Our compliance policy
Our compliance and risk culture underlies our clients’ trust and our excellence in relationship banking
Indosuez has internal rules that strictly follow the legal and regulatory requirements applicable to banking and financial activities.
This ensures we retain our stakeholders’ trust (clients, employees, investors, supervisory authorities, suppliers, etc.).
In an increasingly complex environment with ever tougher regulatory standards, banks have been obliged to raise their KYC (know your customer) standards in recent years. The obligation to ensure that client information is accurate means banks know their clients better, enabling them to serve and protect them better.
To make our compliance approach easier to understand, we have broken it down into five parts:
- Compliance – highstandard principles
- Compliance – ready to listen
- Commitments specific to our asset management subsidiary, CA Indosuez Gestion
- Our antimoney laundering, counter terrorist financing, anti-fraud and anti-bribery policies
- Our contribution to the international exchange of tax information and the fight against tax avoidance.
Code of Conduct
Compliance – high-standard principles: our Code of Conduct
The Code of Conduct is intended to guide all of our actions and decisions and our behaviour on a daily basis. As well as applying all the legal, regulatory and professional rules that govern our activities, the Code of Conduct reflects our commitment to take things further so we can better serve our clients and satisfy all our stakeholders.
Ready to Listen
Compliance – ready to listen
Compliance, listening to you
1. Making a complaint
If you have any problems regarding payment transactions, you can contact your usual Wealth Manager or use any other means of complaint set out in your contracts.
If you have a complaint, please contact our Client Complaints department by writing to CA Indosuez Wealth (France) – Service Réclamations Clientèle - 17, rue du Docteur Lancereaux - 75008 Paris.
We will acknowledge receipt of your complaint within 10 days and will provide a response within 60 days (unless special circumstances dictate otherwise in which case you will be kept duly informed).
If need be, you can refer your complaint free of charge to:
- either the Ombudsman of the FBF via the website lemediateur.fbf.fr (http://lemediateur.fbf.fr) or by writing to the FBF Ombudsman - CS. 151 – 75422 Paris Cedex 09,
- or the AMF Ombudsman, via an electronic file available on the AMF website (http://www.amf-france.org/Le-mediateur-de-l-AMF/Le-mediateur-mode-d-emploi/Modes-de-saisine.html) or by writing to the AMF Ombudsman – 17, place de la Bourse – 75082 Paris Cedex 02.
The FBF mediation charter is available here.
2. Protecting your personal data and others’ data (GDPR)
Because your personal data are invaluable, Indosuez has a specific structure and set-up in place to ensure data confidentiality and security and control the use made of your data (oversight of activities that process personal data, management of data storage, responses to data subjects’ requests to exercise their rights, etc.).
3. Protecting you on the financial markets
The financial markets offer many investment opportunities and potential returns, but at the same time they expose investors to a wide variety of risks, which must be clearly indicated to you to ensure they match your risk appetite.
In complex financial markets, Indosuez’s professionals use all their expertise to provide you with appropriate advice.
4. Helping you make the right investments
By your side, we will assess your financial expertise based on your knowledge and experience of financial products, your financial position and your investment goals.
We will first ensure that all our investment advice and recommendations are fully suited to your risk profile.
Before making any investments, our professionals will provide you with suitable information about the financial products and their inherent risks to ensure you fully understand the transactions you perform.
5. Informing you about our conflict of interest management policy
A conflict of interest may arise in several situations in the pursuit of banking or financial activities. In general, a conflict may arise when a situation could be detrimental to a client’s interests.
There are three main types of conflicts of interest:
- conflicts of interest between one client and another client;
- conflicts of interest between the Bank (or its Group) and its clients;
- conflicts of interest between the Bank’s employees and the Bank or its clients.
Indosuez follows the principle that clients’ interests come first and it has adequate internal controls in place, including a periodic review of all activities and individual transactions to identify any situations that could give rise to a conflict of interest.
