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Barings conflicts of

interest policy
SECTION A: INTRODUCTION
Business activities & organisational structure of Barings
The Barings companies provide discretionary investment
management services. They also sell Barings funds and services
direct to institutional clients and through other professional
distributor firms.
Barings ultimate parent company is Massachusetts Mutual Life
Insurance Company. The principal intermediate Barings company is
Baring Asset Management Limited (BAML); which is the governing
body of Barings. The members of the Board of Directors and the
Management Committee of BAML are responsible for ensuring that:
(a) reasonable measures are taken to identify conflicts of interest;
(b) effective organisational and administrative arrangements are
maintained to prevent conflicts of interest from adversely affecting
the interests of Barings clients; (c) records are maintained of the
kinds of services/activities carried out by or on behalf of Barings in
which conflicts of interest entail, or may entail, a material risk of
damage to the interest of one or more clients.
Definitions of terms used in this Policy
Affiliated company: means Massachusetts Mutual Life Insurance
Company and its subsidiaries that are not part of Barings.
Barings: means BAML and its subsidiaries and Baring North
America LLC (but excluding Baring Asset Management Korea
Limited).
Barings Funds: means open-ended collective investment
schemes/mutual funds and closed end funds that are established,
sponsored and managed by Barings.

In addressing any situation of conflicts of interest, Barings


overriding principle is to act in the interests of its clients. Barings
approach to managing or dealing with conflicts is to incorporate the
required detailed Controls within specific policies and processes
relating to the relevant subject matter/activities conducted by
Barings companies and departments. Consequently, each of the
conflicts (and related arrangements) that are summarised below, are
subject to separate detailed individual policies and/or procedures.
The potential conflicts identified by Barings, and summarised in
section B, arise in the conduct of its discretionary investment
management activities. The Controls are designed to demonstrate
that robust processes are in place to reduce the possibility of
material risk of damage to the interest of Barings clients by virtue of
Barings and/or its employees being capable of: (i) making a financial
gain, or avoiding a financial loss, at the expense of a client; (ii)
having an interest in the outcome of a service provided to a client or
of a transaction undertaken on behalf of a client, which is distinct
from the clients interest in that outcome; (iii) having a financial or
other incentive to favour the interest of one or more clients over the
interests of another client or clients; (iv) carrying on the same
business as a client; and (v) receiving from a person (other than a
client) an inducement in relation to a service provided to a client, in
the form of monies, products and/or services, other than the
standard agreed or disclosed fee or commission for that service.
The Conflicts Policy is reviewed at least annually to ensure that the
potential conflicts and controls remain applicable. Potential new
conflicts are considered as part any new business development
and/or business process changes.

Clients: means institutions and individuals to whom Barings provides


discretionary investment management services.

SECTION B

Client Mandate: means the specific investment policies, guidelines,


restrictions and risk tolerances set out in the investment
management agreement between each client and Barings.

Potential Conflicts: In undertaking business for its clients, Barings


dealings or other arrangements with affiliated companies present
possibilities for Barings to treat its affiliated companies more
favourably than unaffiliated clients.

Controls: means the policies, procedures, organisational and


supervisory arrangements designed, established and implemented
by Barings to manage and monitor the conflicts of interest set out in
this Policy.
Employees: means directors, officers and employees of Barings.
Securities: means shares, bonds and other financial instruments.

Purpose of this Policy


The purpose of this Policy is to summarise the potential conflicts of
interest arising in the conduct of investment business by Barings
that could present material risk of damage to the interests of
Barings clients in the absence of Controls. The conflicts of interest
are: (a) as between Barings and/or its employees and clients; (b) as
between one client/group of clients and another client/group of
clients and, (c) as a result of the structure and business activities of
Barings or its relationship with its affiliated companies; and the key
Controls. The conflicts of interest and the Controls are summarised
in section B below.

