FantasticSearch

Management of potential conflicts of interest arising from employees

1. ESG rating providers shall ensure that their employees and any other natural persons whose services are placed at their disposal or under their control and who are directly involved in the provision of an ESG rating:

(a) have the skills that are necessary for performing their tasks and duties and are subject to effective management and supervision;

(b) are not subject to undue influence or conflicts of interest;

(c) are not compensated and their performance is not evaluated in such a manner as to create conflicts of interest or otherwise impinge upon the integrity of the ESG rating determination process;

(d) do not have any interests or business connections that compromise the activities of the ESG rating provider;

(e) are prohibited from contributing to an ESG rating determination by way of engaging in bids, offers and trades on a personal basis or on behalf of market participants, except where such contribution is expressly required as part of the ESG rating methodology and is subject to specific rules laid down therein; and (f) are subject to effective procedures to control the exchange of information with other employees involved in activities that might create a risk of conflicts of interest or with third parties, where that information might affect the ESG rating.

2. ESG rating providers shall establish specific internal control procedures to ensure the integrity and reliability of the employee or person determining the ESG rating, including internal approval by management before the distribution of the ESG rating.