Conflict of Interest Policy
In accordance with the MiFID II Directive, Article L. 54-10-5 I 4° of the French Monetary and Financial Code and Article 721-9 of the General Regulations of the French Financial Markets Authority (Autorité des marchés financiers), Lord Services (the "Company") has established this Conflicts of Interest Policy (the "Policy"). This Policy is available for consultation by clients and prospects, as well as by other partners of Lord Services.
This document details how Lord Services minimizes and addresses conflicts of interest. It provides details of the various means used to ensure that procedures for identifying, preventing and managing conflicts of interest are effectively implemented.
Purpose and Scope of the Policy
The Policy defines the Company's procedures and clearly identifies circumstances that may give rise to conflicts of interest, where the Company cannot assure, with reasonable confidence, that the risk of harm to the client's interests will be avoided.
The Policy identifies the types of possible conflicts of interest that may arise on the technological interface operated by Lord Services via the https://www.lordtoken.com portal and allowing its users to use the spot trading services (the technology of which is fully white-labeled by Binance Cloud) and the related launchpad services (the technology of which is developed by Lord Services itself). The Policy describes the procedure for such identification and the measures taken by the Company.
The Policy is set out in writing and is appropriate to the size and organization of the Company and the nature, scale and complexity of our business.
The Policy applies to the Company and its directors, officers, employees, affiliates and any other person directly or indirectly controlled by the Company (the "Covered Persons").
As minimum criteria, the Company considers the following situations:
- the Company and/or a Concerned Person has an interest in the outcome of a service provided to the client that is contrary to the client's interest;
- the Company and/or the Relevant Persons have a financial or other incentive to favor the interest of a particular client or group of clients at the expense of its other clients;
- the Company and/or Relevant Persons receive, or will receive, from any person, other than the client, an inducement in connection with a service provided to the client, in the form of money, goods or services, other than the standard commission or fee for that service;
- the Policy identifies the procedures and measures taken by the Company that are designed to ensure that Relevant Persons engaged in various business activities involving a conflict of interest (as specified above) perform those activities at a level of independence appropriate to the Company's size and business.
The procedures in the Policy are intended to:
- prevent and monitor the exchange of information between Covered Persons engaged in activities involving a potential conflict of interest when the exchange of such information may adversely affect the interests of one or more clients;
- separate the supervision of Relevant Persons whose primary duties involve performing activities on behalf of, or providing services to, clients whose interests may conflict, or who otherwise represent different interests that may conflict, including those of the Company;
- eliminate any direct link between the compensation of Covered Persons engaged primarily in one activity and the compensation or income generated by other Covered Persons engaged primarily in another activity, where a conflict of interest may arise in connection with these different activities;
- take steps to prevent or limit the ability of any person to exercise improper influence over the manner in which a Covered Person performs services.
Identification of potential sources of conflict of interest
Considering the services offered by the Company, potential sources of conflict of interest may arise in the following cases:
- the Company may provide services to clients who may have interests in digital assets that conflict or compete with the interests of other clients of the Company;
- maximizing the volumes traded on Binance via the Lord Token platform in order to increase the revenues of Lord Services may directly conflict with the interest of Lord Services' customers, if that interest is to minimize the volume of transactions they make;
- commissions, remuneration, gifts, etc. granted or paid to the Company's employees by the Company, based on their performance, may negatively affect the Client and encourage more or less aggressive marketing tactics;
- remuneration and/or incentives granted or paid to third parties (affiliates or business introducers) on the basis of recommendations, referrals and/or integration of new clients, which may negatively affect the Client and encourage aggressive marketing tactics;
- remuneration and/or incentives granted or paid to third parties who provide services under an outsourcing arrangement, if such remuneration induces practices contrary to the interests of the Company's clients.
It should be noted that the above scenarios do not necessarily give rise to a "conflict of interest" or any material harm to the client, but are disclosed in the interest of full transparency. The above scenarios should be considered in relation to the procedures and measures implemented by the Company to manage or limit their impact.
Conflict of interest management
The Company has organizational and administrative procedures to manage and prevent any conflict of interest that may arise and could constitute or result in a risk of harm to its clients.
