)(b) of Directive 2014/65/EU who has a controlling interest, whether direct or indirect, over those shareholders, directors or employees.

  7. In cases where the persons referred to in Clause 23 of the Policy invest in a project published by the Company, the Company shall fully disclose on its website the fact that such persons may be Investors, including the specific projects in which the investment has been made, and shall ensure that such investments are made on the same terms and conditions as those applicable to other Investors and that such persons are not subject to any preferential treatment or privileged access to information. 

  1. MANAGING CONFLICTS OF INTEREST BETWEEN FUNDERS AND PROJECT OWNERS

 

  1. The Company shall ensure that all Funders are granted the same terms and conditions when funding projects published on the Platform, except that:

    1. Financiers are given more favourable terms for promotional purposes or for attracting additional customers;

    2. In such other cases as may be disclosed in advance to the Financiers. 

  2. The Company shall disclose all of the more favourable terms granted to Financiers under Clause 25 on the website of the Platform it administers, in addition to the information on the terms of financing of specific projects.

  1. FINAL PROVISIONS

 

  1. This Policy shall be approved, amended or supplemented by order of the Chief Executive Officer of the Company. Amendments and additions to the Policy shall take effect on the date of the Company's order, unless otherwise specified in the order. 

  2. The Policy shall enter into force upon approval and shall remain in force until amended, supplemented or repealed. 

  3. The Policy is published on the website of the Platform administered by the Company.