Dealings and arrangements with Affiliated Companies

Barings Controls: Barings provides discretionary investment


management services to affiliated companies and investment
vehicles sponsored by affiliated companies. Affiliated companies
also invest in Barings Funds. However, in respect of all such
services provided by Barings to its affiliated companies, the terms of
the service/investment, fees and other charges paid to Barings and
the treatment of such affiliated company clients are provided on an
arms length basis and they are treated on the same basis and in
accordance with the same procedures/processes as those which
apply to Barings unaffiliated clients.
Certain aspects of the structure of Barings and its affiliated
companies, and due to a number of services not being
provided/conducted by them, ensure that a number of conflicts of
interest do not arise. These are: (a) neither Barings nor its affiliated
companies: (i) issue securities for investment by the public,
therefore, Barings could not invest in any such securities for clients;
(ii) provide banking or custody services and therefore such services
cannot be provided to Barings clients; (iii) act as advisers, manager
or arrangers in an issue of securities by another company or is
involved as lead or co-managers in placings, new issues,

underwriting or offers for sale or otherwise receive remuneration for


acting in a corporate finance or similar transaction involving a
company whose securities are held by Barings clients, (b) Barings
does not publish written research recommendations for clients or
any third parties to act upon. Market analysis and overview reports
are provided to clients as part of their periodic valuations, however,
no recommendation is made to buy, sell or retain any security.
[Baringss analysts will not be aware of any publication intended to
be sent by Barings affiliated companies of written
recommendations, or a piece of research or analysis, to their
clients.], (c) no transactions are effected by Barings on behalf of its
clients with, or through the agency of, any affiliated company that is
a broker/dealer.

Dealings by Barings directly with clients


Potential Conflicts: Buying for and selling to clients, securities from
Barings own account; undertaking any other transaction directly
with Barings could give rise to possibilities of unsuitable investments
being made for a client and Barings obtaining unfair financial gain.
Additionally, undertaking any other transactions on behalf of clients
in relation to which Barings receives any compensation,
commissions or fees from a third party (which has not been agreed
with or disclosed to a client) who is the issuer or otherwise has an
interest in that transaction could benefit Barings at the expense of
its clients.
Barings Controls: Barings does not act in a principal capacity with
its clients (i.e. it does not buy from, or sell to, its clients any
securities from its own account). Its role is always that of an agent
of its clients. Securities are purchased and transactions undertaken
for clients through third party brokers and other counterparties (such
as banks).
For Client Mandates that permit Barings to invest on behalf of clients
in Barings Funds, investments made for the client portfolio exclude
either all or a proportion of the management fee Barings receives for
management of the Barings Fund. No incentive or remuneration is
provided to portfolio managers or any other employees to invest in
Barings Funds and any such investments must be permitted by the
client and be suitable having regard to the Client Mandate.
For Client Mandates that permit Barings to invest on behalf of clients
in third party funds, any rebate Barings may receive will be passed
to the client.
Barings may undertake transactions on behalf of clients in securities
issued by another client (e.g. where that client is a listed company
and its securities form part of an index). In such circumstances, the
relationship with the client that is the issuer of the security is
required to be disregarded and any investment decision taken is
solely on the basis of the investment rationale and suitability.

Segregation of duties
Potential Conflicts: Activities and roles of employees involved in
making investment decisions and/or monitoring investment
restrictions, investment risk or arranging execution of client trades
could present possibilities for such employees to favour or
disadvantage one or more clients and to gain financial benefits if
they were able to influence the selection of brokers/counterparties
without appropriate Controls.
Barings Controls: These are designed to ensure that clear
segregation of duties is maintained between employees and
processes involved in investment decision making and those
involved in monitoring investment restrictions, investment risk and
execution of transactions.

Investment and borrowing restrictions: Client investment and


borrowing restrictions are monitored by the Operational Compliance
Unit. This team is independent of the Investment team and report
through to Barings Chief Operating Officer.
Investment Risk: The level of investment risk in a clients portfolio is
monitored by the Investment Risk team. This team is independent of
the Investment team and report through to Barings Chief Operating
Officer.
Execution of transaction: Portfolio managers are not permitted to
select or instruct a broker/counterparty to execute a transaction. The
brokers/counterparties from whom execution price quotes are
sought and the selection of the broker/counterparty to execute a
trade must be determined by the dealers and orders are permitted
to be relayed to brokers/counterparties only by the dealers.
This separation of duties is further reinforced by the separation of
reporting lines of portfolio managers, who report directly or indirectly
to Barings Chief Investment Officer and, the dealers who report
through to Barings Chief Operating Officer.
(Note: For OTC derivatives the Dealers will obtain quotes and
Investment Managers will select which ones they wish to execute
against. The Dealers will then confirm best execution.).
Barings Credit & Counterparty Committee is responsible for
reviewing and approving each broker/counterparty that is permitted
to be used to execute a trade on behalf of a client. Only
brokers/counterparties approved by the Credit & Counterparty
Committee are permitted to be used by the dealers to execute client
trades.

