Imperial Capital Intl LLP
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Legal Information

Imperial Capital (International) LLP

IFPR Disclosure Statement

 

I. Introduction to Imperial Capital (International) LLP

 

This document is designed to meet the disclosure obligations of Imperial Capital (International) LLP (the “Firm”).

 

The Firm is subject to the Investment Firms Prudential Regime (“IFPR”). The Firm is categorised as a small and non-interconnected investment firm (“SNI Firm”).

 

The disclosures below are made pursuant to the Prudential Sourcebook for MiFID Investment Firms (“MIFIDPRU”) of the Financial Conduct Authority (“FCA”) handbook of rules and guidance (the “FCA Handbook”). This disclosure document has been prepared by the Firm in accordance with the requirements of Chapter 8.6 of MIFIDPRU. The Firm issues such disclosures at least annually. Unless otherwise stated, all information is provided as of 29 March 2023.

 


II. Remuneration Disclosure Requirements

 

PART A: QUALITATIVE DISCLOSURES

 

1. Objectives of the Firm’s Financial Incentives

 

The Firm’s financial incentives aim to create a direct link between reward and performance and to incentivise staff in alignment with the Firm’s risk profile, including potential conflicts of interest. The Firm’s remuneration structure is evaluated regularly to ensure its continued alignment with relevant regulatory requirements. The objective of the remuneration structure is to align individual and team contributions with performance objectives in a manner that:

  • is consistent with and promotes sound and effective risk management;
  • does not encourage excessive risk taking;
  • includes measures to avoid conflicts of interest in accordance with the Firm’s policies, including the Integrity Policy; and
  • is in line with the Firm’s business strategy, regulatory obligations, objectives, values, and long-term interests.

 

2. Fixed and Variable Remuneration

 

Total remuneration is determined in light of:

  • individual performance both commercially and with reference to the appraisal methods detailed in the Firm’s Remuneration Policy;
  • the performance of the relevant business unit; and
  • the results of the Firm as a whole.

 

The assessment of performance to determine variable remuneration considers financial as well as non-financial criteria. The non-financial criteria are intended to: (i) form a significant part of the performance assessment process; (ii) where appropriate, override financial criteria; (iii) consider the individual’s conduct and which will make up a substantial portion of the non-financial criteria; and (iv) evaluate the individual’s performance in relation to effective risk management and compliance with the Firm’s policies. All staff are eligible to receive variable remuneration.

 

3. Remuneration Governance and Decision-making Procedures

 

The Firm has set up governance processes aimed at ensuring the oversight of rewards, management of any potential conflicts of interests, and the review of the alignment between reward and performance.

  • The Firm’s Remuneration Policy is reviewed and approved annually by the Firm’s Board. Additionally, the Remuneration Policy is subject to review and comment by the Firm’s senior manager for compliance oversight (“SMF 16”) as well as representatives of Imperial Capital (International) LLP Human Resources and Finance departments.
  • Remuneration decisions are made by Imperial Capital (International) LLP following procedures implemented by the Human Resources department which include consultation with line managers of personnel and presentation and approval by senior leadership. Such remuneration decisions include application of relevant financial and non-financial criteria (as further described above).
  • The Firm’s SMF 16 holds periodic meetings with International HR and Senior and Board members of Imperial Capital (International) LLP to discuss compliance and conduct matters relevant to the Firm and/or specific personnel. The Firm is a SNI Firm and does not have a remuneration committee.

 

4. Key Characteristics of Remuneration Policies and Practices

 

The Firm has adopted a Remuneration Policy which:

  1. has been prepared in line with the Firm’s business strategy, objectives, values and interests, including consideration of the Firm’s risk appetite and strategy, the Firm’s culture and values, and any long-term effects;
  2. is designed to ensure that the Firm maintains and applies a sound and prudent remuneration process which does not impair compliance with any of its obligations; and
  3. is intended to identify and manage any conflicts of interest and promote sound and effective risk management and prudent risk taking.

 

CATEGORIES OF REMUNERATION:

 

The Firm provides the following categories of remuneration to its staff, which may be fixed, or variable as specified below:

  • base salary (fixed); and
  • discretionary bonuses (variable).

 

REMUNERATION CRITERIA:

 

Remuneration is based on an assessment of both financial and non-financial criteria generally including the following elements:

 

Criteria Pertaining to the Firm:

  • the performance and profitability of the Firm;
  • the Firm’s risk appetite and strategy;
  • the Firm’s desire to identify and manage any conflicts of interest; and
  • the Firm’s culture and values.

 

Criteria Pertaining to Individual Business Units:

  • the performance and profitability of the relevant business unit;
  • the objectives set for the relevant business unit;
  • where applicable, the long-term effects of the decisions made by the business unit; and provided, however, that
  • personnel in control functions will be compensated, amongst other factors, by reference to objectives linked to those functions (i.e., independently of the performance of the business areas they control).

 

Criteria Pertaining to Individuals:

  • the individual’s responsibilities and history with the Firm;
  • performance in relation to the individual’s job description and terms of employment;
  • the individual’s compliance with the Firm’s policies; and
  • the individual’s adherence to the Firm’s culture and values.

 

Imperial Capital (International) LLP

 MIFIDPRU 8 Disclosures

31 December 2022

 

1. Introduction

 

1.1 Background and Disclosure

Imperial Capital (International) LLP (“Imperial” or the “Firm”) is a UK limited liability partnership authorised and regulated in the UK by the Financial Conduct Authority (“the FCA”) to provide integrative sales and trading services to its international clients. In January 2022, the FCA implemented the ‘Investment Firms Prudential Regime’ (“IFPR”). Under the IFPR, Imperial must make certain public disclosures as per Chapter 8 of the Prudential Sourcebook for MiFID Investment Firms in the FCA Handbook (“MIFIDPRU 8”).

