1. Financial intermediary selection and assessment policy
In order to comply with its regulatory obligations, in particular the MiFID regulatory package and the fiduciary duty to provide the best execution for clients under US SEC (Security Exchange Commission) regulations, METROPOLE Gestion is required to take all necessary steps to obtain the best possible result for its clients when transmitting orders for execution as part of its asset management activity. It therefore selects financial intermediaries whose execution policies will ensure the best possible results to that end.
The best execution obligation takes the form of a best selection obligation.
1.1. Scope
The selection policy applies to all financial instruments and to all funds and mandates managed by METROPOLE Gestion, which invariably uses a financial intermediary to place orders.
1.2. Place of execution
METROPOLE Gestion authorises its financial intermediaries to process orders on all markets in order to benefit from the full range of products available and to be in a position to obtain the best possible result for its clients. It expressly consents to orders being executed on:
- regulated markets;
- multilateral trading facilities;
- systematic internalisers;
- organised trading facilities.
1.3. Selection and assessment of financial intermediaries
1.3.1 Selection of financial intermediaries
METROPOLE Gestion has established a Broker committee to oversee the selection of financial intermediaries who are to execute orders, and to verify that those financial intermediaries comply with their best execution obligations. This Broker committee meets every six months. It reviews the performances of the selected financial intermediaries over the course of the previous period in light of the chosen criteria and decides whether to retain them on the selection list.
All financial intermediaries must first be approved by the Broker committee. Orders may not be transmitted to a non-selected financial intermediary. Financial intermediaries are selected solely on the basis of objective criteria defined in the financial intermediary selection and assessment policy.
METROPOLE Gestion expects its financial intermediaries to obtain the best results when executing orders, based on the following criteria:
- Execution price;
- Costs of execution;
- Speed;
- The probability of execution and settlement;
- Size;
- Type;
- Other considerations relevant to the execution of the order.
METROPOLE Gestion checks that these criteria are included in the selected financial intermediaries’ execution policies.
1.3.2. Assessment of financial intermediaries
The following assessment criteria are used to score financial intermediaries:
- Overall price and compliance with instructions;
- Ability to source liquidity;
- Effective settlement of transactions;
- Quality of reports.
The rating scale, as applied to the various criteria, produces an overall score, that is used to classify selected financial intermediaries for the subsequent period. The relative weightings of each criterion, which are set by the Broker committee, depend on the financial instrument.
When transmitting orders for execution, the key factor is the overall price (representing the price of the financial instrument and costs associated with execution).
1.4. Conflicts of interest
METROPOLE Gestion is a management company of the ODDO BHF Group.
As such, it has affiliated entities from the following sectors: Brokerage firms, Insurance, Trust, Banking, and sponsor general partner, managing member of pooled investment vehicle. Please note that METROPOLE Gestion does not perform any security transactions or investment advisory activities with those affiliates.
1.5. Disclosure of the policy
The financial intermediary selection and assessment policy is available on request from the management company.
1.6. Review of the policy
The financial intermediary selection and assessment policy is reviewed at least once every year. Any changes to the policy is formalized and justified.
2. Order Aggregation
METROPOLE Gestion may aggregate client orders for the purchase or sale of securities. Aggregated trades are to be allocated to eligible client accounts in a consistent, fair and equitable manner over time.
METROPOLE Gestion determine which client accounts will participate in an aggregated purchase or sale opportunity and estimate the appropriate share quantity of each participating client account based on the specific weightings of each client account, taking into consideration such factors as investment objectives, anticipated subscriptions (or purchases) and redemptions and other liquidity requirements, the size of an available investment, the supply or demand for a particular security at a given price level, and other client specific guidelines and restrictions.
All client accounts that participate in an aggregated trade receive the average share price for all transactions executed for the aggregated trade order during that trading day and all accounts share in the commissions and other transaction costs relating to such trade order on a regular basis.
Should any aggregate order be only partially completed, such an order will be allocated on a pro rata basis based on each account’s equity value.
3. Trade rotation
METROPOLE Gestion does not rotate orders when executing orders arising from buy and sell decisions taken on behalf of its clients. In some cases, METROPOLE Gestion provides non-discretionary investment services (often in the form of model portfolios or segregated managed accounts – SMAs). Investment decisions or recommendations issued on client portfolios managed on a discretionary basis can have an immediate effect on these model portfolios. Where applicable, the company shall take the necessary measures to ensure that the updated model portfolios are disclosed simultaneously – no later than the day that the management decision is made – so that model portfolio clients can execute their orders under reasonable similar conditions.
It should be noted that when METROPOLE Gestion does not execute orders resulting from a management decision as it does for clients whose portfolios are managed on a discretionary basis, differences beyond our control may remain. These differences may be the result of several factors (list is non-exhaustive):
- Timing differences due to geographical location and the resulting differences in time zones;
- Resources (available funds) conditions specific to the client;
- The type, nature and liquidity of the instruments traded (securities listed on an organized market, ADRs, unlisted securities, etc.);
- The market type and the market conditions at the time the order is dealt (multilateral trading system, organized trading system, over-the-counter).
4. Cross trade
The firm does not engage in cross trades for U.S. client accounts. In the event we decide to engage in cross trades, we will do so in compliance with Section 206 of the Advisers Act of 1940 and in compliance with Rule 17a-7 of the Investment Company Act of 1940.