Fair allocation & participation in investment opportunities


Potential Conflicts: The processes involved in the research of
securities, execution of trades, allocation of securities forming part
of a trade, participation in Initial Public Offering (IPOs), private
placements and sub-underwritings could result in unfair trade
execution or allocation across clients accounts of investment
opportunities and trades being executed in priority to favour one or
more clients at the disadvantage of other client(s).
Barings Controls:
Research of securities: All securities have to be rated or approved
before they can be purchased.
Aggregation of Orders: Barings dealers generally seek to aggregate
orders for more than one client in circumstances that they
reasonably believe will result in a more favourable overall execution.
Due to market movements or depending on the liquidity of the
security, it may not be possible to receive the same execution price
or to execute the whole order. In such circumstances, Barings may
allocate securities purchased/sold at the average price of the
executed trade. Aggregation may not be possible in certain
circumstances, for example, client directed trades (i.e. where a
client has specified the brokers/counterparties permitted to be used
for trades for their account) and the broker/dealer is not on the list of
Barings approved brokers/counterparties. Transaction Order
Priority: Barings dealers are required to arrange execution of orders
in due turn amongst all orders received by the dealing desks.
Orders received by the dealers throughout the day are added to the
consortium of outstanding orders awaiting execution. Certain
circumstances may arise where strict due turn is not possible, for
example, client directed orders and orders in markets which do not
permit average prices. Such examples represent a small percentage
of Barings business.
Allocation of Investments: Barings requires that subject to the terms
of each Client Mandate, portfolio managers consider participation in
an Initial Public Offering, private placement or sub-underwriting for

each client. For aggregated orders the intended allocation across


client accounts is recorded prior to the deal being placed.
Barings dealers aim to fill the order in a reasonable number of
tranches. Where an order is not fully executed (e.g. due to lack of
liquidity), the executed amount is normally allocated to clients on a
pro-rata basis to the original intended allocation. However, where
only a small percentage of an order is filled, the amount of the order
filled may be allocated to a few clients rather than to each intended
client; thereby avoiding transaction costs for each such client.
In certain circumstances an allocation of a trade may be changed
and re-allocation procedures must then be applied. This includes
situations where: (i) an error occurs either in the intended basis of
allocation or the actual allocation. The re-allocation must be fair and
the justification for it recorded; (ii) the order is only partially executed
and results in an uneconomic allocation to some clients (as outlined
above). A re-allocation must reasonably be in the best interests of
all the affected clients.
For participation on behalf of clients in initial public offerings, private
placements and sub-underwritings, the procedures similarly require
pre-allocation of participation in such investment opportunities. If the
full amount of an initial public offering subscription made by Barings
on behalf of its clients is not received, due to scaling back,
economic size and preferences for minimum holdings will affect the
allocation. Records of the reasons for deviating from a pro rata
approach are required to be kept. Underwriting for clients is
participated in proportion to any existing holdings of client portfolios.
Records of the reasons for deviating from a pro rata approach are
required to be kept.
Cross-trades: In some instances the orders for both the purchase for
one client and sale for another client of the same amount of the
same security may be arranged. In such cases Barings arranges
the execution of both sides of the trade through an independent
broker/counterparty. Such transactions are only effected where
Barings determines it to be in the best interest of each client and
subject to the Client Mandate and all applicable regulations.

