Policy on Handling Fees, Commission and Non-Cash Benefits

Accepting benefits in any form by employees of the management company is not permitted in principle because it is a possible source of conflicts of interest. The management company has specified this in binding form in internal guidelines for its employees and determined measures for implementation (e.g. through (employment) contractual obligation for employees/encouragement of superiors to carry out checks). This ban ceases to apply when conflicts of interest are not to be feared in view of the low value of the benefits. The management company has therefore permitted exceptions from the ban within the scope of its internal guidelines (for invitations to business meals, for example) and set limits (e.g. for gifts with a value of up to 50 euros, possibly in conjunction with a total upper limit per annum and donor), where the ban does not apply.

Fees and other non-cash benefits collected in connection with transactions (hard, soft and shared commissions) are treated as follows:

  • The management company ensures that monies collected in connection with transactions which are to be charged to an investment fund, flow into the fund’s assets (except for the non-cash benefits stated below) and are reported in the annual report. The regulation covers the handling of reimbursement of expenses deducted from the investment fund to the company in monetary form ("kickbacks"). The management company channels the commission it receives for investment shares or financial instruments held in the investment fund into the respective investment fund and reports them in the schedule of revenue and expense items under “other revenue”. If the kickbacks do not just relate to expenses incurred for the charge of one single investment fund then they are to be channelled pro rata into the respective investment funds.
  • Other non-cash benefits (broker research, financial analysis, market and price information systems), which are received in connection with transactions and are allocable to one investment fund, must be used in the interests of the investors in the investment decisions made. The management company’s intention to receive such non-cash benefits must be disclosed.

Personal Benefits

Benefits from a third party (“donor”) may only be accepted or granted if they do not exceed the de minimus value limit and do not lead to an influence over professional decisions. In the event that the value limit is exceeded, they must be reported to the Compliance Department beforehand (i.e. before accepting a gift or registering for an event). There is a form on Universal-Investment-Luxembourg S.A.’s intranet, which must be presented to the employee’s superior before submission to the Compliance Department. The Compliance Department can refuse a benefit. If the value of the benefit cannot be determined precisely then an estimate must be made. In the case of benefits for whole departments, the value to determine the de minimus limit is to be divided by the number of employees in that department.

De Minimus Limit (not notifiable):

  • Gifts (e.g. wine, confectionery, Christmas presents, etc.): €50 p.a. per donor
  • Invitations to events: €50 p.a. per donor
  • Private invitations to meals: €50 per invitation, €200 p.a. per donor

Invitations to business meals may be accepted in principle.

The donors are regarded to be the respective companies in whose name the benefit was granted. Conversely, Universal-Investment-Luxembourg S.A. is also deemed to be a donor in the case of benefits to clients or business partners.

Invitations to Events:

Invitations to business meals, training courses, lectures and specialist events may be accepted from or offered to third parties without reporting them to the Compliance Department if the specialist aspect outweighs the private in terms of topic and time. That is the case, for example, with free information events at which refreshments are on offer as well as specialist information.

In the case of invitations to events with an overwhelming leisure/entertainment character, a copy of the invitation is to be attached to the application to report a benefit. This also applies to invitations which are extended in the name of the Universal-Investment Group, e.g. client events organised by Universal-Investment with an overwhelming leisure/entertainment character. Participation in such an event may only be affirmed after consent has been given by the Compliance Department.

In the case of invitations to events with an overwhelming leisure/entertainment character, it must be ensured that the donor has paid tax on them at a flat rate.

The review by the Compliance Department is carried out solely from a compliance point of view and does not take into consideration any individual matters (e.g. fiscal nature). No approval is given by the Compliance Department for applications submitted late.

Employees may not demand invitations to meals or events or other benefits, personal services or favours from clients or business partners.

Compliance with these rules is monitored by the respective superiors.

Review

This policy is reviewed at regular intervals. Clients will be informed about significant changes in the policy.