Imperial is classified under MIFIDPRU as a Non-Small and Non-Interconnected MIFIDPRU investment Firm (“Non-SNI MIFIDPRU Investment Firm”). Imperial is below the thresholds set out in MIFIDPRU 7.1.4R(1), and as such Imperial is required by MIFIDPRU 8 to disclose information on the following areas:

  • Risk management objectives and policies;
  • Governance arrangements;
  • Own funds;
  • Own funds requirements; and
  • Remuneration policy and practices.

The purpose of these disclosures is to give stakeholders and market participants an insight of the risks to the Firm’s culture and data on the Firm’s own funds and own funds requirements, increase transparency, market confidence and giving an insight into the financial health of businesses and how they are run.

The Firm’s remuneration arrangements disclosed in section 6 of this document have been prepared according to the relevant rules applicable to Imperial in part 19G of the Senior Management Arrangements, Systems and Controls legislation (SYSC 19G).

 

1.2 Structure, Operating Model and Principal Activities

The Firm’s core service is to provide a platform offering sophisticated institutional sales. The Firm is a matched principal broker which complements the existing fixed income sales and trading franchise business of Imperial Capital LLC. The Firm focuses on selling the entire credit spectrum and capital structure to its European institutional clients.

The Firm’s institutional sales and trading business specialise in understanding and transacting in all components of an issuer’s capital structure. The Firm has an experienced sales force that markets opportunistic and real-time trading opportunities based on their proprietary research. The Firm’s goal is superior execution for institutional investor clients, particularly where they can capitalise on market inefficiencies and other unique opportunities identified by their research.

The Firm is authorised to carry out the following activities and services as per the FCA register:

  • Advising on investments (except on Pension Transfers and Pension opt Outs)
  • Arranging (brining about) deals in investments
  • Arranging safeguarding and administration of assets
  • Dealing in investments as agent
  • Making arrangements with a view to transactions in investments
  • Dealing in investments as principal
  • Agreeing to carry on a regulated activity

The Firm may control but not hold client money.

 

2. Risk Management objectives and policies (MIFIDPRU 8.2)

 

This section describes Imperial’s risk management objectives and policies for the categories of risk addressed by the requirements of the Firm in the following areas:

  • Own funds
  • Liquidity
  • Concentration risk

2.1 Statement of Risk Appetite

Imperial has adopted a low overall risk appetite in respect to all types of material harms that arise in the course of pursuing its business model and strategy. The Firm’s low-risk appetite is reflected in its maintenance of own funds and core liquid assets well in excess of its own funds and liquid assets requirements, respectively, which is indicative of the fact that the Firm seeks to minimise the risk of being unable to meet its liabilities as they fall due. Measures are nonetheless implemented to ensure that risks that fall within the Firm’s risk appetite are mitigated to the extent possible. However, where an identified potential harm is deemed sufficiently remote in terms of the likelihood of its occurrence, no risk management action is taken, because if the risk were to materialise then the Firm would implement the wind down plan. The Firm accordingly within its wind down plan has quantified adequate ‘additional’ own funds and liquid assets to support an orderly wind down. This is reflected within the Firm’s threshold requirements for capital and liquid assets.

 

2.2 Risk Management

Imperial has established a risk management process to ensure that it has effective systems and controls in place to identify, monitor and manage risks arising in the business. Risk management for Imperial is the responsibility of the senior management team.

Own funds

To calculate the Firm’s own funds threshold requirement, Imperial identifies and measures the risk of harms applicable to the Firm and considers these risks with regards to its ongoing operations and from a wind-down perspective. The Firm then determines the extent to which systems and controls in place mitigate the Firm’s risks and the potential for a disorderly wind-down, and thereby determines the appropriate amount of additional own funds required on top of the K-factor requirement to cover the residual risks.

Imperial’s risks are controlled by a set of compliance and operational policies and procedures. This also links to the Internal Capital Adequacy and Risk Assessment process (ICARA) as a continuous internal review process that supports the senior management in the decision-making process and its exercise of oversight and control over the Firm. As explained further, the ICARA process is an important component that feeds into and derives from the policies, procedures, systems and controls that play a key role to ensure that the Firm operates effectively. 

Concentration

The Firm does deals on own account however under a matched principal exemption therefore it is not subject to position risk (specific or general) as a result the Firm does not have a concentration risk (K-CON) capital requirement. The Firm does monitor the concentration of assets to a client/group of connected clients on an ongoing basis as part of the monthly management accounts process.

Liquidity

Liquidity risk is the risk that the Firm may be unable to generate sufficient cash or other liquid assets in a timely manner to meet its commitments as they become due. Imperial’s systems, policies and processes in place allow it to monitor and manage regulatory capital requirements, working capital needs and cash flows to help provide a sufficient buffer against liquidity risk. Given the nature of the Firm’s business, financial liabilities are on the whole short term and the Imperial maintains adequate cash resources to cover its immediate liabilities.

 

3. Governance arrangements (MIFIDPRU 8.3)

 

3.1 Senior management team

Imperial believes that effective governance arrangements help the Firm achieve its strategic objectives while also ensuring that the risks to the Firm, its stakeholders and the wider market are identified, managed, and mitigated.

The senior management team is responsible for determining business strategy and risk appetite along with designing and implementing a risk management framework that recognises the risks that our business faces, determine how those risks may be mitigated and assesses the ongoing management of those risks. The Firm’s senior management will meet on a regular basis and discuss the projections for profitability and capital management, business planning and risk management for the business.