Trade Errors
Potential Conflict: Errors whilst trading (for example a breach of a
client investment restriction), may not be rectified promptly and the
client appropriately compensated to avoid a financial loss.
Barings Controls: Barings has established an Incident Reporting
policy which requires the prompt reporting and rectification of all
incidents (including trade errors). The policy requires that Barings
reimburse the client for any loss incurred. The Incident reporting and
investigation processes and controls in place ensure that clients are
not disadvantaged by any trading error made by Barings.

Positions held by employees in firms other than at Barings


Potential Conflict: Employees who are portfolio managers, dealers
or who may otherwise have a position of influence within Barings or
who have access to client trade/portfolio information and, who hold
similar positions with other another firm that issues securities which
are or could be invested in by Barings for its clients or where such a
firm carries on the same/similar activities as Barings carries the
potential for such employees being capable of using their position
and information obtained from either firm to obtain financial gain or
avoid a loss.
Barings Controls: These apply to all employees. If an employee
wishes to accept/take any position with an entity external to Barings
as a director, officer or any position having any fiduciary
responsibilities or involvement in handling/overseeing finances,
whether or not he/she will be remunerated and/or committing time

during Barings working hours, prior consent of Barings senior


management is required. In considering any such request, the
considerations applied include the suitability of the individual for that
role, any conflicts which may arise, issues of client confidentiality,
sensitive/inside information and any other pertinent matters
involved. Barings reserves the right to deny, or impose conditions in
respect of, any such request made by an employee. Even if
approval is given, the individual may not be permitted to derive any
personal benefit by way of any remuneration received in respect of
the third party role. New employees are required to disclose any
positions held and are also subject to the same approval procedures
as outlined above. A register of all such approvals given to
employees is maintained by the Compliance Department.

Proxy voting for clients


Potential Conflicts: Where clients permit Barings to exercise voting
rights attached to securities held in their portfolios, the conflicts of
interest include circumstances where: (i) the company soliciting the
vote is a client of Barings and, (ii) the portfolio manager who is
involved in making the voting decision (or a person connected with
him/her) is a director, officer, or employee of the company soliciting
the proxy.
Barings Controls: Barings has established a Proxy Voting Policy
which is overseen by the Proxy Voting Committee. The policy is
designed to ensure that votes are cast in accordance with the best
economic interest of clients. The proxy voting process is managed
and co-ordinated by the Investment Operations area of Barings.
Barings uses the services of Institutional Shareholder Services
(ISS), an independent third party service provider to provide proxy
analysis, information on events requiring voting, vote
recommendations, and to execute the voting decisions of Barings
investment teams. Barings ordinarily vote clients proxies according
to ISSs proxy voting recommendations. Proxies on all proposals are
voted, except in those instances when the portfolio manager, with
guidance from the Proxy Voting Committee if desired, determines
that the cost is outweighed by the economic benefit to the clients of
voting those proxies.
Portfolio managers may override ISSs recommendations if they
believe that ISSs recommendations are not in accordance with the
best economic interests of clients. In the event that the portfolio
managers disagree with an ISS recommendation on a particular
voting issue, the appropriate portfolio manager must record the
reasons he/she believes that the ISS recommendation is not in
accordance with clients best economic interests. To the extent a
client has instructed Barings how they would like Barings to vote
proxies on particular issues of corporate governance or other
matters, Barings will be responsible for voting in accordance with
the clients instructions.
In the event of a vote where a portfolio manager has disclosed a
conflict of interest relating to the company soliciting the vote or
where ISS is conflicted and also where the portfolio manager is
seeking to override ISS recommendations, the Proxy Committee is
required to review the issue and direct ISS how to vote the proxy.
The minutes of the Proxy Committee must describe any real or
perceived conflict of interest, how the conflict has been addressed,
and confirmation that the recommendation as to how the proxies are
to be voted is in the best economic interests of clients and was
made without regard to any conflict of interest.

