Regulatory information

Policy of management of the conflicts of interests

This document has been prepared in accordance with the french and luxemburgish applicable regulation in france and in luxembourg and aims to inform clients, unit bearer or shareholders of ucits managed by dnca finance (management company in france) and dnca finance luxembourg (management company in luxembourg), both hereafter the ”pmc” (the portfolio management company), on arrangements in place to prevent and identify conflicts of interest that could arise in its activities, that is:

  • Management under mandate (exclusively dnca finance) ;
  • Ucits management ;
  • Financial investment advice ;

List of situations of conflicts of interest that may be found
List of situations of conflicts of interest that may be found

This document has been prepared in accordance with the french and luxemburgish applicable regulation in france and in luxembourg and aims to inform clients, unit bearer or shareholders of ucits managed by dnca finance (management company in france) and dnca finance luxembourg (management company in luxembourg), both hereafter the ”pmc” (the portfolio management company), on arrangements in place to prevent and identify conflicts of interest that could arise in its activities, that is:

  • Management under mandate (exclusively dnca finance) ;
  • Ucits management ;
  • Financial investment advice ;

Conflict of interest prevention and detection system
Conflict of interest prevention and detection system

The PMC has listed all potential cases of conflict of interest that may be found, taking into account of its size, its organisation, its type, its importance and complexity of its activity.

Possible conflicts of interest concerning directly the financial management activity:

The late affectation of a response to an order to a client or group of clients enabling some of these to be favoured or disfavoured.

If group entities are selected, they must be chosen using the best selection procedure of the management company and in the interest of the holders/principals. The fees applied must be in line with market rates.

  • Systematic unjustified benefits granted to certain principals or UCITS vehicles in relation to the adoption of responses to orders placed on markets.
  • A stock market error resulting in the allocation of a surplus from financial instruments bought from or sold to clients instead of the error account of the company.
  • In the event of an issue, private placement, stock market flotation and so on resulting in a situation of scarcity, unequal treatment of principals and UCITS vehicles that is unjustified by an internal procedure conforming with professional good practice. Risk of seeing certain clients that are economically important for the management company or to which this is related benefit from undue advantages in relation to other clients.
  • In the event of an issue, private placement, stock market flotation and so on resulting in a situation of scarcity, the priority allocation of financial instruments concerned to staff or managers of the management company at the expense of clients.
  • Sale-purchase position switching between UCITS and UCITS and mandates: authorised but must be managed (transactions in same conditions as the market and in the sole interest of holders and/or principals).

Possible conflicts of interest regarding proprietary transactions

  • Proprietary transactions of the management company competing with those performed for clients, prejudicing these due to price changes caused by these transactions, to not respecting the priority of the holder's interest and to the use of inside information for personal purposes (insider trading).
  • Proprietary transactions performed by the management company staff competing with those performed for clients, prejudicing these due to price changes caused by these transactions, to not respecting the priority of the holder's interest and to the use of inside information for personal purposes (insider trading).

Possible management independence conflicts of interest

  • Segregation of tasks and functions within the management company to ensure the independence of management from sales, control functions and so on and to guarantee the confidentiality of transactions.
  • Management should not be influenced by the investment in UCITS vehicles and securities of the management company or group, the securities must be chosen using the same selection conditions as the other securities in the portfolio.
  • When the group is unable to place all its securities on the primary market, a procedure must be introduced to ensure that the securities are by default placed with the group UCITS.
  • Soft commissions / benefits in kind: limits and monitoring for employees and the management company.
  • Independence in implementing the voting policy, even when concerning group securities.
  • Subscription by the portfolio manager to units or shares in the UCITS vehicles he or she manages: authorised but must be managed. Specific monitoring if the manager has a significant proportion of the portfolio assets, in order to ensure management independence, compliance with management objectives and equal treatment of holders.