The following individuals and the SMF’s they hold make up the Senior Management team at Imperial:

 

Name

Role

Brian Sinclair Robertson

SMF1 Chief Executive and SMF27 Partner

Christopher Alan LoCicero

SMF16 Compliance Oversight

Andrew Roy Weller

SMF17 Money Laundering Reporting Officer (MLRO)

Mark C Martis

Chief Operating Officer and Chief Financial Officer of the LLC

 

3.2 Approach to Diversity of the Senior Management Team

Imperial’s approach to diversity within Management is consistent with its Parent’s core values. Imperial is committed to promoting equality, diversity and inclusion. The Group recognises that having diverse teams is essential to creating a well-balanced structure that encourages equality throughout the business and in turn maintains a desirable, committed, and efficient workplace.

Management has a responsibility to lead by example and adhere to the Diversity Vision Statement, which helps promote the Group aim of equal opportunities. As such, there is a strong emphasis on the recruitment process, taking into consideration not only experience and talent but also gender, ethnicity, age, and education as well as clear focus on talent development and career growth for diverse professionals.

The Group is focused on developing a recruitment and selection process for jobs in a way that ensures no unlawful discrimination occurs. Vacancies should generally be advertised to a diverse section of the labour market. Advertisements should avoid stereotyping or using wording that may discourage particular groups from applying. Furthermore, the Group strives to enable equal opportunity for long-term career growth and development for all associates.

 

4. Own Funds (MIFIDPRU 8.4)

 

4.1 Composition of Regulatory Own Funds

Imperial’s own funds are made up of Common Equity Tier 1 (CET1) capital. As at 31 December 2022, the Firm had sufficient regulatory capital to cover its own funds requirements. This can be seen summarised in the table below.

 

Composition of regulatory own funds (OF1)

 

Item

Amount

(£000’s)

Source based on reference numbers/letters of the balance sheet in the audited financial statements

1

OWN FUNDS

2,013

 

2

TIER 1 CAPITAL

2,013

 

3

COMMON EQUITY TIER 1 CAPITAL

  

4

Fully paid up capital instruments

2,013

Page 12

5

Share premium

 

6

Retained earnings

 

7

Accumulated other comprehensive income

 

8

Other reserves

 

9

Adjustments to CET1 due to prudential filters

 

10

Other funds

 

11

(-) TOTAL DEDUCTIONS FROM COMMON EQUITY TIER 1

 

19

CET1: Other capital elements, deductions and adjustments

  

20

ADDITIONAL TIER 1 CAPITAL

 

21

Fully paid up, directly issued capital instruments

 

22

Share premium

 

23

(-) TOTAL DEDUCTIONS FROM ADDITIONAL TIER 1

 

24

Additional Tier 1: Other capital elements. Deductions and adjustments

 

25

TIER 2 CAPITAL

 

26

Fully paid up, directly issued capital instruments

 

27

Share premium

 

28

(-) TOTAL DEDUCTIONS FROM TIER 2

 

29

Tier 2: Other capital elements, deductions and adjustments

 

 

4.2 Reconciliation of Regulatory Own Funds to the Audited Financial Statement

The below table shows the reconciliation of regulatory own funds to balance sheet in the audited financial statements:

Reconciliation of regulatory own funds to balance sheet in the audited financial statements

 

 

a

 

b

 

 

(£’000)

Balance as per audited financial statements

 

Cross-reference to template (OF1)

 

 

31/12/2022

 

 

Assets

1 – Fixed Assets

149

148,729

  

2 – Debtors

2,455

2,454,717

  

3 – Cash at bank

2,460

2,460,409

  
     
 

Total Assets

5,063,855

  

Liabilities

1 – Creditors (Due within 1 Year)

2,046

2,045,610

  
 

Total Liabilities

2,045,610

  

Members’ other interests

1 – Members capital

2,013

2,012,754

 

4

2 – Members capital

(Without regulatory approval)

26

26,067

  

3 – Other reserves

979

979,424

  
 

Total Equity

3,018,245

  

 

5. Own funds requirements (MIFIDPRU 8.5)

 

The tables below summarise the Firm’s own funds requirements.

 

5.1 Permanent Minimum Capital, K-Factor and Fixed Overhead Requirement

The below table shows the breakdown of the own funds requirement. Imperial is required at all times to maintain own funds that are at least equal to the Firm’s own funds requirement. The own funds requirement is the higher of the Firm’s PMR, FOR and KFR:

Requirement as at 31 December 2022

£’000

Permanent Minimum Capital Requirement (PMR)

750

Fixed Overhead Requirement (FOR)

1,140

–        Based on 2021 audited statements

1,140

K-factor Requirement (KFR)

230

–        K-NPR Requirement

217

–        K-DTF Requirement

13

Own Funds requirement

1,140

 

5.2 Approach to Assessing the Adequacy of Own Funds

Imperial is subject to MIFIDPRU 7 which requires Firms to use the Internal Capital Adequacy and Risk Assessment (ICARA) process to identify whether they comply with the Overall Financial Adequacy Rule (OFAR). The ICARA process is the collective term for the internal systems and controls which a Firm must operate to identify and manage potential harms which may arise from the operation of a Firm’s business, and to ensure that its business can be wound down in an orderly manner. The OFAR requires that a Firm must, at all times, hold own funds and liquid assets which are adequate, both as to their amount and their quality to ensure:

  • The Firm is able to remain financially viable throughout the economic cycle, with the ability to address any material potential harm that may result from its ongoing activities; and
  • The Firm’s business can be wound down in an orderly manner, minimising harm to consumers or markets.

The adequacy of the ICARA process will be assessed at least on an annual basis, or more frequently if there is a material change in the business model/risk profile.