Receipt & offer of inducements


Potential Conflicts: The giving or receiving by employees of gifts,
hospitality or other benefits may constitute a material inducement to
act to the advantage of one or more clients. Additionally, payments
made by Barings to or received from other firms for the

introduction/retention of business could act to the disadvantage of


one or more clients
Barings Controls: These govern the offering/giving and
soliciting/accepting of gifts and hospitality and any other benefit or
inducements. Any gift/hospitality employees receive or provide
must not be of such an amount nor so frequent as to materially
conflict with any duties owed to Barings clients. The basic
requirement, which applies to all employees, is that any
gift/hospitality received/dispensed of a value over a specified
threshold monetary value must be reported to the line manager and
a Compliance Officer. If the recipient wants to keep a gift, he/she
may do so only with the approval of the line manager and a
Compliance Officer and provided that the fair market value is
donated by the recipient to a charity. If the recipient does not want
to keep the gift, it must be donated to a charity.
Additional requirements apply to staff holding specified positions,
including portfolio managers, sales, analysts and dealers: (a) any
gift/hospitality received or to be offered by such an employee of a
specified monetary value (the higher threshold amount) requires
the prior approval of his/her Head of Department and a Compliance
Officer; (b) each item of gift/hospitality received or dispensed above
a specified minimum threshold must be recorded on a monthly
register, together with any item previously approved which was of a
higher threshold amount. The Head of Department is required to
review and sign the register and in so doing he/she is also required
to consider whether there is any undue frequency of gifts/hospitality
prior to the register being submitted to the Compliance Department.
Barings Compliance personnel undertake periodic reviews to
independently assess, and report on, whether any gifts/hospitality
given or received by employees appear to be excessive. The
Compliance Department also monitor any breaches of the Controls
and are required to report breaches to Barings senior management
as part of regular monitoring reports provided by the Compliance
Departments.
Payments made by Barings to or received from other firms for the
introduction/retention of business will only be made where
disclosure of such payments has been made to the underlying
client.
Dealings and potential dealing with trade counterparties where a
connected person is employed
Potential Conflicts: In undertaking business for its clients, Barings
dealings presents possibilities for Barings to treat trade
counterparties more favourably where connected persons are
employed.
Barings Controls: Barings dealers are required to declare to the
Compliance department and the Head of Dealing whether they have
connected persons employed with actual or potential trade
counterparties. The Compliance department maintains a log of such
connections and takes these into account in its periodic trade
monitoring.

Personal Account trading by employees of Barings


Potential Conflicts: Employees who are either involved in the
investment decision making for clients or who have access to
information about trades effected for clients, could use such
information to carry out (for themselves or other persons connected
with them or over whom they have influence) transactions in the
same security (or a related security) to acquire financial benefit.
Portfolio Managers who invest in funds that they manage could
favour these funds over other portfolios that they manage.
Barings Controls: Subject to certain exceptions (e.g where a third
party investment firm manages an employees investment portfolio
wholly at the discretion of the third party firm, mutual funds not

managed by Barings), employees are required to obtain prior written


authorisation to effect a trade in a security for their own account or
that of any person connected with them (PA trade). A PA trade
request is submitted to the relevant Barings investment team(s) and
dealers for review and authorisation/denial. If permission for a PA
trade is granted, it remains valid only for 24 hours. A copy contract
note must be sent directly by the employees broker to the
Compliance Department of the Barings office for which he/she
works.
Unless the specific written consent of a Compliance Officer is
obtained, permission to transact the PA trade will be refused if either
side of the date of the PA trade request, a transaction in the same
investment (or related Investment, such as warrants or options) has
been, or is to be, effected for a Barings client (therefore a blackout
period of seven business days applies). Any consent provided by a
Compliance Officer to trade within a blackout period can only be
given in exceptional circumstances and subject to the Compliance
Officer being satisfied that: (a) the proposed PA trade could not
reasonably be expected to disadvantage any clients and, ordinarily,
only where the employee has been denied permission on numerous
attempts. Permission is more likely to be granted if the PA trade
involves a small amount of a security in an issuer that has a very
high average daily trading volume, such that the PA trade will not
materially affect the price of the investment; and (b) the employee
has no involvement in, and no access to, the investment decision
making, formulation of investment strategy or making of any
investment recommendations to any client for whom Barings has
traded or is dealing in the same security. The Compliance Officer is
required to make a full and detailed record of any consent given,
including the reasons as to why he/she is satisfied that the
abovementioned requirements have been satisfied.
Any investment made by an employee in a Barings Fund must be
held for a minimum of 30 calendar days. In extenuating
circumstances only, a Compliance Officer may grant permission to
sell such a holding within the 30 day period, however, any such
permission will only be given if the Compliance Officer is satisfied
that: (i) no conflict of interest arises (for example, with regard to the
role of the employee and the relevant Barings Fund), and (ii) the
proposed sale could not reasonably be expected to disadvantage
other investors in the Barings Fund. The Compliance Officer is
required to make a detailed record of any consent given, including
the reasons as to why he/she is satisfied that the abovementioned
conditions here have been satisfied.
All PA trades are monitored by Barings Compliance personnel and
the Compliance Department checks that: (a) each PA trade effected
has been properly authorised and reconciles against the trade
confirmation received from the employees broker; and, (b) client
trades executed by Barings in the same security to ensure that there
is no evidence of front-running or back-trading; and (c) there are no
other breaches of the Controls. Contraventions of the Controls are
required to be reported to Barings senior management as part of
regular monitoring reports provided by the Compliance
Departments.
Portfolio Managers investment in their own funds is monitored by
Compliance as part of its periodic trade monitoring to ensure that
they are not favouring these funds over other portfolios. Barings
remuneration policies, arrangements and approvals are established
or approved by Baring Asset Management Limiteds HR and
Salaries Committee. Barings remuneration structure for investment
professionals reinforces the importance of targeting consistent
investment out-performance across all portfolios.