Possible conflicts of interest regarding management company remuneration

  • Incentives for managers to implement a large turnover rate in the portfolios that is unjustified by economic and financial considerations and is solely in the aim of transaction fees ;
  • Rash risk-taking in investments or divestments solely in the aim of seeking a significant increase in the variable management fees ;
  • An approach consisting of systematically using or abusing UCITS vehicles in the management of mandates that are subject to a management fee retrocession agreement with the management companies concerned ;
  • An approach consisting of systematically using or abusing UCITS vehicles in the management of mandates of which the subscription fees subject to retrocession to the management company significantly exceed the market average. ;
  • Independence from distributors: the management company may be required to apply large subscription/redemption fees and/or management fee rates aiming to remunerate the distributor but that are not in the interests of the end customer ;

Possible conflicts of interest regarding the independence of the management company from principal shareholder Natixis Investment Managers :

  • Organisational independence :

Procedures introduced to safeguard the independence of the management company from the group regarding the choice :

  • of service providers
  • of the distributor / distribution network
  • of the broker(s)
  • of the custodian and/or registrar
  • of the valuation agent
  • of the financial management assignees
  • Competition between management companies within the same group must be possible: without constraints on products marketed, fees and so on.

Possible conflicts of interest concerning the independence of the management company from third parties.

  • Prohibition on providing remunerated management services to companies of which the securities are held in portfolio or of which the acquisition is planned, unless this activity is performed on behalf of the management company.
  • Attempts for family or favourable relationships of sensitive staff with the list of intermediaries and service providers.
  • Remuneration method for staff and in particular managers, taking account of income generated by the operations performed on behalf of clients, an incentive that may give rise to behaviour prejudicing the clients, for example undue turnover in the portfolios.
  • Association under the same hierarchical structure of persons performing different tasks, in particular in market or advisory activities for issuers (structurers and managers, traders and managers and so on), a situation liable to give rise to conflicts of interest and decision-making of the management portfolio company that is contrary to the interests of its clients.
  • Unmonitored information exchanges between people performing activities carrying the risk of a conflict of interest.
  • Controls on having and circulating inside information for persons with responsibilities at various group entities.
  • Independence of managers and portfolio managers regarding the portfolio investments (monitoring of list of mandates they could have at the portfolio management companies).
  • Investment in unlisted financial instruments, including :

    holding a significant share in the equity of the issuer concerned.

    • a distributor of the UCITS vehicles of the portfolio management company
    • a client
    • the portfolio management company on its own behalf
    • a manager or employee of the portfolio management company
    • a company related to the portfolio management company
  • As part of an agreement with a registrar, a policy aiming to keep excessive unremunerated amounts of cash in the mandates and UCITS vehicles, excluding equity saving plans.

Given the above list of conflicts of interest, the PMC, partly with its functional organisation via a genuine segregation of tasks and partly with the introduction of internal procedures in all its areas of activity, has already established a system able to limit risks of conflicts of interest significantly.

However, failures of the prevention system could result in one of the above situations arising. The PMC must be able to manage it in the clients' best interests.

Conflict of interest management
Conflict of interest management

In the event of detecting a proven situation of a conflict of interest, the PMC may :

  • Reject the operation causing the conflict ;
  • Accept the operation and the situation of conflict of interest and implement the measures to manage the conflict in the best interest of the clients ;
  • Inform the client in the event of a conflict that can not be processed in the two preceding provisions.

Conflicts of interest shall be managed under the control of Conformity Supervisor, who shall enter all situations having generated a conflict of interest in a register.

Intermediation costs
Report on intermediation expenses for the year 2011

Pursuant to article 314-82 of the AMF general regulations
Conditions under which the portfolio management company has made use, for the previous financial year, of services for investment decision-making assistance and order execution :

In 2011 the collective-management and management by mandate services made use of financial intermediaries who provided execution and investment decision-making assistance services, under the conditions defined in the 'financial intermediaries selection policy'.

Distribution key established between :
  • The intermediation expenses relating to the receipt and transmission service and to the order-execution service ;
  • The intermediation expenses relating to services for investment decision-making assistance and order execution.

At the end of fiscal 2011, the breakdown between the execution service and the investment decision-making assistance service is estimated at 40/60 for equity intermediation, and at 58/42 for intermediation on fixed-income products. This analysis concerned 20 equity brokers and 20 fixed-income product brokers. This breakdown is a summary of the evaluation sheets completed for each financial intermediary by the managers, management assistants and the head of the middle office.

It should be pointed out that the above results are those of the intermediation which DNCA FINANCE uses in connection with its collective management business. Regarding the management-by-mandate investment service, DNCA FINANCE uses mainly the order receipt and transmission service offered by the account-keeper that is the custodian of the managed accounts.

Percentage found for the previous financial year, compared with all the intermediation expenses and the fees referred to in b of 1° of Article 314-79 paid to third parties within the framework of shared commission agreements mentioned in Article 314-81.

