Sustainable Finance Disclosure Regulation (SFRD)

The Sustainable Finance Disclosure Regulation (”SFDR” or “the Regulation”) applies aims to promote sustainability in the finance sector in Europe and it requires financial market participants such as Black Swan Capital to provide information to investors with regards to the integration of sustainability risks, the consideration of adverse sustainability impacts, the promotion of environmental or social characteristics, and sustainable investment.

Black Swan Capital makes the following disclosures in accordance with the Regulation:

The SFFDR requires Black Swan Capital to be able to present underlying methods and calculations for integrating sustainability aspects in the provided investment services.

The Board of Management of Black Swan Capital is of the opinion that at this moment the company includes ESG (environmental, social, governance) investment solutions in its approved product list, but not exclusively. This means we do not exclusively consider include sustainability aspects while providing investment services.

A client’s attitude to, and preference for, ESG in investing is captured in the client KYC process and considered in compiling client recommendations. Clients are classified as one of five rankings.

The ratings:

1. To exclude ESG (environmental, social and governance) targeted investments from your portfolio. This is considered to be a 1 on a sustainability preference scale of 1-5.

2. To only include ESG (environmental, social and governance) targeted investments in your portfolio if there are no other non-ESG targeted investment options available. This is considered to be a 2 on a sustainability preference scale of 1-5.

3. Neutral, in that you are indifferent as to whether ESG (environmental, social and governance) targeted investments are included as a component of your portfolio. This is considered to be a 3 on a sustainability preference scale of 1-5.

4. to include ESG (environmental, social and governance) targeted investments as a component of your portfolio if available. This is considered to be a 4 on a sustainability preference scale of 1-5.

5. to only include ESG (environmental, social and governance) targeted investments as components of your portfolio. This is considered to be a 5 on a sustainability preference scale of 1-5.

Governance

The board of Black Swan Capital comprises James Hughes, Chairman, David Bellingham, Chief Executive Officer, and Edward Mainwaring-Burton, Managing Director. All are directors of Black Swan Capital.

The Black Swan Capital management report to the board of directors. Black Swan Capital is privately owned, The majority shareholder is Buchanan Capital Limited with management also holding equity in the company. The appointment of directors and chairman of Black Swan Capital is made via general meeting of shareholders.

The Board is responsible for the management of the Company, including the appointment of a Chief Executive Officer to assume the daily management of the Company. The board members shall discharge their duties in a loyal manner, attending to the interests of the Company, and ensure that its activities are organised in a prudent manner. The Board shall adopt plans, budgets and guidelines applicable to the activities of the Company. The Board shall keep itself informed of the financial position of the Company and has a duty to ensure that its corporate accounts and asset management are subject to satisfactory controls.

The Board initiates such investigations as it deems necessary to discharge its duties. The Board shall initiate such investigations if requested to do so by one or more board member.

The Board shall, inter alia, deliberate and decide on the following:

a) Such matters as required by statutory law, the Articles of Association, the Regulations under which BSC operates, these Rules in this document, or the resolutions of the General Meeting;

b) Matters outside the scope of the statutory responsibilities of the Chief Executive Officer;

c) Matters outside the scope of the general authority granted to the Chief Executive Officer;

d) The prudent organisation of the activities of the Company;

e) Satisfactory control of the ongoing activities of the Company;

f) Strategy and objectives;

g) Budget and financing plans for the Company and the Group;

h) Appointment/dismissal of the Chief Executive Officer, adoption of instructions for the Chief Executive Officer and determining of the remuneration policy for key employees;

i) Major changes in the business activities of the Company and organisational changes of substantial importance;

j) Safeguarding the financial statues and appropriate equity, including the Financial Policy of the Group;

k) Legal disputes of major importance;

l) Annual accounts and annual reports of the Company and the Group;

m) Acquisitions, investments and divestments;

n) Proposal for the allocation of profits or losses in accordance with the provisions of the Accounting Act;

o) Agreements between the Company and a member of the Board or the Chief Executive Officer or any agreement between the Company and a third party in which a member of the Board or the Chief Executive Officer has a distinct interest; and

p) Other matters that the Board consider of importance to decide upon.

Complaint Procedure

1. Introduction

Complaints received from clients are to be reviewed constructively and are received without prejudice.

A client can make a complaint by addressing BSC Complaints Manager [ Managing Director] by phone or email.

Email Contact Details for Complaints: [compliance@blackswancapital.eu].