Additional Own Funds Requirement

The additional own funds requirement is the amount of capital identified by Imperial that is necessary to mitigate risks to ensure the viability of the Firm throughout economic cycles and to ensure it can be wound down in an orderly manner. Within the ICARA, Imperial identifies, and measures risk of harms faced by the Firm and considers these risks with regards to its ongoing operations and wind-down. The Firm then determines the degree to which systems and controls alone mitigate risk of harm and the risk of a disorderly wind-down. Imperial is currently a Non-SNI Firm and the Firm’s ICARA process is operated on a solo basis, however the firm is part of an Investment Firm Group and therefore the wider Group risks are considered in the ICARA process.  

Ongoing Operations

As a non-SNI MIFIDPRU Firm, Imperial has assessed all material harms posed to clients, the market and itself resulting from its ongoing operations, taking into consideration the existing controls in place. Imperial has concluded that an additional £731,250 capital and £nil liquidity are required to mitigate the harm arising from these risks.

Wind Down

As part of the wind-down plan, Imperial has considered the most likely scenarios to initiate a wind down relate to the strategic operational decision by the Parent company or being faced with significant poor performance. The Firm concluded that the assessment from wind down as calculated under MIFIDPRU 7.6 as at 31 December 2022 is £1,139,977.

Overall Financial Adequacy Rule (OFAR)

Imperial adopts a 10% buffer (‘Early Warning Indicator’) over its own funds requirement in order to maintain a healthy own funds surplus above the requirement. If Imperial triggers this warning, then a dialogue would be initiated with the FCA to explain the actions to be taken to rectify this.

The below table shows the OFAR as at 31 December 2022, including the own funds threshold requirement:

 

Date

31/12/2022 (£000’s)

 

 

Own Funds

 

Common Equity Tier 1

2,013

Additional Tier 1

Tier 2

Total Regulatory Capital

2,013

  

Own Funds Requirement

 

Permanent Minimum Requirement (A)

750

Fixed Overhead Requirement (B)

1,140

K-factor Requirement (C)

230

Overall Financial Adequacy Rule (OFAR)

1,140

 

 

Assessment from ongoing operation

 

As per Risk Assessment carried out through the ICARA (D)                                                                

961

  

Assessment from wind-down

 

As per wind down planning (E)

1,140

  

Own Fund Threshold requirement

 

Higher of (A), (D) or (E)

1,140

  

Early Warning Indicator (110%)

1,254

  

Capital Adequacy Surplus

759

 

6. Remuneration (MIFIPRU 8.6)

 

Imperial has a Remuneration Policy in place which is in accordance with the relevant rules and guidance for the Firm’s remuneration code as contained within the FCA’s SYSC Sourcebook of the FCA’s Handbook.

The Remuneration Code (the “RemCode”) covers an individual’s total remuneration – fixed and variable. The Firm incentivises staff through a combination of the two.

Imperial’s Policy is designed to ensure that it complies with the RemCode and its compensation arrangements:

  1. Be proportionate to the size, scope, and complexity of its activities;
  2. Be consistent with and promote sound and effective risk management;
  3. Be in line with the Firm’s business strategy and objectives, values and long-term interests;
  4. Contain measures to avoid conflicts of interest, encourage responsible business conduct and promote risk awareness and prudent risk-taking; and
  5. Are on a gender neutral basis.

Proportionality

The FCA has sought to apply proportionality with respects to Firm’s disclosures. Imperial’s disclosure is made in accordance with its size, internal organisation, nature, scope and complexity of its activities.

Application of the Requirements

The Firm completes the remuneration disclosure annually on the date the Firm publishes its annual financial statements. As appropriate, this disclosure will be made more frequently if there is a major change to the Firm’s business model.

Summary of the Firm’s approach to remuneration for all staff, including the decision-making procedures and governance in adopting the remuneration code:

  • The Firm is relatively small with limited scope and complexity compared to many firms regulated by the FCA. The Firm’s remuneration policy is similarly simple structure applying various combinations based on role, level of experience, time of tenure with the Firm.
  • The Firm’s policy will be reviewed as part of its annual review of its process and procedures, or following a significant change to the business requiring an update to its ICARA.
  • Individual and total payments of variable remuneration must not affect the Firm’s ability to ensure a sound capital base or prejudice the interests of clients. All awards of options are approved solely by the Board, decisions being made on the basis of the same criteria.
  • The assessment of staff performance is integral with the firm’s appraisal processes.
  • The Firm has identified five ‘Material Risk Takers’ based on the provisions laid out under SYSC 19G.5.1R.

Key characteristics of the remuneration policies and practices:

  • Individuals are rewarded based on their contribution to the overall strategy of the business. Other factors, such as performance, integrity, respect, teamwork and professionalism are taken into account when assessing the performance of the staff.
  • Remuneration for all staff is divided into four components: base salary, benefits, commissions, and participation in the bonus pool. Base salary and benefits are considered fixed remuneration. Commissions and participation in the bonus pool are considered variable remuneration.
  • Fixed remuneration is determined by the experience and level of aptitude for the role and reflects the employee’s professional experience and responsibilities within the firm as set out in their terms on employment. This remuneration is permanent, pre-determined, non-discretionary, non-revocable, and not dependent on performance.
  • The bonus pool provides for a certain proportion of the Firm’s annual profits to be retained for the maintenance of a sound capital base. In addition, the Firm reserves the right to defer or cancel payments requirements dictate so.
  • The Firm does/does not apply malus and claw back to variable pay.
  • The Firm does/does not have guaranteed variable remuneration.
  • Severance policy

Aggregate quantitative information on remuneration:

With respect to the financial year ended 31 December 2022, the total amount of remuneration awarded to all staff interpreted under SYSC 19G.1.24G was as follows:

 

Fixed remuneration

£

Variable remuneration

£

Total

 

£

Senior Management and Other Material Risk Takers (MRTs)*

£936,536

£3,165,715

£4,102,251

All Other Staff

£1,591,317

£4,422,666

£6,013,983

Total

£2,527,853

£7,588,381

£10,116,234

*Per MIFIDPRU 8.6.8(7) the firm may omit disclosures splitting information for senior management and other material risk takers senior managers, where splitting the information between these categories would lead to the disclosure of information about one or two people. The Firm employed two senior managers in the reporting period, therefore information regarding Senior Managers has been aggregated with the other Material Risk Takers for the purposes of this disclosure.