Two shared commission agreements were signed in November 2008 and in September 2011. At the end of December 2010, an insignificant amount was available to be retroceded to a third party.

Measures implemented to prevent or deal with potential conflicts of interest in the choice of service providers.

The activity involving financial intermediaries, regardless of the service provided, is subject to periodic review by a financial intermediaries selection and monitoring committee.

NB : This document is available on the website of the portfolio management company.

ESG Policy
Policy for taking into consideration criteria concerning compliance with environmental, social and governance objectives
In application of article D533-16-1 of the French monetary and financial code (CMF)

As a reminder, DNCA FINANCE is obliged to act solely in the interests of investors. In this respect, DNCA FINANCE takes into consideration all environmental, social and governance criteria that meet the objectives set (strategy, objective, portfolio composition) while growing its clients' assets.

As such, the various investment policies applied to the funds currently managed by DNCA FINANCE (either directly or by delegating management) do not simultaneously and automatically take into account the three ESG (environmental, social and governance) criteria forming part of a Socially Responsible Investment (SRI) approach.

Given investors' growing interest in Socially Responsible Investment, DNCA Finance outsources the analysis of its two largest funds (representing almost 50% of total AUM) to an external service provider specialised in this area each year. All stocks held in these funds' portfolios are rated based on these three criteria and an overall SRI score is attributed to investments. Until now, this score has been communicated directly to investors who expressed an interest in this assessment of the ESG quality of the funds' management.

At least one European country in which our funds are distributed has adopted a national law prohibiting the financial sector, and hence portfolio management companies, from doing business with companies involved in the manufacture of anti-personnel mines and cluster bombs. In our view, this ethical provision respects ESG criteria. The portfolio managers of the funds concerned systematically obtain and analyse the annual reports of companies that may be involved in any activities that do not respect these provisions. DNCAs policy is to not invest into any shares or bonds issued by these companies.

Complaint handling - February 17th, 2016

In respect of all management and investment services carried out by DNCA FINANCE and its subsidiaries, namely:
  • Collective investment management
  • Investment management on behalf of third parties
  • Financial investment advice
  • Assistance with the execution of investments
  • Arbitration
  • It being specified that 'a complaint means a statement of dissatisfaction by a client towards the professional. A request for information, opinion, clarification, service or provision is not a complaint. ' (AMF Instruction no. 2012-07 of 13 July 2012)

Obligation to inform clients of the existence of a complaint handling system:

Clients (professionals and non-professionals) are informed that any complaints may be sent to their normal contact person (within the company or within a company representative), or sent in writing directly to the Compliance Officer (RCCI) of the company at its registered office (19 Place Vendôme, 75001 Paris – telephone: 01 58 62 55 00).

When a complaint is received at the company's registered office, the portfolio management company has ten days to acknowledge receipt and two months to respond.

Clients are informed that, other than the standard legal channels, they may call upon the AMF Ombudsman's Office (Ombudsman of the AMF, Autorité des marchés financiers, 17 place de la Bourse, 75082 PARIS CEDEX 02, telephone: 01 53 45 60 00).

Complaint handling system:

Within the group comprising DNCA FINANCE, its subsidiaries and branches, all complaints must be brought to the attention of the Compliance Officer of the parent company, regardless of how they were made or where they originate from. Complaints forwarded to the Compliance Officer must be documented. Representatives must also forward any complaints they receive to DNCA FINANCE when such complaints clearly concern it.

The Compliance Officer keeps a record of all complaints. This record may be consulted by directors, auditors and public authorities.

The Compliance Officer may recommend a suitable response to the company's management and ways to improve the procedure giving rise to the complaint, where appropriate. Clients are informed about this procedure via the company's website.

Remuneration policy

1. Recitals

The remuneration policy implemented by DNCA Finance and its subsidiaries takes into account the provisions of the UCITS V Directive and the AIFM Directive, as well as the common provisions governing remuneration policy management drawn up by the main representative professional associations.

It applies to all DNCA Finance group entities, without prejudice to local provisions.

Defined by the DNCA Finance Executive Committee, the remuneration policy was examined by the DNCA Finance Supervisory Board on 15 December 2016. It shall be reviewed on an annual basis and submitted to the DNCA Finance Head of Compliance and Internal Control for a compliance opinion.

