Cathay Innovation manages professional funds (FPCI [innovation-focused mutual funds] and SLP [Limited Partnership]), the purpose of which is to invest primarily in unlisted financial instruments and, to a lesser extent, in financial instruments that are traded on a regulated or organised market. The voting policy is an integral part of the oversight of the portfolio companies.
Cathay Innovation’s position, as a matter of principle, is to vote on resolutions that are put to the vote during the general shareholders’ meetings of its portfolio companies. Cathay Innovation regards effective participation in general meetings as a priority, but reserves the right, in particular in light of the circumstances, to vote by mail or by proxy.
Cathay Innovation reports on the voting decisions that are made, in the funds’ annual reports.
Claims processing policy
Cathay Innovation has designed and implements a procedure to ensure the efficient, reasonable and timely processing of claims that are filed by its investors.
In accordance with AMF Instruction no. 2012-07, any statement confirming a client’s dissatisfaction with a portfolio management company is deemed to constitute a claim. A request for information, an opinion, clarification, a service or action, is not a claim.
All claims can be sent to the Investor Relations department at the following e-mail address InvestorsRelations@cathay.fr or by letter to Cathay Innovation, 52 rue d’Anjou, 75008 Paris, France.
Cathay Innovation undertakes to process claims within ten working days as from the date of receipt. If Cathay Innovation is not in a position to process the claim within this timeframe, it will acknowledge receipt thereof within ten working days and process the claim within a maximum of two months as from the date of receipt.
If the claim is rejected or refused in whole or in part, it is possible to refer the matter to the AMF Ombudsman. The AMF Ombudsman has authority over all disputes concerning a financial instrument, an investment service or, more generally, a matter that falls within the AMF’s scope of authority. She is the appropriate public ombudsman within the meaning of sub-paragraph 7 of Article L. 611-1 of the French Consumer Code, where said disputes are between a professional (portfolio management company) and a consumer, i.e., a natural person who is acting for purposes that do not fall within the scope of his/her commercial, industrial, independent or agricultural activity.
The investor may refer a matter to the AMF Ombudsman:
- On the AMF website at: https://www.amf-france.org/en/amf-ombudsman/ombudsman-presentation-0, where the mediation request form is available, and precise explanations concerning the Ombudsman’s role are provided;
- By sending a letter to the following address: Le Médiateur, Autorité des marchés financiers, 17 place de la Bourse, 75082 Paris cedex 2, France.
Procedure for managing conflicts of interests
Cathay Innovation has a policy for managing conflicts of interests, in accordance with the regulations in force. Cathay Innovation has implemented organisational and administrative arrangements with a view to taking all reasonable steps that are designed to identify, prevent, manage and monitor all conflicts of interests, in order to avoid them harming the interests of the Funds and of their unit holders or shareholders.
Cathay Innovation takes all reasonable steps to identify and manage conflicts of interests that may arise between:
- Cathay Innovation (including its directors, its employees or all persons who are directly or indirectly linked to Cathay Innovation by a relationship of control), and a Fund managed by Cathay Innovation (or the holders of units in or shareholders of said Fund);
- A Fund (or the holders of units in or shareholders of said Fund) and another Fund (or the holders of units in or shareholders of said other Fund);
- A Fund (or the holders of units in or shareholders of said Fund) and another Cathay Innovation client;
- Two Cathay Innovation clients.
Cathay Innovation has mapped potential conflicts of interests. This mapping identifies situations which give rise or could give rise to a conflict of interests, such as:
- Allocation of investment files: conflicts may arise between the Funds (or the holders of units in or shareholders of said Funds) depending on the allocation of investment opportunities;
- Representation of Cathay Innovation by the members of its management team on the boards of directors of the portfolio companies: the team members may have conflicting obligations with regard to Cathay Innovation and with regard to a portfolio company;
- Preferential treatment of certain investors: some investors may benefit from favourable conditions concerning the possibilities of joint investment or fees;
- Transfer of holdings: the interests of a Fund (or the holders of units in or shareholders of the Fund) may be treated unfavourably compared to those of another Fund (or the holders of units in or shareholders of said second Fund) following a transfer from one Fund to the other.
The mapping of the conflicts of interests is updated regularly and at least once a year.
Cathay Innovation has taken the following steps in order to identify and manage conflicts of interests, including:
- Employee training: the employees who are directly concerned receive periodic training concerning the regulatory requirements to which they are subject, as well as concerning the in-house policy on the identification and management of conflicts of interests.
- Personal transactions: Cathay Innovation has defined a policy concerning employees’ personal transactions. Employees must report annually on their transactions during the past year.
- Independence: Cathay Innovation has taken care to organise its teams with the aim of ensuring the independence of the persons who are tasked with valuing the portfolio assets of the management teams.
- Deal flow: Cathay Innovation has defined rules and principles on the basis of which investment files are allocated. These rules and principles are incorporated into the Fund Regulations.
- Fund Regulations: the Fund Regulations define the conditions under which joint investment transactions, transfers of holdings, complementary investments and trades between Funds may take place. In all cases, these operations are always undertaken under equivalent financial and legal conditions for both investment and disinvestment, while taking into account the specific situations of the various Funds concerned.
- The Investors’ Committee: which is made up of representatives of the Funds’ most significant investors. Each Fund has its own Investors’ Committee. The Investors’ Committee is consulted concerning conflicts of interests.
- Monitoring of conflicts of interests: Cathay Innovation keeps a register that lists the situations that have been encountered in practice, the chosen resolution method and the follow-up.
Moreover, where the organisational systems implemented are not enough to ensure, with reasonable certainty, that the risk of harming the interests of unit holders or shareholders will be averted, Cathay Innovation will inform investors clearly, before acting on their behalf, of the general nature or the source of these conflicts of interests.
Policy on best execution and selection of intermediaries
Cathay Innovation may carry out investment and disinvestment transactions involving listed companies. Where this is the case, Cathay Innovation does not execute the orders itself, and merely transmits its orders to intermediaries that have been carefully selected. In order to do so, Cathay Innovation has drawn up and implements a selection policy for intermediaries, which is based on several criteria, including the price and the quality of the service, reliability and the intermediary’s capacity to execute the orders and settle the corresponding amounts. Each year, Cathay Innovation evaluates the intermediaries with which it does business, in order to ensure that it only works with quality entities.