The firm did not pay any Severance Payments during the financial year 31 December 2022.

Identification of Conflicts

The Principals in conjunction with the business line manager together with Legal and Compliance take respnsability for identifying and designing conflict management controls faced by the Firm in its day to day business in the Conflicts Inventory below. This inventory will be periodically reviewed or updated when a new conflict is identified.

 

Conflict Avoidance

Where a conflict is identified, the Firm will seek to organise its business activities in a manner which avoids such a conflict. However, the avoidance of all conflicts is generally not feasible in a commercial environment.

 

Conflict Management

Where conflicts are unavoidable, the Firm will take appropriate measures to mitigate and manage such conflicts in a manner that seeks to ensure that the Firm or its Personnel are not advantaged, and that no Client is disadvantaged.

 

Conflicts Disclosure

Where the Firm is not reasonably confident that it is able to manage a particular conflict to adequately protect the interest of a Client, the general nature and/or sources of conflicts of interest will be clearly disclosed to the Client before undertaking any business.

 

Conflict Monitoring

The Firm has implemented a number of procedures and controls to detect conflict situations as they arise, and the Principals will update the Conflicts Inventory accordingly. Once conflicts have been identified, further procedures and controls monitor the effectiveness of the management arrangements of such conflicts.

In addition, the Firm’s compliance monitoring programme incorporates a certain number of the specific tests aimed at reviewing its performance in the management of conflicts that the Firm has indentified.

 

Education and Awareness

All Personnel receive a copy of the Firm’s Compliance Manual containing the Firm’s conflicts arrangements. In addition, all Personnel are required to give an undertaking of adherence to the Firm’s compliance procedures, including personal account dealing and receipt of gifts and inducements.

All Personnel also receive both formal and informal training in respect of conflicts of interest generally, and on specific or potential conflicts to the Firm.

Imperial Capital (International) LLP (the “Firm”)

Further to the provisions of COBS11.2, the Firm is obliged to act in the best interests of its Client(s), and as such, takes reasonable steps to achieve best execution.

 

This policy outlines the Firm’s approach to achieving best execution, with respect to the classes of instrument the Firm may transact in, and the entities to which the Firm may transmit such orders.

 

This policy has been disclosed to the Firm’s Client(s) and additional subsequent disclosure will also be made in the event of any material changes to its content.


Introduction

The policy sets out the arrangements Imperial Capital (International) LLP has put in place to meet its obligations under the Markets in Financial Instruments Directive (“MiFiD”) to give best execution to professional clients and to comply with client order handling rules.

 

In addition, to meet these obligations we must provide a disclosure statement to our clients on our execution policy.

 

MiFID requires firms to obtain the best possible result (rather than merely the best price) and to take into account the following criteria for determining the relative importance of the execution factors for the client (or types of client) that the firm has:

  • the characteristics of the client including the categorisation of the client as retail or professional;
  • the characteristics of the client order (if there is a client order);
  • the characteristics of financial instruments that are the subject of that client order;
  • the characteristics of the execution venues/brokers to which that order can be directed.

Execution factors

A number of other factors can be taken into account when providing best execution to clients such as:

  • Price
  • Costs of the transaction
  • Speed of execution
  • Liquidity
  • Settlement
  • Client Objectives
  • Order size / nature
  • Venue
  • Others as relevant

Monitoring

We monitor the effectiveness of the execution arrangements for each instrument traded with each broker or venue through an evaluation of the controls and related exceptions or through sample checks. Such monitoring is to be undertaken on the basis of the risk and impact on the client of the firm not meeting the relevant execution factors.

When considered as a result of the above monitoring, we shall correct any deficiencies noted in execution arrangements.


Annual Review

Annually (or when material change occurs to the ability to obtain the best possible results for clients) we formerly review our execution arrangements considering whether our approved brokers/execution venues are providing the best possible result for our clients.


Disclosure

These arrangements have been summarised in a “Best Execution Disclosure Statement” which is provided at the outset of a Client relationship and provide on an annual basis or when we update this policy.



Best Execution Disclosure Statement


Scope

The best execution policy applies to clients when we execute orders on their behalf in financial instruments covered by the Markets in Financial Instruments Directive (“MiFID”). This will be the case where we execute an order:-

  • By dealing as agent
  • By dealing as a riskless principal on your behalf; or
  • By working an order on your behalf.

This policy applies to the broker services we provide to you referred to in our standard Terms of Business, which should be read in conjunction with this document. The Firm will be executing orders on your behalf where you legitimately rely on us to protect your interests in relation to pricing or other aspects of the transaction that may be affected by the choices we make when executing your order.


The quality of execution

When buying and selling financial instruments on your behalf, we will take all reasonable steps to achieve the best overall result for you or “Best Execution”. This involves considering the nature of your orders, the priorities you place upon us in filling those orders and the market in question.

We will use our knowledge, experience and judgement to execute trades on your behalf taking into consideration a range of different factors that include not just price, but also the costs incurred in the transaction, the need for timely execution, the liquidity of the market, the size of the order and the nature of the financial transaction, including whether it is executed on a regulated market or over-the-counter (‘OTC’).

We will also take into account your understanding and experience of the market in question, dealing profile, the nature of the dealing service you require of us and the specific and general instructions given to us by you which may prioritise how we are to fill your orders.