Flow and use of price sensitive information acquired relating to a


security

Potential Conflicts: Employees who have acquired information about


a security that is not publicly available and which, if it were made
public, would have a material impact on the price of that security
could use or disclose such information to obtain a financial gain or
avoid a loss for themselves or other persons.
Barings Controls: These are designed to ensure that they prevent
or deal with receipt/handling of any price-sensitive information as
between Barings companies (and their departments) and as
between Barings and its affiliated companies. Employees are
notified of the prohibitions that apply and the legal consequences of
insider dealing. Portfolio managers are required to make investment
decisions and dealers to execute trades, only on the basis of
information that is in the public domain
If an employee acquires (or believes they have acquired) inside
information about a security or its issuer, he/she is required to
promptly discuss the matter only with a senior Compliance Officer.
The Compliance Officer will assess and determine any particular
course of action to be taken and whether or not the security (and
any related investments such as options, warrants) is to be inserted
on the Stop List maintained by Compliance. If the security is
inserted on the Stop List, this will ordinarily result in Barings not
being able to engage in any trading or dealing activities for its clients
and permission for any personnel account trade in the security
requested by an employee will be refused.
On being made aware that an employee has been made an insider
the Senior Compliance Officer will advise the employee of his/her
obligations, including, not to inform any one else about being made
an insider or the inside information acquired and, not to deal, advise
or encourage anyone else to do so in the security (for Barings
clients or otherwise) until he/she has been informed by a Senior
Compliance Officer that he/she is no longer an insider. The Senior
Compliance Officer will record in the Insider Register the required
details including the security/ies; employees name, manner and by
whom he/she was made an insider, date and time and, when the
insider ceases being an insider and the reason( e.g. the inside
information being made public).
Any removal of an investment from the Stop List is only made when
the information ceases to be price sensitive.
Where an employee who has been permitted to accept the role of a
director, officer, trustee, investment committee member etc of any
non-Barings company which is listed receives, whilst acting in that
capacity, inside information relating to a security issued by that
company, he/she is required to ensure that such information is not
disclosed to any other employee or any other person (other than in
accordance with requirements of the company in relation to which
the position is held -e.g. the professional advisers of that
company/entity). Employees holding such positions must also
ensure that they do not disclose to other employees any information
about or acquired from that company and also to that company any
information relating to Barings clients and their portfolios.

IMPORTANT INFORMATION
This document is issued by Baring Asset Management Limited,
authorised and regulated by the Financial Conduct Authority.

April 2016

Baring Asset Management Limited


155 Bishopsgate
London
EC2M 2XY

Tel: +44 (0)20 7628 6000


Fax: +44 (0)20 7638 7928

www.barings.com

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