It is intended to promote sound and effective risk management, and prevent members of the Supervisory Board, senior managers and any other staff member of DNCA Finance and its subsidiaries from taking excessive risks.

It is also defined so as to avoid conflicts of interest and prevent irresponsible risk-taking that is incompatible with clients’ interests.

The remuneration policy is based on an assessment of competencies and annual and multi-year, quantitative and qualitative performance criteria. One of its fundamental principles is that the interests of investors, employees and DNCA Finance should be aligned.

2. Scope of identified staff

The remuneration policy is applicable to all staff.


Specific provisions are provided for identified staff who are:

-  members of the company’s executive management;

-  “risk-takers” and;

-  persons exercising a control function;

- and any employee, who in terms of his/her total remuneration, is in the same bracket as the executive management and “risk-takers”, and whose professional activities have a significant impact on the risk profile of the management company or the profiles of the AIFs or UCITS that they manage.

3. Types of remuneration

The staff remuneration structure of DNCA Finance and its subsidiaries is identical for everyone, and breaks down as follows:

-the fixed salary

-the variable individual remuneration

-the variable collective remuneration with the profit-sharing scheme


Every year, DNCA Finance compares all components of employee remuneration with the market in order to ensure they are competitive and have a balanced structure.

In particular, it ensures that the fixed component represents a sufficiently high portion of overall remuneration.

Variable individual remuneration depends on the position and the level of responsibility held. It is attributed on a discretionary basis in relation to the assessment of individual performance as set out below. It may include a not significant portion of benefits in kind relating to the allocation of a vehicle.

4. Payment terms for the variable portion
  • The variable individual remuneration is allocated depending on the contribution to performance assessed by the DNCA Finance management based on the following principles:

- The total variable remuneration package is determined as a percentage of EBITDA, thereby enabling the amounts distributed to be calibrated depending on the results generated by DNCA Finance and its subsidiaries. 
The total amount of this package is presented to Natixis Investment Managers at a formal meeting. The package is then approved by the Natixis Remuneration Committee. 
- The packages of the various departments are determined using a Bottom/Up process, with the objective at each stage of the process of determining the contribution to collective performance. 
- Individual awards are discretionary, based on a performance assessment by the management. 
The performance assessment is based on quantitative and qualitative criteria relating to the main types of business line of the identified staff. Depending on the function, it incorporates a time scale and takes into account compliance with risk limits and the interests of clients.
In order to avoid any conflict of interest or compromising their objectivity, the assessment by the heads of Compliance and Internal Control and the heads of Risk Control is conducted on the basis of objectives and results relating to these specific functions, and regardless of those of the business lines whose operations they approve and control.

  • For identified staff

Beyond a variable remuneration threshold, which may be reviewed annually, the variable individual remuneration awarded to identified staff shall be paid in the following manner:

- At least 50% of this variable remuneration shall be deferred: it is announced, but paid at a later date.

It shall be spread over the three following financial years following that in which it is awarded. This deferred component shall be in the form of units or shares in UCITS (“basket fund”).

The vesting period of the deferred portion of the variable remuneration is subject to a supplementary retention period of six months.

If the financial situation of DNCA Finance deteriorates with a negative EBITDA recorded during one of the three payment years mentioned above, the portion could be reduced or not paid. If such a decision were taken, it would affect equally all identified staff, that had, over the year considered, been awarded deferred variable remuneration.
Such a decision would be made by the DNCA Finance management and would have to be validated by Natixis Investment Managers, then by the Natixis Remuneration Committee.

Finally, in the case of gross misconduct or failure of one of the staff concerned observed during one of the three payment years mentioned above, DNCA Finance could reduce or cancel payment of the deferred portion still to pay to this person.

- The non-differed portion of the variable remuneration shall be paid in cash at the beginning of year N+1, usually at the end of January. 

The “basket fund” is defined so as to align the interest of employees as much as possible with that of investors, without however leading to a concentration of the funds in question.

This basket may be changed depending on changes to the range of products of DNCA Finance and its management expertise. The composition and weighting of the basket shall be subject to an annual review in order to ensure it remains representative.


  • For identified staff below the applicable variable remuneration threshold and for all employees who do not qualify as identified staff, the variable individual remuneration shall be paid in full in cash. This payment shall be made at the beginning of year N+1, generally at the end of January.


5. Prohibition on the use of hedging strategies and guaranteed variable remuneration

The recipients of deferred variable remuneration are prohibited from making use of individual hedging or insurance strategies both during the vesting period or the lock-up period.