In the absence of express instructions from you, we will use our knowledge of your circumstances and requirements to determine the factors that we need to take into account for the purpose of providing you with “Best Execution”.

Our commitment to provide you with Best Execution does not mean that we owe you any fiduciary responsibilities over and above the specific regulatory obligations placed upon us or as may be otherwise contracted between us.


Order Execution Policy

We have set out the criteria that determine how we select the different venues through which your order may be executed. We have identified those venues on which we will most regularly seek to execute/direct orders and which we believe offer the best prospects for affording you Best Execution. We will also assess, on a regular basis, the quality of execution afforded by those venues across our client base and whether we need to change our execution arrangements.

  • (a) what we reasonably assess to be your best interests in terms of executing your orders; and
  • (b) such other factors as may be appropriate, including the ability of the venue to manage complex orders, the speed of execution, the creditworthiness of the venue and the quality of any related clearing and settlement facilities.
In selecting the most appropriate venues for the purpose of executing your orders, we will take into full account the factors relevant to the order, including those set out below:

Where we are, in effect, ourselves the execution venue i.e. where we deal directly with you on a principal-to-principal basis, we will review the quality of our own execution as if we were an execution venue, and disclose the criteria used by us to judge the quality of the execution offered by us to you (and of any model used by us for this purpose).

 

Our policy, in providing you with Best Execution, is, so far as possible and subject to the processes set out below, to exercise the same standards and operate the same processes across all the different markets and financial instruments on which your orders are executed. However, the diversity in those markets and instruments and the kind of orders that you may place with us mean that different factors will have to be taken into account when we assess the nature of our execution policy in the context of different instruments and different markets. For example, there is no formalised market or settlement infrastructure for over-the-counter transactions. In some markets, price volatility may mean that the timeliness of execution is a priority, whereas, in other markets that have low liquidity, the fact of execution may itself constitute best execution. In other cases, our choice of venue may be limited (even to the fact that there may only be one platform/market upon which we can execute your orders) because of the nature of your order or of your requirements.


Execution Venues

A list of the execution venues we may use can include Regulated Markets (London Stock Exchange/PLUS), Multilateral Trading Facilities (MTF) and the Retail Service Provider network (RSP). However, we reserve the right to use other unlisted execution venues which we deem appropriate and which accord with our Order Execution Policy.

We will regularly assess the execution venues available and may add or delete venues in accordance with our obligation to provide you with the best possible execution result on a consistent basis. We will notify you of material changes to our Order Execution Policy


Eligible Counterparties

If you are classified as an Eligible Counterparty you will not be entitled to best execution under the UK Financial Conduct Authority “FCA” or equivalent EU rules. This is in accordance with Article 24 of MiFiD which provides that the best execution obligation under Article 21 will not apply.


Market Practices

In the wholesale over the counter (“OTC”) bond markets in which the Firm operates buyers and sellers conventionally “shop around” by approaching several dealers for a quote and in these circumstances there is no expectation between the parties that the broker/dealer chosen will owe best execution. Unless you, as a sophisticated participant in the wholesale markets, advise us to the contrary we will assume that this is your normal behaviour. We will only consider that the best execution obligation is owed where it can be demonstrably shown that you legitimately relied on the Firm to protect your interests in relation to pricing and other elements of the transaction (such as speed or likelihood of execution and settlement) that may be affected by the choices made by when executing the order the Firm acts as an execution only broker and where you provide us with a specific instruction in relation to your entire order, or any particular aspect of your order, we will execute the order in accordance with your instructions. However, please note that in following your instructions, we will be deemed to have taken all reasonable steps to provide the best possible result for you in respect of the order, or aspect of the order, covered by your specific instructions.


Consent

We are required to obtain your prior consent to this Best Execution Policy. You will be deemed to provide such consent when you give us an order to execute a transaction on your behalf.

 

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IMPERIAL CAPITAL (INTERNATIONAL) LLP PRIVACY NOTICE FOR CANDIDATES

 

This fair processing notice applies to all candidates who are applying for work with us and describes how we collect and use personal data about you during and after our recruitment process. It provides you with certain information that must be provided under the UK Data Protection Regulation.

 

1. The Kind of Personal Data We Hold About You

Personal data means any information about an individual from which that person can be identified.  We will collect, store, and use the following categories of personal data about you:

  • personal contact details such as name, title, addresses, telephone numbers and personal e-mail addresses;
  • date of birth, gender and nationality;
  • recruitment information (including copies of right to work documentation, references and other information included in a CV, application form or cover letter, or disclosed as part of the application or interview process);
  • professional memberships, FCA regulated and credit history, and other information necessary to determine your honesty, integrity and reputation; and
  • CCTV footage (if you attend an interview at our offices).

We may also collect, store and use the following “special categories” of more sensitive personal data:

  • information about your health, including any medical condition and sickness records; and
  • information about criminal convictions and offences.

2. How Your Personal Data is Collected

We collect personal data about candidates through the recruitment process from the following sources:

  • you directly;
  • from recruitment agencies and headhunters in relation to the data listed at section 1 (save for CCTV footage);
  • from background screening companies and credit reference agencies to check your suitability to work for us, particularly if you are in a regulated role; and
  • from former employers and your referees to obtain references.

3. How We Use Your Personal Data

We will only use your personal data when the law allows us to. Most commonly, we will use your personal data in the following circumstances:

  • to comply with a legal obligation such as checking you are legally entitled to work in the UK or dealing with legal disputes involving you or our employees;
  • where it is necessary for our legitimate interests to make a decision about your recruitment or appointment and the terms on which you work for us. It is in our legitimate interests to want to recruit individuals to perform work for our benefit; and
  • to decide whether to enter into a contract with you.

If you fail to provide certain information when requested, we may be prevented from complying with our legal obligations or from processing your application.

