In accordance with the provisions of Article 55 h) of Law 5/2015 of April 27 relating to the Law on the Promotion of Business Financing, one of the requirements for obtaining and/or maintaining authorization as a Participatory Financing Platform (hereinafter "PFP") is to have an Internal Code of Conduct (hereinafter "ICC" regulating possible conflicts of interest and the terms of participation of managers, directors, employees and representatives in the financing applications that are implemented via the PFP.
For these purposes, this ICC identifies for PFP CAPITAL CELL, S.L.U. (hereinafter "Capital Cell" or the "Company") the types of conflicts of interest that may potentially arise in the scope of its activities and, subsequently, indicates the procedures and measures put into place to manage the conflicts of interest in such a way as to ensure that the activities of Capital Cell are carried out independently and without detriment to the interests of its clients (including in said concept, as applicable in each case, both project promoters and registered users and investors).
Without prejudice to any other obligations that may be required by virtue of their employment or business relationship, from the applicable legislation or the partnership agreement, the Internal Code of Conduct determines the criteria for behaviour and actions to be followed by those to whom they apply in relation to conflicts of interest, confidential information and the treatment of classified information.
II. SUBJECTIVE SCOPE
The Internal Code of Conduct will apply to all employees and executives of the Company, to the members of its administrative body, to the members of any advisory bodies that may have been set up, even if they are not employees, as well as to any other persons who provide advisory services or collaborate with Capital Cell and any other person who, in the opinion of the Company's management body, should be included in its subjective scope due to their special relationship with the Company and/or the entities managed by the Company (hereinafter, the Obligated Persons").
III. OBJECTIVE SCOPE
A conflict of interest will be considered to exist when there is a concurrence in the same Obligated Person or decision-making area of Capital Cell, of at least two conflicting interests that could compromise the impartial provision of services by Capital Cell.
In particular, a conflict of interest shall be considered to exist when:
- a) The Obliged Person may obtain a financial benefit, or avoid a financial loss , at the expense of a client;
- b) The Obligated Person has an interest in the result of a service rendered to the customer or of a transaction carried out on behalf of the customer, which is different from the interest of the client in that result;
- c) The Obligated Person has financial or other incentives to favor the interests of another client or group of clients over the interests of a client;
- d) The Obligated Person carries out the same activity as the client;
- e) The Obligated Person receives or will receive from a person other than the client an incentive related to a service provided to the customer, in the form of money, goods or services, other than the usual commission or remuneration for that service.
For a conflict of interest to exist, it is not enough that Capital Cell or another Obligated Person may make a profit if there is not also a possible prejudice to a client, or that a client may make a profit or avoid a loss, if there is no possibility of loss for another client.
The following are the main situations in which conflicts of interest may arise:
- a) Situations in which the Obligated Person has access to non-public information on
- clients that puts it at an advantage over the rest of the market.
- b) Cases in which the Obligated Person potentially has an interest other than the interest
- of the client in relation to the provision of a service or the execution of a transaction.
- c) Situations in which recommendations or the presentation of
- projects can be biased to benefit the interests of the Obligated Person.
- d) Carrying out activities, which directly or indirectly may involve
- direct or indirect competition with a client.
- e) Situations of conflict between different departments of Capital Cell with conflicting business objectives, which may on occasion carry out operations of a similar or overlapping nature with different orders.
- f) The use of confidential information by the Obligated Persons for personal purposes.
- g) Advancing personal transactions of an Obligated Person to those of clients
- to their detriment.
- h) Giving preferential treatment to a client with respect to the other clients, preventing the service from being provided equitably.
- i) Other cases that may give rise to a conflict of interest.
In case of doubt regarding a situation that, in the opinion of an Obligated Person, may or may not be considered to generate a conflict of interest, it will be understood that the situation has generated or may generate such conflict for the purposes of the provisions of this document.
IV. PREVENTIVE AND CORRECTIVE MEASURES FOR CONFLICTS OF INTEREST
IV.1.- Guiding Principles of the Company's Actions.
In carrying out its business, the Company will respect the principles of neutrality, diligence, transparency, orderly and prudent management, in defence of the interests of the promoter and/or investor clients of Capital Cell. In particular, the Company will guarantee non-discrimination and equal treatment among all of them.
The Company must have the adequate means to carry out its activity and have the appropriate internal controls in place, ensuring that it has all the necessary information about clients, keeping them adequately informed.
The Obligated Persons, when rendering their services to Capital Cell clients, will always act with honesty, loyalty, impartiality, freedom of judgment and professionalism, and in the best interest of their clients.
On the other hand, they must refrain from intervening in or influencing the making of decisions that may affect the persons or entities with which there is a conflict and must inform the administrative body or, where applicable, the monitoring body created for this purpose, of any conflicts of interest in which they find themselves due to their activities outside of Capital Cell, their family relationships, their personal assets, or any other reason.