2. Processing of the complaint

All customer complaints must be dealt with in a timely, efficient and professional manner. BSC will address and acknowledge the complaint within 2 working days.

Employees must escalate all customer complaints in which they are involved, or which they receive, to the Compliance Officer and Managing Director.

All complaints are registered and transferred to the Board of Directors. All complaints are to be resolved within ten business days unless further investigation is needed. The plaintiff will be informed accordingly.

The complaints manager keeps the client/plaintiff informed during the whole investigation until the case is resolved.

3. Definitions

A complaint is any expression of dissatisfaction from a client, potential client or former client, or other counterparty whether oral or written and whether or not justified with regard to the provision of (investment) services by BSC.

A significant complaint is one which contains allegations that BSC, or a representative thereof, may have acted illegally, improperly or negligently or where the complainant alleges they have suffered or may suffer a material financial loss, material distress or material inconvenience, or involves a repetition or recurrence of a matter previously complained of whether significant or otherwise.

A complaint is considered resolved when the client retracts their complaint; or the client accepts the response of BSC and no further action is required; or the complaint is settled via the determination of an external ombudsman or similar body, or mediation including finding against the client, and in the case of awarding compensation to the client, when this is settled.

4. Initial Action

If an adverse comment made orally can be immediately resolved by an explanation (within 24-hours), which the other party finds satisfactory, no further action is required and this is not to be regarded as a complaint.

In all other cases, including all cases where the complaint, however minor, is made in writing, the recipient of the complaint must comply with the following procedures.

5. Telephone Complaints

The recipient of a telephone complaint must make a file note of the conversation including the date and time of the call, the name and address of the caller, the service or product details if relevant, the nature of the complaint, any other relevant details and any response given including agreed next steps.

The recipient of the complaint call should inform the caller that their complaint will be forwarded to the Complaints Manager and the Compliance Officer and that it will be investigated promptly, but they are not, without proper authority, to admit any liability.

6. Written Complaints

Written complaints (and a file note of the telephone complaint) should be advised immediately upon receipt to the Complaints Manager, and the Compliance Officer for recording in the Complaints Register.

Depending upon the nature of the complaint, the Compliance Officer will immediately notify the CEO and Board of Directors.

All complaints must be promptly and thoroughly investigated by either the Complaints Manager or a Director that is independent of the complaint, or by the Compliance Officer.

The investigating manager is responsible for replying to the complaint in writing informing the complainant of the process to be followed and the expected timelines.

7. Significant Complaints

The CEO will be responsible for approving the firm’s response and will agree who will make the final sign-off.

The responsibility for any notification to Regulators, if a complaint qualifies as an incident (an act or absence of an action that might or is a severe threat to the integrity of BSC regardless of the persons involved), rests with the Board of Directors. The Compliance Officer will advise.

All internal processes continue as for all complaints.

8. Responses to Complaints Received

The manager investigating the complaint will arrange for a response to be drafted. The draft response will be reviewed by the Compliance Officer and approved or amended as necessary before being signed by either the Complaints Manager or CEO and sent to the complainant.

The agreed timetable for all complaints is for an acknowledgement of the complaint to be dispatched within two working days after the day of receipt. A constructive response should be sent out within ten working days. If this is not possible due to the degree of investigation required, the complainant should be sent a further interim communication.

Where a substantive response in relation to a complaint has been provided by BSC, unless and until BSC receives an indication from the complainant that they are not satisfied with our response, BSC will treat the complaint as settled and resolved after four weeks from the date of BSC’s response.

The Complaints Manager always verifies if the complainant is satisfied with the handling of his or her complaint. If a solution is not to the satisfactory of the complainant, he or she will be informed about the possibility to escalate to the Klachteninstituut Financiële dienstverlening (KIFID, the complaints institute financial services).

9. Follow-up Action

The Complaints Manager, and where required, CEO, will be responsible for initiating any follow-up action deemed necessary as a result of the complaint together with deciding if any disciplinary action is necessary and to arrange for the appropriate action to be taken.

10. Responsibilities

It is the responsibility of every manager, employee, financial adviser representative and anyone else affiliated with BSC to be cognizant of the complaints procedure and of their obligation to follow it.

This procedure is aimed to ensure that all complaints are treated effectively, fairly and properly.

Where the complaint has highlighted a weakness in any of the BSC procedures, it is the responsibility of the Board and Management to develop and implement revised procedures to minimise the chance of any repetition of the event leading to the complaint.

11. Records

The Compliance Officer will be responsible for keeping copies of all complaints and the responses in a Register.