This section of the Policy will describe the actions taken by the Company in general, as well as those taken in relation to the above list of identified potential conflicts of interest:
1. General measures
- The Company has procedures in place for the employment of persons who are considered knowledgeable and competent, and for the training of such employees;
- The Company will implement procedures to monitor third parties/outsourced service providers to ensure that they are competent to perform the services assigned to them;
- The Company will implement procedures governing access to electronic data so that individuals in one department will not have direct access (i.e., without authorization) to information about matters handled by other departments, except as necessary to perform their duties;
- The Company will implement a separation of departments/functions providing services to clients whose interests may conflict with those of other clients or with the Company's interests;
- The Company will ensure that no single employee has responsibilities with conflicting interests;
- The Company respects the confidentiality of information it receives from and about its clients and applies a "need to know" approach. Access to confidential information is limited to those whose job requires them to have access to it, in a proportionate and limited manner;
- The Company may establish "Chinese walls" to physically separate key departments of the Company in order to restrict the flow of confidential information within the Company;
- the Company may establish an internal compliance function whose responsibilities include monitoring and reporting on KYC-LCBFT procedures and the Policy, as well as identifying potential conflicts of interest and making recommendations for their management/limitation. The compliance function is also responsible for legal monitoring to ensure that the Company complies with applicable legislation;
- The Company will apply the "4 eyes" principle in the supervision of its activities, which consists of assigning the different stages of verification to different people;
- The Company will implement procedures to monitor transactions from personal accounts that may be held by Company employees on the LordToken platform. Thus, any account held by an employee of the Company on LordToken must be identified as such immediately to the Company's compliance function. Transactions from these accounts will be subject to heightened scrutiny to identify any potential violations of the Company's policies.
2. Measures relating to the Company's digital asset investment services
The Company does not grant any preferential treatment to its customers or group of customers and guarantees a fair treatment to all its customers and their transactions. However, advantages may be granted to certain customer groups only on the basis of transparent and objective criteria (e.g. regular customers of the LordToken platform) ;
3. Measures relating to incentives, commissions, remuneration, gifts, etc.
Employee compensation policy. In accordance with current legislation, the Company does not base its employees' variable compensation on factors that could create a conflict of interest with the clients with whom they are in contact. For employees paid a variable portion, this is therefore based on objective performance indicators within their departments.
Affiliate Compensation. The Company will compensate its referrers based on the transactions made by the referred customers (% commission). As such, compensation may give rise to conflicts of interest that may adversely affect the client and may cause affiliates to adopt aggressive marketing tactics.
The affiliate commission will be calculated to avoid potential conflicts of interest:
- Affiliates do not have access to the personal information of the Company's customers and are prohibited from contacting the Company's customers when they open an account on the LordToken platform;
- If aggressive marketing techniques are identified, the relationship with the affiliate will be terminated;
- The Company does not permit its employees to accept gifts or monetary benefits of any kind that could cause conflicts of interest. Gifts of small value (i.e., less than 30 euros) may be accepted, provided that the Company is informed and approves such gifts.
Lord Services is working on measures to be taken with respect to its outsourced service providers/subcontractors:
- Establishment of non-disclosure and confidentiality agreements regarding customers' personal information;
- Limiting the information provided to service providers to what is necessary for the performance of their tasks so as not to harm the interests of the clients;
- Establishment of procedures for monitoring services provided by related parties and service providers.
4. Information for LordToken users on the status of Financial Investment Advisor (Conseiller en Investissement Financier - CIF) of Mr. François Denis, Managing Director Assistant of Lord Services
It is also brought to the attention of LordToken users that Mr. François Denis, Managing director assistant, also carries out a CIF activity via his company FD Conseil (orias n°: 22001382).
François Denis devotes 30 hours per week, at a rate of 250 days per year, to the LordToken project, the rest of his professional activity being mainly devoted to (i) his personal investments as well as (ii) his activity as a CIF and trainer via his company FD Conseil.
A potential conflict of interest is therefore likely to arise due to these different activities in the event that Mr. Denis, acting in his capacity as trainer and CIF of FD Conseil, were to advise his clients to use the services of LordToken to invest in crypto-assets.
To mitigate this risk, Mr. Denis will remain vigilant, in his communications, to clearly differentiate his two "hats", namely that of CIF via FD Conseil and that of Managing Director Assistant of Lord Services.
Conflict of Interest Disclosure
When the Company becomes aware of a conflict of interest that may arise and when the organizational and administrative arrangements established by the Company to prevent or manage such conflict are not sufficient to ensure, with reasonable confidence, that the risk of harm to the client's interests will be avoided, the Company will disclose such risk to its clients.
Where disclosure of such a conflict is not sufficient to manage the conflict, the Company may elect, in its sole discretion, not to proceed with the transaction or business relationship giving rise to the conflict.
The Company reserves the right to amend this Policy whenever it deems appropriate.