5. Conflict of interest management policy
In accordance with its principles and the prevailing regulations resulting from the transposition of MiFID, METROPOLE Gestion has defined a policy for identifying, preventing and managing conflicts of interest.
A conflict of interest may arise when an investment services provider carries out activities either on behalf of a client or on a proprietary basis, which come or may come into conflict with the interests of another client or group of clients if these activities are not organized and verified in an appropriate manner.
The purpose of this policy is to:
- establish formal procedures for identifying situations giving rise to or likely to give rise to a conflict of interest involving an appreciable risk of harming clients’ interests,
- define the procedures to be followed and the steps to be taken with a view to managing these conflicts.
These mechanisms are characterized by, inter alia:
- a business line organization devised to avoid giving rise to conflicts of interest and decisions being made by the company contrary to clients’ interests,
- procedures based on the principles of fairness in the processing of the orders placed with financial intermediaries, in particular in terms of the allocation of assets or financial instruments,
- an employee remuneration policy not based on purely commercial objectives.
If the organizational and administrative measures taken by METROPOLE Gestion to manage conflicts of interest do not suffice to guarantee with reasonable certainty that the risk of harming the client’s interests will be avoided, prior to acting in its name, METROPOLE Gestion will inform the client clearly of the general nature and/or the source of the conflict of interest. This information will be provided to the client on a durable medium and will be sufficiently detailed so that the client can make an informed decision.
METROPOLE Gestion will maintain an effective conflict of interest management policy that is appropriate with respect to the size, organization, nature, importance and complexity of its activity.
6. Voting policy
The voting policy sets out the principles applied by METROPOLE Gestion when exercising voting rights at general meetings of companies whose shares are held in the portfolio and for whom METROPOLE Gestion votes proxies.
The voting policy is available to by investors on demand.
Report on exercising voting rights
This report describes the conditions in which METROPOLE Gestion exercised its voting rights in line with its voting policy. The report on exercising voting rights is available to investors.
7. Complaints handling
As required by the applicable regulations in France, METROPOLE Gestion has put in place a procedure for handling any complaints it may receive from clients. Note that: "a complaint is an expression of client dissatisfaction with the service provider. A request for information, an opinion, a clarification or a service does not constitute a complaint".
Complaints should be sent to METROPOLE Gestion, 12 boulevard de la Madeleine, 75009 Paris. Clients will not be charged in connection with the complaint's procedure.
The client will be sent a letter acknowledging receipt of the complaint within ten business days of receipt, unless a response has been given in the meantime. Subject to any duly justified special circumstances, the asset management company will respond to the client within two months of receipt of the complaint.
In the event of a persisting disagreement, clients may refer matters to the AMF mediator: Médiateur de l’Autorité des marchés financiers, 17 Place de la Bourse, 75082 Paris Cedex 02.
The AMF mediation application form and the mediation charter are available on the AMF website: http://www.amf-france.org.
8. Compensation policy
Details of METROPOLE Gestion's staff compensation policy.
METROPOLE Gestion has devised a compensation policy, pursuant to regulations, based on compensation practices consistent with sound and effective management and discouraging inappropriate risk taking in view of the funds' risk profiles (including as regards sustainability), regulations or prospectuses.
The policy applies to all METROPOLE Gestion staff.
METROPOLE Gestion's staff compensation comprises a fixed component, which may be supplemented by a variable component. As the fixed component accounts for a relatively large proportion of total compensation, the variable component is optional.
There is no guaranteed variable compensation or signing bonus.
The compensation policy specifies the rules on variable compensation for the categories of staff identified by the regulations, namely risk-takers, controllers and any employees who, in view of their total compensation, are at the same compensation level as the Executive Management and risk-takers whose professional activities have a significant impact on the risk profile of the company or funds. Furthermore, METROPOLE Gestion takes sustainability into account in all aspects of its business and recognises that each team contributes to the implementation of the company’s overall strategy. The entire investment process includes taking sustainability risks and, for those funds concerned, ESG (Environment, Social and Governance) criteria into account, starting from the preliminary selection of assets making up the funds or mandates.
9. Performance-Based Fees and Side-By-Side Management
METROPOLE Gestion receives asset-based and performance-based fees. However, supervised persons do not receive a performance-based fee as part of their compensation. Client accounts are managed through a collegiate decision-making process (e.g. no portfolios are managed by a single person, which implies the individual compensation is not linked to a fund’s performance).
METROPOLE Gestion has no proprietary accounts that invest in the same strategy as, or trade alongside, client accounts. Pursuant to its allocation policy, METROPOLE Gestion allocates trades between its U.S. clients and other clients and also allocates aggregated orders between portfolios.
10. Personal data
All personal information processed by METROPOLE Gestion is subject, in particular, to the provisions of the French data protection act, Loi n° 78-17 Informatique et Libertés of 6 January 1978 as amended by the Act of 6 August 2004 and by the EU General Data Protection Regulation (GDPR) of 27 April 2016 and all rules of national law issued in the implementation thereof.
To consult our personal data management policy, please click here.
For any questions regarding your personal data and its protection, please contact the team in charge of data privacy at the following address: [email protected].