These copies will be retained for at least three years after the complaint has been settled or resolved including all correspondence, file notes and actions taken pertaining to the complaint.

A computer spreadsheet showing all complaints received will be maintained by the Compliance Officer.

12. Board reporting of Complaints

The Board of Directors will receive and review a report of all complaints received as part of the Compliance Officer’s quarterly board report. This will include nil returns, details and status updates of any previous unresolved complaints, and a summary of each new complaint received including progress in resolving them.

It is important that nothing prejudicial is recorded either in the complaints Register or in written reports in Board Minutes, nor should any full client names be mentioned in any Board documentation or minutes (i.e. acronyms or abbreviations should be used). The Board should be updated verbally to the extent that it wishes to have details of the merits or demerits of a complaint and the minutes should not contain any prejudicial information relating to the complaint but only factual information.

The Board of Directors and the Compliance Officer will evaluate complaints at least yearly to assess if complaints are structural due to the manner of performing activities.

Once every six months (at last at February 8 and August 8) the AFM will be informed using the AFM template (https://www.afm.nl/nl-nl/nieuws/2017/dec/klachtenrapportage-mifid). This will be provided by the Board; the Compliance Officer will validate transmission of the list.

BSC is a participant of the Klachteninstituut Financiële dienstverlening (KIFID, complaints institute financial services).

Whistleblower Policy

Introduction 

The management board of Black Swan Capital B.V. (“BSC”) is committed to achieve a safe and ethical environment for all persons working at and for BSC. Anyone who works or has worked at or for BSC, regardless of position, location or contract form, is invited to report suspicions of wrongdoing. This Whistle blower policy explains how a Whistle blower can safely report suspicions of wrongdoing internally and externally.

Reporting Method

A suspicion of Wrongdoing can be reported to the compliance officer (internal reporting, see paragraph 4). The Whistle blower may also report suspected Wrongdoing directly to a Competent authority (external reporting, see paragraph 6). Reporting may be done verbally, by e-mail or in writing.

The Whistle blower can choose to report anonymously by emailing via a temporary email address or by sending a letter. An anonymous report is always taken into consideration, but an investigation will not always succeed due to possible lack of information if communication with the Whistle blower is not (or no longer) possible.

Advice

A Whistle blower may, when reporting or considering suspected Wrongdoing, ask the advisory department of the Huis voor Klokkenluiders for confidential advice and information at any time (https://www.huisvoorklokkenluiders.nl/english).

Internal Reporting

·       When the Whistle blower makes a verbal report of Wrongdoing, the conversation is recorded or a complete and accurate transcription of the conversation is made with the Whistle blower's prior consent. The Whistle blower is given the opportunity to check the written transcript of the reporting conversation, correct it and sign for approval or approve it by e-mail.

·       The compliance officer registers the report received in a register set up for this purpose and confirms the report to the Whistle blower by e-mail without delay but no later than seven days after the report.

·       The compliance officer informs the management board or the Supervisory Board (if the report concerns the management board), about the report and advises them on the investigation to be launched.

·       The management board or the Supervisory Board (if the report concerns the management board) decides on the approach of the investigation. The investigation may be conducted internally or, in case of insufficient internal capacity or expertise on the subject, by an external investigation agency.

·       The identity or information by which the identity of the Whistle blower can be directly or indirectly traced will not be shared with anyone other than the Internal reporting channel and (if applicable) the investigators without the consent of the Whistle blower (in writing or by email).

Conducting an Investigation

·       The management board or the Supervisory Board (if the report concerns the management board) transfers the investigation to investigators.

·       The compliance officer informs the Whistle blower by e-mail that an investigation has been launched, who is conducting the investigation and what the terms of reference of the investigation are. In this confirmation, the compliance officer draws the Whistle blower's attention to the possibility to consult the advisor of the Huis voor Klokkenluiders if the Whistle blower feels the need to do so.

·       The compliance officer shall inform the Whistle blower about the substantive assessment and, if applicable, the follow-up to this report no later than eight weeks after the confirmation of receipt. Should it not be possible to complete the investigation within eight weeks, the compliance officer shall inform the Whistle blower before the end of that period. The compliance officer will send the Whistle blower a progress report at least every four weeks, even if no progress has been made.

·       The management board informs the person(s) to whom a report refers of the report, unless there are serious objections. The management board determines whether there are serious objections and records the reasons if there are.