It also has whistleblowing procedures regarding potential or actual conflicts of interest.
Indosuez records the types of services or activities where a conflict of interest with a significant risk of harming the interests of one or more of its clients has arisen or could arise.
6. Understanding our best execution policy
As a client of Indosuez, you may require investment services for your financial instruments.
To ensure that our Bank always provides the best possible service for its customers, Indosuez undertakes to execute all orders in the manner set out in the best execution policy below.
7. How we apply MiFID II
The second Markets in Financial Instruments Directive (MiFID II) took effect on 3 January 2018. It significantly enhances investor protection, the organisation of financial markets and market integrity.
MiFID II aims to provide all end clients with more transparency, meaning that all investment firms must ensure they take sufficient measures to obtain the best possible results for their clients.
When providing investment and/or related services and when executing transactions, Indosuez will treat all clients in line with their category. MiFID II imposes different levels of protection depending on the client category. For example, a retail client will receive more protection than a professional client.
Clients are assigned a given category in accordance with regulations and based on information provided by the client.
Clients can ask to be assigned a different category. Changing to a different category can reduce the protection given to the client (when “opting up”), or afford them more protection (“opting down”). Before asking to change to a different category, clients are advised to consult the level of protection attached to each category, as explained in the information document on client categorisation, and to contact their Wealth Manager.
Assessing client knowledge and providing adequate information
Banks must assess their clients’ knowledge and experience of financial products, their financial position and their investment objectives. For example, if the bank provides a client with investment advice, it must ensure that the products it recommends are suitable for the client’s profile and category.
Financial institutions must also provide clients with appropriate information on the financial products and their risks before any transactions are performed. For retail clients, this information can be a Key Information Document (KID), as provided for in the PRIIPs regulation.
Each year, we will inform clients of the five main execution platforms used to execute client orders and the quality of execution obtained.
To view our report for 2018, please click here.
We inform you that in its relations with third parties, our bank may pay or receive remuneration or fees and may issue or receive non-monetary benefits in respect of the provision of investment services. We undertake to inform you of all such remuneration paid or received and the calculation method used and to provide the information required by applicable regulations in respect of the previous year.
To view the amounts paid by our bank to third parties in relation to the provision of investment services, please see the following document.
To view the amounts paid to our bank by third parties in relation to the provision of investment services, please see the following document.
We ensure that such remuneration improves the quality of services we provide and we undertake to act honestly, fairly and professionally in your best interests at all times.
With regard to our insurance intermediation activity more specifically, we work on a commission basis, i.e. with fees included in the insurance premium. If you sign an Advisory Agreement, we will also receive fees, i.e. remuneration paid directly by the investor/member based on the calculation method set out in the Advisory Agreement.
For further information about the costs and fees mentioned above, please contact the Bank’s Compliance department (17, rue du Dr Lancereaux - 75008 Paris).
8. MAD/MAR requirements linked to investment recommendations (EU Delegated Regulation No. 2016/958 of 9 March 2016)
Valuation and method
Investment recommendations are produced using a top-down approach to the main asset classes and regions while analysing central bank policies.
For equities, the analysis does not observe any specific/reported investment styles such as value, growth or momentum. On the contrary, it blends investment styles by focusing more specifically on the market capitalisation and daily liquidity of the underlying securities. Recommendations are based on three factors: an investment case, i.e. the reason why the company is selected from a qualitative and quantitative perspective (brand, management, market share, etc.); a quantitative valuation model essentially using DCF analysis and EPS/EBITDA projections (data provided by approved brokers and Bloomberg); and two risk measures analysed using our in-house ratings methodology: solvency and volatility, to assess the company’s health and overall solidity.