 

4. How We Use Particularly Sensitive Personal Data

“Special categories” of particularly sensitive personal data require higher levels of protection. Sensitive personal data includes information about a person’s racial or ethnic origin, political opinions, religious beliefs and physical and mental health.  We need to have further justification for collecting, storing and using these categories of data.

We will use information about your physical or mental health, or disability status to consider whether we need to provide appropriate adjustments during the recruitment process, ensure your health and safety in the workplace, assess your fitness to work and provide appropriate workplace adjustments.

 

Information about criminal convictions

We collect information about criminal convictions as part of the recruitment process

either because it is necessary given the nature of your role or where we have obtained your express consent.   

 

5. Sharing Your Personal Data

We will only share your personal data with the following third parties for the purposes of processing your application:

  • the other entities within the Imperial Capital Group;

  • our advisers;

  • recruitment agents and headhunters;

  • background screening companies and credit reference agencies;

  • parties providing products and/or services to us (including, without limitation, pension and benefits administrators); and

  • professional and regulatory authorities (including the FCA and HMRC) and any governmental or quasi-governmental organisations.

We may transfer the personal data we collect about you to Italy and the US.  There are adequacy regulations in respect of Italy.  This means that the country of Italy to which we transfer your data is deemed to provide an adequate level of protection for your personal information. 

We will ensure that your personal data receives an adequate level of protection when it is being transferred to the US so that your personal information is treated by those third parties in a way that is consistent with and respects UK laws on data protection.   Information about the measures put in place are available from Renee Fricks.

 

6. Automated Decision-Making

We do not envisage that any decisions will be taken about you using automated means.

 

7. Retention of Personal Data

We will only retain your personal information for as long as necessary to fulfil the purposes we collected it for, including for the purposes of satisfying any legal, regulatory, accounting, insurance or reporting requirements, to defend or pursue any legal claims and for our legitimate business purposes including in case another vacant role becomes available in the future which may be suitable for you.

To determine the appropriate retention period for personal data, we consider the amount, nature, and sensitivity of the personal data, the potential risk of harm from unauthorised use or disclosure of your personal data, the purposes for which we process your personal data and whether we can achieve those purposes through other means, and the applicable legal requirements.

Sensitive personal data will be deleted when the purpose for which it was collected and processed no longer exists subject to our legal, regulatory, accounting, insurance and reporting requirements.

 

8. Our Approach to Information Security

We take the security of your data seriously. We will ensure that your information is handled and stored in a secure and sensible manner. We will notify you and any applicable regulator of a suspected breach where we are legally required to do so.

 

9. Your Rights

The right to access personal data we hold on you

At any point you can contact us to request the personal data we hold on you as well as why we have that personal data, who has access to the personal data and from where we got the personal data.

 

The right to correct and update the personal data we hold on you

If the data we hold on you is out of date, incomplete or incorrect, you should inform us in order that we can update it as appropriate.  If we decide not to amend your data, we will explain why we are not taking such action.

 

The right to have your personal data erased

If you feel that we should no longer be using your data or that we are illegally using your data, you can request that we erase the data we hold. When we receive your request, we will confirm whether the data has been deleted or the reason why it cannot be deleted.

 

The right to object to processing of your data

You have to right to request that we stop processing your data. When we receive your request, we will confirm if we are able to comply or if we have legitimate grounds to continue to process your data. If data is no longer processed by us, we may continue to hold your data to comply with your other rights.

 

The right to data portability

You have the right to request that we transfer your data to another data controller. Once we receive your request to transfer your data, we will comply where it is feasible.

 

The right to restrict the processing of your personal data

You have the right to request that we suspend the processing of personal information about you, for example if you want us to establish its accuracy or the reason for processing it.

 

10. Queries

If you have any questions about this notice or how we handle your personal data, please contact Renee Fricks on + 1 310.246.3630 or rfricks@imperialcapital.com.

You have the right to make a complaint at any time to the Information Commissioner’s Office (ICO), the UK supervisory authority for data protection issues.

 

Imperial Capital (International) LLP of One Eagle Place, London, SW1Y 6AF.

 

Introduction

 

This Business Continuity Plan (BCP) exists to ensure that the Firm is able to continue with its normal
day to day operations in the event of a breakdown in systems, disablement of building/office and/or
a temporary or permanent loss of power and to ensure the restoration and recovery of all necessary
records. The plan applies to all personnel and departments.

 

The BCP includes contingency arrangements for the recovery from an event affecting business
continuity and also preventative actions to minimise the likelihood of the occurrence of such an event.

 

This BCP will be reviewed, updated and tested periodically.

 

Designated Owner

 

The Firm has appointed Christopher LoCicero, Compliance Officer as the Designated Owner of this
BCP. The Designated Owner has full authority for all decisions, including spending, during a business
continuity event. It is the responsibility of the Designated Owner to ensure test results are presented
to the Principals periodically.

 

Risk Assessment

 

This BCP takes into account risks that the Firm should be prepared for, as identified by the Principals.
The risk assessment is reviewed at least annually after testing, and following any major operational
change.

 

The following events and potential disasters have been considered for the purpose of this exercise.
Whilst not exhaustive, the Firm believes the probability of these occurring or affecting its business is
greatest:

 

  •  inaccessibility to the office and other threats to the physical premises;
  •  power failure;
  •  inability to access IT systems;
  •  failure of telephone landlines;
  •  loss or damage to hard copy files and records; and
  •  loss of key staff.

The above risks may have an impact upon one or more of the following aspects of the business:

  •  critical computer systems;
  •  critical systems data;
  •  critical paper assets;
  •  communications;
  •  premises; and
  •  staff.

Business Continuity Plan

 

Access to the office and other threats to the premises

 

Premises:
                One Eagle Place,
               London,
               SW1Y 6AF

 

The BCP conforms to that of the Building Manager.