·       In conducting the investigation, the following principles are applied:

o   the principles of Dutch and European privacy laws and regulations are met;

o   data are collected lawfully and proportionately;

o   unlawfully obtained data will not be used;

o   hearing takes place. Where an adversarial process cannot take place during the investigation, it shall take place at the latest prior to decision-making based on the investigation.

·       The investigator may inspect and request all documents of BSC (all relevant information, such as paper documents, electronic documents, e-mails and other durable data carriers) that he/she deems reasonably necessary to conduct the investigation. The investigator shall also give the Whistle blower an opportunity to be heard. The investigator may also hear others, including the person(s) to whom the report relates. The investigator makes a written record of all interviews conducted and submits this record to the person heard for checking, correction, approval and signature. The person heard shall receive a copy thereof.

·       The investigator draws up a draft investigation report and gives the Whistle blower and the person(s) concerned by a report the opportunity to give their views on it. These are added to the report.

·       The investigator then draws up the investigation report and sends it to the management board or to the Supervisory Board if the investigation concerns the management board. The latter sends a copy to the compliance officer, the Whistle blower and the person(s) to whom a report relates. If there are serious objections to this, it can be assessed whether parts of the report can be shared.

·       Based on the report, the management board or Supervisory Board if the investigation concerned the management board decides whether and if so what measures should be taken.

External Report

A Competent authority has established a reporting channel for receiving and processing a report. The Competent authority's regulation on Whistle blowers should be consulted for following up the external report.

Confidentiality

All persons involved in the reporting or investigation are obliged to keep confidential information confidential. An exception to this is if there is a legal obligation to report, such as the mandatory reporting of an Integrity incident to the AFM. Confidential data refers in any case to the identity of the Whistle blower and the accused persons as well as trade secrets.

Protection (when reporting)

The Whistle blower, the person assisting the Whistle blower, a Third party involved, the Internal reporting channel, the investigator(s) and any witnesses heard in an investigation may not be disadvantaged because of making a report.

The condition for this protection is that the Whistle blower has reasonable grounds (supported by facts) to believe that the reported information is correct at the time of the report. It is not necessary for the Whistle blower to present evidence for the suspicions.

Protection (in case of disclosure of the report)

Retaliation against the Whistle blower, the person assisting the Whistle blower, a Third party involved, the Internal reporting channel, the investigator(s) and any witnesses heard in an investigation because of the disclosure of suspected Wrongdoing is prohibited. Conditions for this protection are that:

·     the Whistle blower has reasonable grounds to believe that the reported information is correct at the time of the report. It is not necessary for the Whistle blower to provide evidence for the suspicions, and

·     the Whistle blower has first made an internal report to [the compliance officer/the Internal reporting channel] and a Competent authority or has reported directly to a Competent authority and the Whistle blower has reasonable grounds to believe that the investigation is not progressing sufficiently, or

·     the Whistle blower has reasonable grounds to believe that:

-        the Wrongdoing may pose an imminent or real danger to the public interest;

-        there is a risk of prejudice in reporting to a Competent authority, or

-        the Wrongdoing is unlikely to be remedied effectively.

Release from liability

The Whistle blower, the person assisting the Whistle blower, a Third party involved, the Internal reporting channel and the investigator(s) may not be held liable for making a report of Wrongdoing or disclosing it when:

-      the Whistle blower does not share more than is necessary to make the report; and

-      the Whistle blower has made the report or disclosure following the steps as indicated in these regulations.

However, the Whistle blower, the person assisting the Whistle blower, a Third party involved, the Internal reporting channel and the investigator(s) may be held liable when the acquisition of or access to information is criminalised.[1]

No right to protection

Anyone who intentionally and knowingly reports or discloses incorrect or misleading information does not enjoy protection and may even be punished for it. The person assisting the Whistle blower, Third parties involved, the Internal reporting channel and the investigator shall not lose protection in this case as long as they are not themselves also guilty of intentionally and knowingly reporting or disclosing false or misleading information.

Protection remains in place when the Whistle blower has reported with the right intentions, but the report ultimately turned out to be unfounded.

Duty to notify the supervisor 

BSC is obliged under the Wft to notify AFM without delay if the Wrongdoing qualifies as an concerns the management board board) establishes that an Integrity incident has occurred, it shall report this to AFM without delay. The Whistle blower will also be informed prior to this external report.

Processing Personal Data 

In the context of this Whistle blower Policy, the following personal data may be processed: name, position, (e-mail) address and telephone number of the Whistle blower, the person about whom the report is made and/or Third parties involved. The principles as included in privacy policy of BSC will be applied here.