IV.2.- Conflict List.
The Company will maintain an updated "Conflict List" in which the following will be noted:
- The identity of the persons designated as "Obligated Persons" for the purposes of the present Regulations.
- With respect to the members of the administrative body, senior executives and shareholders with significant stock in the Company: the identity of (i) their spouses or persons with whom they live in an analogous affectionate relationship; and (ii) their relatives up to the second degree of consanguinity or affinity.
- Both with respect to the Obligated Persons and with respect to the family members referred to in the preceding paragraph, the companies in which they hold a direct or indirect stake, or in which they hold a position in their administrative body, will be stated.
- Likewise, a list of companies in which Capital Cell has a direct or indirect stock will be included.
For the purposes of drawing up this list, the members of the administrative body, the Company's senior executives and shareholders with significant stocks must send an annual communication informing the Company:
- The identity of their spouses or persons with whom they live in an analogous affectionate relationship.
- The identity of their relatives up to the second degree of consanguinity or affinity.
- Companies in which they themselves, their spouses or analogous relationship and/or their family members indicated above have a direct or indirect stake or hold positions in the administrative body.
Updating the list will be the responsibility of the administrative body, which may delegate it to the legal or operational departments.
During the review process of projects proposed for publication on the Company's platform, the contents of the Conflict List will be used. The persons responsible for the review must identify cases in which the company promoting a project, its partners or members of its administrative body are among the entities and persons included in the Conflict List. In the event that such a circumstance is found to exist with respect to a project, the procedure will be as set out in sections IV.4 and IV.5 below. Likewise and when appropriate, the provisions of Section V (Related Projects) will apply.
IV.3.- Other Preventive Measures.
In order to prevent and correct potential situations leading to conflicts of interest, the Obligated Persons must adopt the following measures:
- a) They will not make personalized recommendations to clients about the projects published on the platform.
- b) They will not, under any circumstances, disclose to any clients the operations carried out by others except in the event that all of them participate and are part of the same operation.
- c) They will not encourage the carrying out of a transaction by one client in order to benefit another.
- d) They will, in relation to investment services and activities, and specific auxiliary services and activities carried out, define the circumstances that give or may give rise to a conflict of interest.
- e) In case of conflict between clients, they will communicate it to those affected, and carry out the services or operations in which the conflict is manifested only if those affected consent to it.
- f) Between different departments of Capital Cell, certain areas may be involved in the same conflict of interest because they have different objectives with respect to their clients. In order to avoid this type of situation, the following preventive measures should be taken:
- (i) Each area will make its own decisions in an impartial and independent manner;
- (ii) The client must be informed at all times of the decisions of each of the areas involved in their personal situation;
- (iii) If any area believes that it may enter into a conflict of interest with another area, it will automatically warn the other area and the client of this fact, indicating the possible dangers that may arise from this conflict.
- g) Employees, managers and directors of Capital Cell may not make use of any confidential or privileged information to which they may have access in the course of their work at Capital Cell, which could favour or represent an added advantage for themselves, their family members, close relatives or other clients of Capital Cell.
- h) Employees, managers and directors of Capital Cell will act at all times with loyalty to the client, putting the client's interest before their own interests.
Likewise, insofar as their impartiality may be affected and, indirectly, may harm the interests of one or more clients, the following general guidelines are established to prevent and/or manage conflicts of interest that may have arisen:
- a) As representatives of Capital Cell, the directors will at all times display a public conduct in accordance with generally accepted social behavior.
- b) Holding a management or administrative position at Capital Cell implies a high degree of responsibility, which must be reflected, among other aspects, in the necessary dedication of time to the functions carried out so that they are carried out with the highest standards of service quality.
- c) In their relations with clients, employees, managers and directors of Capital Cell may not accept commissions, gifts or special treatment of any kind that could affect or condition their decisions in the performance of their duties. However, this category does not include small gifts of little value from clients, representative of attention or courtesy, and which are a normal practice within business relations. No amount in cash should ever be accepted.
- d) Capital Cell expects from its employees, managers and directors total confidentiality and strictly professional use of all confidential or privileged information to which they have access. Employees, managers and directors of Capital Cell are prohibited from accessing information of any nature that is not essential to carrying out their work in Capital Cell.
- e) Employees, managers and directors will refrain from granting, approving or influencing the approval of projects or business between Capital Cell and its clients in which their personal interests may clash with the interests of Capital Cell.
- f) Employees, managers and directors of Capital Cell must make available to Capital Cell the remuneration they receive as allowances, fees or any other form, from third parties, when acting on behalf of or in the name of Capital Cell without prejudice to the prohibition established in paragraph (c).
Action in the event of a conflict of interest of the Obligated Persons.