 

The contact details of the Building Manager are:
Sara Lee
Tel: (020) 3147 6040 Cell 07854 028 498
Customer Helpdesk: TCElondon@eu.jll.com

 

Events may occur that render the building inaccessible. In such circumstances, all Personnel should
return home and connect remotely to the Firm’s system or relocate to the Firm’s disaster recovery
site as directed. The Designated Owner will contact all Personnel, beginning with the Principals, to
notify them of appropriate action depending on the nature of the circumstances. Emergency contact
details are listed at the end of the BCP.

 

In the event that the premises should require vacating, standard evacuation procedures will be
followed (see below). In case of a bomb or terrorist alert the evacuation procedures may be altered
depending on the nature of the alert as it may be safer to remain inside the building. In these
circumstances, the Designated Owner will coordinate with the Building Manager and Emergency
Services and will direct all Personnel as to the appropriate action.

 

In the event of a serious incident occurring outside of normal working hours the Building Manager will
act as a central contact point and will make contact with the Designated Owner. A decision will be
made in conjunction with the Emergency Services where necessary as to whether to invoke the BCP.

 

Power failure

 

  •  Servers/Routers/Switches are protected by uninterruptible power supply (UPS) or similar battery
    backup or generators.

 

Computer failure or breakdown

 

  • The Firm’s internal backup email solution can be activated within 30 minutes.
  • A disaster recovery backup is taken off the server on a monthly basis to an External Hard drive
    and Daily backup to a COLO Centre in London and to our group backup centre in the US to ensure
    that if it needs to be rebuilt or replaced it could be quickly restored to the appropriate
    configuration.

Failure of telephone landlines

 

  • All Personnel have mobile phones and therefore it is not anticipated that a failure of the
    telephone switch would cause serious issue. All telephone hardware is under warranty with the
    manufacture.
  •  Voice communications recovery strategy can be implemented within 30 Min of invocation. 100%
    of voice lines can be redirected to an appropriate alternative location (e.g. recovery site, call
    centre) within 120 Min of invocation.
  •  At least 100% of business as usual calls throughout (including fax and modem) can be handled at
    the recovery site. There are connections to multiple external telephone exchanges.

Loss or damage to hard copy files and records

 

  •  All critical data is copied or replicated at another site. It takes less than one hour to retrieve off-
    site copies of critical recovery data.

Recovery Site/ Rebuild

 

If the BCP is invoked the Designated Owner has 24 hour access to the Firm’s nominated recovery site
at the following address:

 

Imperial Capital, LLC
277 Park Avenue, Suite 2004
New York, NY 10172

 

The Firm’s IT Support, (all IT Support is provide it by Imperial Capital staff, where the first contact will
be Fadi Jaber), will have access to the recovery site and will begin restoring all IT systems within 24
hours.

 

Alternatively, if the BCP is invoked the Designated Owner has 24 hour access to the Firm’s IT
Support, (all IT Support is provide it by Imperial Capital staff, where the first contact will be Fadi
Jaber), who will begin to restore mirror systems, including back up devices and software to manage
backups from online backup systems when the primary system has failed. IT restoration addresses
the need of remote access for Personnel who are required to stay at home.

 

BCP Awareness & Training

 

  •  This BCP is readily accessible and available to all Personnel. It is posted on the Intranet.
  •  Principals and relevant Personnel are familiar with their intended role during a major disruption
    and their responsibilities for the operation of the BCP.
  •  All critical Principals and Personnel have trained deputies who can fulfil their duties.

 

Pre-Planned Testing

 

All arrangements contained in this BCP are tested periodically, and the results of the testing fully
documented on a quarterly basis and forwarded to ICI Compliance.

  •  Tests involve integrated simulation, which includes IT, office facility and critical staff recovery
    using alternate facilities.
  •  IT recovery tests are required to realistically reflect the worst case scenario where all critical
    systems must be restored concurrently.
  •  Capacity to cope with multiple concurrent usage has been tested.
  •  Critical systems recovery is tested every 3 months.
  •   Testing of identified critical application or hardware and/or software keys.
  •  Operation of market data and other critical third party feeds are tested at the disaster recovery
    site.
  •  Tests to rebuild the client or desktop environment.
  •  Restoration of critical applications: backups on an un-configured system are run.
  •  If critical backups are needed, the restore is tested every month.
  •  UPS are full load tested twice a year.
  •  Unscheduled recall of offsite copies of critical recovery data are requested to test accessibility.
  •  Out of hours telephone contact tests are conducted at least once per year.
  •  Telephony recovery test takes place at least annually.
  •  After any of the above tests, reports are completed with clear actions and owners.

 

Emergency Contact List
NamePositionCompanyEmailTelephone Number
Brian RobertsonHead of ICIImperial Capital (International) LLPbrobertson@imperialcapital.com+44 (0)20 7650 5401
Christopher LoCiceroManaging
Director –
Compliance
Imperial Capital LLCclocicero@imperialcapital.com+1 (347) 733-3281
+1 (212) 351-9416
Fadi JaberCTO or
MIS Imperial
Imperial Capital,
LLC
fjaber@imperialcapital.com
mis@imperialcapital.com
+1(917) 776
1955, +1 (212)
351 9730
Firm Contact
Centre
RegulatorFCAfcc@fca.gov.uk0845 606 9966
Stephen HoltCompliance
Consultant
Regulatory
Compliance
Consultancy
SH1@regcompconsultancy.com+44 (0)20 7112
8541
 Legal CounselWinckworth
Sherwood
 +44 20 7593
5000

Imperial Capital COVID-19 Policies

For information on our COVID-19 Policies and Protocols at each office, please contact hr@imperialcapital.com.