For bonds, fundamental analysis looks at the company’s financial strength and financial ratios such as debt levels and the interest coverage ratio; the stability of its activity and its behaviour across the entire business cycle; the characteristics of the company’s market and business sector; the credibility of management and forecasts; and the company’s financial policy. This allows us to award the company a negative, neutral or positive credit rating. While it is crucial to know the issuer, it is also important to examine the features of the bond in question, i.e. its credit category (senior, subordinate, hybrid, etc.); its valuation in relation to its peers (duration / sector / country / rating); its valuation in the issuer’s yield curve; historic and current spreads; and special features such as redemption options, fixed or floating coupons or step-up clauses. By combining these details with the fundamental analysis and the Investment Committee’s opinion, we obtain a Buy/Sell/Neutral recommendation for a particular bond.
All investments involve risk, particularly in terms of fluctuations in value and yield. If an investment is denominated in a currency other than your base currency, exchange rate fluctuations may have a negative impact on its value, price, or income.
Our investment recommendations may refer to investments that involve specific risks. You should seek the advice of your usual adviser before taking investment decisions based on our investment recommendations or to obtain any necessary explanations of its contents.
The price and/or value of income from any security or financial instrument may be positively or negatively influenced by fluctuations in interest rates and spot and forward exchange rates, economic indicators, the financial position of the issuer or the reference issuer, etc. By buying securities or financial instruments, you may incur a loss that may in some cases exceed the nominal value due to fluctuations in market prices, other financial indices, etc.
Structured securities are complex instruments that generally involve a high level of risk and are intended exclusively for sophisticated investors who are able to understand and assume the risks involved. The market value of any structured security may be affected by changes in economic, financial, and political factors (including but not limited to interest rates and spot and forward exchange rates), the remaining time to maturity, market conditions, volatility, and the credit quality of an issuer or a reference issuer. Investors who are interested in buying a structured product should perform their own analysis of the product and consult their usual advisers about the risks associated with such a purchase.
Certain investments potentially mentioned in this publication, namely derivatives such as options, may present a high level of volatility. High-volatility investments may experience sudden, sharp drops in their value, causing losses when the investment is realised. These losses may reach or even exceed the level of the initial investment. In such circumstances, you may be required to make a margin call payment to cover potential losses. Some investments may be difficult to sell or realise, and it may be difficult for you to obtain reliable information about the value or the risks to which such an investment is exposed. Investors who are interested in buying such products should perform their own analysis of the risks associated with such a purchase and consult their usual advisers.
Financial market risks
Past financial market performance and scenarios are neither a guarantee nor an estimate of future performance. The price and value of the mentioned investments and any income generated by them could fall, rise, or fluctuate. The investments may be traded on a public market or exclusively on a small secondary market. When a secondary market exists, it is impossible to predict the prices at which the investments will trade on that market or to know in advance whether that market will be liquid or illiquid.
When this publication discusses emerging markets, you should be aware that there are uncertainties and risks associated with investments and transactions in various types of investments offered by or related to corporate issuers and debtors that are based in or primarily operate in emerging markets. Investments associated with emerging countries may be considered speculative, and their prices are often much more volatile than those observed in the most developed countries. Investments in emerging markets should be made only by sophisticated investors or experienced professionals who are familiar with the markets in question, are able to examine and assess the various risks associated with these investments, and have the financial resources to assume the risk of a substantial loss associated with these investments. It is your responsibility to manage the risks of investing in emerging markets as well as the allocation of assets in your portfolio. You should contact your usual adviser for explanations of the various risks and factors to be considered when investing in emerging market financial instruments.
Hedge funds are not subject to the numerous investor protection rules applicable to regulated mutual funds, and hedge fund managers are largely non-authorised. Hedge funds are not limited to a specific investment discipline or trading strategy and seek to generate gains in all kinds of markets through the use of leverage, derivatives, and complex speculative investment strategies likely to increase the risk of loss. Commodity transactions involve a high level of risk and may not be appropriate for many investors. The extent of losses due to market movements may be significant or even result in a total loss of the invested amount. Real estate investors are exposed to liquidity, currency, and other risks, including cyclical risk, rental risk, and local market risk in addition to environmental risk and risks related to changes in the legal environment.