In the event of the existence of a conflict of interest in accordance with the provisions of the Internal Code of Conduct, the Obligated Persons concerned will observe the following general principles of action:
- a) Independence: They shall act at all times with freedom of judgment, with loyalty to the Company, its shareholders and clients, refraining from giving priority to their own interests at the expense of those of the Company or those of some shareholders or clients at the expense of others.
- b) Abstention: They must abstain from intervening in or influencing the making of decisions that may affect the persons or entities with which conflict exists and from accessing or using confidential information that affects said conflict, absenting themselves from the consultative or decision-making bodies during the process of debate and decision making that affects the persons or entities with which conflict exists.
- c) Communication: The Obligated Persons must inform the Company's administrative body of any possible conflicts of interest in which they may find themselves due to their activities outside the Company, their family relationships, their personal assets or any other reason, with respect to the Company, clients or projects that are under analysis with a view to possible publication by Capital Cell.
Notification of conflicts of interest.
In cases in which it is not possible to avoid a situation of conflict of interest or potential conflict of interest, the Obligated Persons must inform the administrative body of Capital Cell so that it can ensure, if it deems appropriate, that adequate means are put into place to ensure independent decision making.
The notification must be made immediately and in writing after the Obligated Person becomes aware of the existence or possible existence of the corresponding conflict of interest.
Upon receipt by the management body of Capital Cell of the aforementioned notification, it may: (a) simply take note of the notification (which shall not be express) in which case the Obligated Person will simply be obliged to comply with the provisions of these Regulations or (b) issue the corresponding instructions to ensure that the necessary mechanisms have been put in place to avoid possible conflicts of interest.
IV.6.- Classified information.
Persons to whom these Regulations apply who possess any kind of classified information, understood as any information of a specific nature that is related directly or indirectly to promoter clients or projects that are submitted to the Company for publication, which is not public and which, if made or have been made public, could influence the assessment of the project or the promoter client:
- a) Will safeguard such information and refrain from preparing or carrying out any type of transaction in relation to the client or project to which the information refers.
- b) Will not communicate such information to third parties, except in the normal course of their work, position or profession. It will be understood that the Obligated Persons who communicate information (i) to the administrative and management bodies of the Company for the proper execution of their duties and responsibilities; (ii) to the Company's external advisors for the proper execution of the assignment entrusted to them shall be deemed to be acting in the normal course of their work, position or profession.
- c) Will not recommend or advise a third party to participate in the client's project based on such information.
- d) Will establish security measures for their safekeeping, filing, access, reproduction and distribution.
IV.7.- Consequences of non-compliance
Failure to comply with the provisions of the Internal Code of Conduct will be considered misconduct, the seriousness of which shall be determined in the procedure that is followed in accordance with the existing provisions. Non-compliance by the Obligated Persons who have an employment contract with the Company shall be considered professional misconduct.
V. RELATED PROJECTS
The provisions of this Internal Code of Conduct will apply without prejudice to the power and potential of Capital Cell and persons related to Capital Cell (as defined in this section) to participate in projects published on the portal or web page of Capital Cell, provided that the following requirements are met:
- a) The participation may not exceed 10% of the financing objective of each project nor allow control of the company, in the terms set out in Article 42 of the Code of Commerce.
- b) Capital will not participate in projects published by other crow dfunding platforms .
- c) Capital Cell will inform investors in a clear and accessible way of the amount of their participation, or that of the persons previously listed, in each project, likewise publishing on the website the criteria of the internal policy that, if applicable, exists to decide their participation in the projects.
Likewise, this Internal Code of Conduct will apply without prejudice to the power and potential of Capital Cell as well as of persons related to it (as defined in this section) as promoters of participative financing projects, provided that the following requirements are met:
- a) Capital Cell may only publish projects of which it is the promoter on its own website.
- b) The aggregate funding target of the projects promoted by Capital Cell will not exceed in each fiscal year 10% of the funds actually raised by all the crowdfunding projects published on its web page in the immediately preceding fiscal year.
- c) Capital Cell will immediately inform investors in a clear and accessible way of the projects in which it or persons related to it are promoters.
For the purposes of the provisions of this Regulation, persons related to Capital Cell will be understood to be the directors, senior executives and shareholders with significant stakes in Capital Cell and their spouses or persons with whom they live in an analogous affectionate relationship, as well as their relatives up to the second degree of consanguinity or affinity.
The Internal Rules of Conduct shall enter into force on the date of their approval.
VII. REVIEW OF THE CONFLICT OF INTEREST POLICY
In order to maintain exhaustive control of situations susceptible to creating a conflict of interest that may involve a significant risk of prejudice to the interests of one or more clients, these regulations shall be reviewed annually by the administrative body of Capital Cell and shall be duly updated as necessary to reflect the activities of Capital Cell, the development of projects and services, the type of operations initiated by clients and the actual cases in which this policy has been applied.
APPROVED ON 01/02/2020