Likewise, DNCA Finance shall not pay the variable portion of the remuneration to identified staff through instruments or methods that would make it easier to circumvent the AIFM and UCITS V directives.

Guaranteed variable remuneration is prohibited, except for new hires. In this case, the guarantee is strictly limited to one year.





The purpose of this document is to inform our clients of the selection policy of financial intermediaries to whom the execution of orders is entrusted concerning the management of mandates and the collective management.

It is prepared in accordance with:

  • in France : - article L 533-18 of the Monetary and Financial Code (Code monétaire et financier);
  • article 31475-1 of the AMF General Regulations (Règlement général de l’AMF);
  • in Europe : -  articles 27 and 28 of Delegated regulation N°231/2013 of the Commission supplementing Directive 2011/61 / EU ("Level 2 Regulation") (AIFM);
  • article 25 of the Directive 2010/43/UE and Directive 2014/91/EU of the European Parliament and of the Council of 23 July 2014 amending Directive 2009/65/EC on the coordination of laws, regulations and administrative provisions relating to undertakings for collective investment in transferable securities (UCITS);
  • articles 24 and 27 of the Directive 2014/65/EU of the European Parliament and of the Council of 15 May 2014 on markets in financial instruments (MIFID II) as far as investment services are provided.


DNCA Finance undertakes regular controls (at least annually and on the occasion of any significant change in organization or structure) on the efficiency of its selection policy, with a view to fix, where appropriate, any deficiencies that have been detected.


The first level control teams and the Compliance team conduct periodic controls on execution of orders by DNCA Finance to verify the adequacy of the service rendered under the present policy.

Evidence of the proper application of the selection and enforcement policy is maintained in accordance with regulatory needs.



• Clients concerned

The selection policy in effect in our company applies in the same way to all our clients, whether they are professionals or not. The implementation of the principles of this policy differs according to whether it is collective management or private wealth management.  

• Financial instruments concerned

The selection policy in effect at our company applies to all financial instruments traded by us. DNCA Finance systematically entrusts its orders, regardless of the financial instrument, to an intermediary or counterparty.


Methods of selection and evaluation of intermediaries

Our selection policy for market intermediaries takes into account:

The criteria of price, cost, speed (order transmission and not execution), probability of execution and settlement (including the cost and safety of delivery), the size, the nature of the order or any other consideration relating to the execution of the order (trading venues, impact on the market, ...) .DNCA Finance has taken care of to be categorized as a professional client to all its intermediaries so that they are obliged to provide it the "Best Execution" that it must itself guarantee to its clients.

Are taken into account France research (coverage and accessibility of databases), Europe research (coverage and accessibility of databases), the quality of analyzes (relevance, originality compared to consensus, rigor in the analysis and the financial evaluation, follow-up of recommendations), contact with companies (organization of financial presentations, face-to-face meetings with managers), availability of the research office (on-site presentations, frequency of contact with the analyst).

An evaluation of the financial intermediaries is made at the end of each semester, with a score ranging from 0 (the worst) to 5 (the best) for each of the criteria above.

• "Best Execution" for our clients

• Analysis and research


Trading venues

DNCA Finance has authorized all its intermediaries to direct the orders it initiates to regulated reference markets, multilateral trading facilities (MTF Multilateral Trading Facilities) and systematic internalisers in order to benefit from the best execution conditions offered.

Special case of the selection of interest rate instruments: Since March 2009, DNCA FINANCE has been using the services offered by FIN'AMS, a BNP Group company, to outsource placing orders (ie their negotiation) on all interest rate instruments whenever it deems relevant.

Special case of the investment service for private wealth management : for orders relating to equities and bonds, DNCA Finance has selected the CIC, as intermediation table, authorized for the reception / transmission of orders (approved as credit establishment - investment service provider by the ACPR (Autorité de Contrôle Prudentiel et de Résolution)).


Special cases

The merger of trading orders is possible if it is reasonably expected that the aggregation of orders will not be detrimental to any of the investment funds concerned and will be allocated evenly taking into account the volume of orders and the execution prices, based on pre-defined criteria he follows.

In the event of severe market disruption and/or any deficiency concerning an internal or an external system, the principles of this policy may not be respected in full, but then again DNCA Finance will do everything within its reach to meet its Clients’ expectations.