Interest rate and credit risks
The value of a bond depends on the credit quality of the Issuer and/or the Guarantor (where applicable), which may vary during the life of the bond. If the bond’s Issuer and/or Guarantor defaults, the bond or any resulting income will not be guaranteed, and it is possible that you will not be able to recover the amount originally invested.
Conflict of Interest
CA Indosuez Wealth (France) as well as its shareholders, entities, subsidiaries, and more generally companies in the Crédit Agricole SA group (the “Group”) and respectively their corporate officers, senior management, or employees may, on a personal basis or in the name and on behalf of third parties, undertake transactions in the financial instruments described in this publication, hold other financial instruments in respect of the issuer or the guarantor of those financial instruments, or may provide or seek to provide (or have provided within the last twelve months) securities services, financial services, or any other type of service for or from such parties.
Where CA Indosuez Wealth (France) and/or a Group entity acts as an investment adviser and/or manager, administrator, distributor, or placement agent for certain products or services mentioned in this publication or carries out other services in which CA Indosuez Wealth (France) or the Group has or is likely to have a direct or indirect interest, the CA Indosuez Wealth (France) shall give priority to the investor’s interest.
CA Indosuez Gestion
Commitments specific to our asset management subsidiary, CA Indosuez Gestion
CA Indosuez Gestion is a subsidiary of CA Indosuez Wealth (France). It is a limited company (société anonyme) authorised as a portfolio management company by the AMF under number GP 98025. Its share capital totals €11,037,435. It is registered in the Paris Trade and Companies Register under number 392 945 382 and its registered office is at 17, rue du Docteur Lancereaux - 75008 Paris.
1. Intermediary selection and execution policy
CA Indosuez Gestion has chosen to use the services of CA Indosuez Wealth (France) for the execution of all its orders arising from investment decisions.
To this end, CA Indosuez Gestion and its partner CA Indosuez Wealth (France) undertake to take all appropriate measures when executing client orders to obtain the best possible results, in accordance with the best selection and best execution policy available here.
2. Integration of Environmental, Social and Governance (ESG) criteria in the investment policy
Socially responsible investment (SRI) seeks to incorporate sustainable development criteria in fund investments.
It is intended for investors that seek to combine financial performance with the protection of future generations. Socially responsible investment fund strategies factor in both financial and non-financial criteria.
Socially responsible investment factors in three types of criteria?–?Environmental, Social and Governance?–?commonly referred to as ESG criteria.
The Transparency Code of the French Asset Management Association (AFG) defines these criteria as follows:
- Environmental: the direct or indirect impact of an issuer’s activity on the environment.
- Social: the direct or indirect impact of an issuer’s activity on stakeholders based on universal values (human rights, international labour standards, anti-corruption).
- Governance: the policies, regulations, laws and institutions that influence how a given company is managed, administered and controlled. It also encompasses the relations between the many stakeholders and the objectives that govern the company. These key players notably include the shareholders, executive managers, and members of the board of directors.
In order to obtain the SRI label, funds must meet the ESG criteria. The method of selection for securities is defined in the prospectus.
Non-financial rating agencies can assign the SRI label to funds to certify that the management company or SICAV has met the relevant criteria.
ESG and CA Indosuez Gestion
In accordance with Articles L. 533-22-1 and D. 533-16-1 of the French Monetary and Financial Code, investors are informed that CA Indosuez Gestion does not automatically and simultaneously take ESG criteria into account in its investment process. However, ESG criteria are not ignored and they are among the many criteria analysed by the investment team when selecting securities.
CA Indosuez Gestion applies Governance criteria when exercising voting rights on the shares it holds on behalf of the funds it manages in shareholder meetings. Accordingly, CA Indosuez Gestion exercises its voting rights for a universe of listed European stocks. The policy it follows in this area is based on the principles of responsibility, independence and transparency.