The personal data will be destroyed from six months up to a maximum of one year after the report has been determined to be inadmissible, or if after an investigation it appears that there is no Wrongdoing. If after an investigation it is found that there is Wrongdoing, the investigation file will be anonymized after a maximum of one year after the investigation is completed.

Policy Review 

This Policy will be reviewed on:

·        an annual basis; or

·        when changes occur in relevant laws and regulations or BSC’s business activities or internal organisation.

The compliance officer is responsible for reviewing and, where necessary, updating this Policy. The management board will approve the amended Policy after having received advice on the review and update from the compliance officer.

[1] Protection of classified information, medical professional secrecy, professional secrecy of lawyers, judicial deliberations and criminal procedure law remain in place.

Remuneration Policy Summary

Black Swan Capital is bound by, and adheres to, the Dutch stipulations concerning remuneration.

Regulatory stipulations:

•  Art. 27 Delegated Regulation 2017/565

•  FSA art. 1:114-1:125, 4:14 and 3:7

•  ESMA guidelines

•  Regeling Beheerst beloningsbeleid 2017 (Regulation on Sound Remuneration Policies (RBB) 2017)

This Remuneration Policy reflects the legal principles set out in the above regulations and governs all types of remuneration that BSC grants to its employees.

The remuneration policy of Black Swan Capital is in keeping with the company’s strategy, risk profile and risk appetite. The recruitment policy is aimed at recruiting and retaining qualified and knowledgeable individuals that adhere to the same principles of client service.

This Remuneration Policy contributes to a sound and effective risk management by BSC and, more specifically aims to avoid excessive risk-taking behaviour. The Remuneration Policy always will have the spirit of BSC’s core values i.e. our clients come first. Therefore, the Remuneration Policy aims at aligning the personal objectives of employees with the long-term interests of BSC and its clients and may never lead to conflicts of interest towards our clients.

This Remuneration Policy has been set up by the Board of Directors of BSC and has been approved by its shareholders. The Board of Directors is responsible for the implementation of and compliance with the policy.

Remuneration of non-identified staff

Non–identified staff are governed by the stipulations of Chapter 1.7 of the FSA and not the Regeling Beheerst Beloningsbeleid 2017.

Remuneration of identified staff

Identified staff are governed by the stipulations of Chapter 1.7 of the FSA and also the Regeling Beheerst Beloningsbeleid 2017.

BSC has identified the Chairman, Chief Executive Officer, and Managing Director as Identified Staff. The Identified Staff are governed by the stipulations of Chapter 1.7 of the FSA and the Regeling Beheerst Beloningsbeleid 2017.

General provisions

There are currently no variable components to remuneration for any employees or management (including managing board). The board at their discretion may consider a bonus pool policy in the future based on company performance, profitability, adequate reserves, and other compliance and quality features, or may continue to defer it for a given period of time. If the Board of Directors decides to introduce variable remuneration, the Remuneration Policy will be reviewed and amended in accordance the legal principles set out in regulatory stipulations listed above.

Remuneration policy Managing Board

The remuneration policy for the Board of directors is set at the commencement of each financial year and is a fixed salary reflective of the seniority and input of the directors. Decisions on remuneration of the Board members of BSC will be made by the full board in collaboration with the shareholder.

Remuneration policy for Employees

The remuneration policy for employees is straightforward and clear. The policy applies to all employees (including identified staff) regardless of position and level. There is no variable component to salaries of any employees. A written and signed employment agreement will be in place for each employee. The fixed remuneration of the employee reflects the relevant work experience and organizational responsibility of the employee. This applies to all employees at all levels.

All employees, including directors need approval from their immediate senior before incurring any expenses on behalf of the organization. Any pre-approved expenses may be reimbursed monthly.

SFDR Policy

The remuneration policy of Black Swan Capital aims to prevent potential rewards resulting in the unfair treatment of clients, or the taking of extraordinary risks causing a negative impact on any investment advice provided, to Black Swan Capital as a financial organization and/or to the financial industry as a whole.

The Board of Directors is of the opinion that the remuneration policy should be structured  in such a manner that the relevant professional will focus on the long-term interest of clients and avoid any extraordinary risks causing a negative impact on any investment advice provided, to Black Swan Capital as a financial organization and/or to the financial industry as a whole.

Governance and Review of the Remuneration Policy

The shareholder(s) of BSC will approve of each version of the Remuneration Policy.

BSC will not contribute to, propose or implement structures, proposals, contracts or vehicles that would facilitate or serve the purpose of circumvention of the Remuneration Policy.