CA Indosuez Gestion manages one investment fund with assets under management of over €500 million: Indosuez Allocation Mandat. This fund partially invests in other funds. These other funds may take ESG criteria and climate issues into account in their investment policy. However, these criteria are not systematically applied in the selection of funds that comprise the investment fund insofar as not all asset classes and geographical areas have an adequate offering of ESG funds. The fund is also invested in pure index strategies (via futures or ETFs) that do not take into account ESG criteria.
3. Remuneration policy
CA Indosuez Gestion follows a remuneration policy that complies with the provisions of European Directives 2011/61/EU of 8 June 2011 known as the AIFM Directive and 2014/91/EU of 23 July 2014 known as the UCITS V Directive. This policy is available below.
4. Shareholder engagement disclosure
CA Indosuez Gestion has a shareholder engagement policy to inform fund unitholders of how it incorporates its role as shareholder in its investment strategy.
To consult the policy on exercising voting rights at shareholder meetings in respect of the shares held in funds managed by CA Indosuez Gestion, please click here.
CA Indosuez Gestion will report to its fund unitholders on its effective implementation of the voting rights policy over the previous year on an annual basis.
To read the report on how it exercised voting rights in 2018, click here.
Our anti-money laundering, counter terrorist financing, anti-fraud and anti-bribery policies
In accordance with legal and regulatory requirements and Crédit Agricole S.A. group’s policy, Indosuez has a specific system in place to prevent money laundering, terrorist financing and bribery and comply with embargos and asset freezes. This system applies in all entities.
1. Our international obligations
Our international obligations are:
- the 40 recommendations of the Financial Action Task Force (FATF) issued in February 1990 and revised in February 2012 intended to prevent the banking system from being used to launder money of criminal origin,
- Directive (EU) 2015/849 of the European Parliament and of the Council of 20 May 2015 on the prevention of the use of the financial system for the purposes of money laundering or terrorist financing, amending Regulation (EU) No 648/2012 of the European Parliament and of the Council, and repealing Directive 2005/60/EC of the European Parliament and of the Council and Commission Directive 2006/70/EC (Text with EEA relevance). This European Union Directive aims to harmonise the approach taken by Member States. It was supplemented by the new Directive 2018/843 of 30 May 2018 (the fifth Anti-Money Laundering Directive), which is currently being enacted by the Member States.
2. Our national obligations
National obligations in France mainly arise from Ministerial Order no. 2016-1635 of 1 December 2016, which strengthened French anti-money laundering and counter terrorist financing rules by transposing the principles of the aforementioned Directives into French law. These obligations are set out in the Monetary and Financial Code, Book VI entitled “Obligations relating to the prevention of money laundering and terrorist financing, lotteries, prohibited betting and gambling, tax avoidance and tax fraud” and they impose:
- the adoption and continued updating of a risk-based approach,
- due diligence when onboarding new clients (identifying clients) and throughout the relationship, in particular for unusually complex transactions or those with no apparent economic justification or legal purpose,
- the documentation and archiving of information,
- abstention from relationships or transactions where the information obtained does not confirm their legitimacy,
- the reporting of suspicious transactions and the systematic reporting of certain transactions.
In France, money laundering is a criminal offence and applies to the proceeds of any crime or offence.
3. Our commitments
A Group-wide Directive sets out the organisation and obligations of the Financial Security business line, which is responsible for managing risks relating to money laundering, terrorist financing, bribery, embargos and asset freezes.
This business line is an integral part of the Group’s compliance control system.
It has set up procedures covering:
- know your customer and their beneficial owners: and more specifically,
- identifying the client and confirming their identity,
- identifying the beneficial owner and taking reasonable measures to verify their identity,
- assessing and, as applicable, collecting information on the purpose and envisaged nature of the business relationship,
- assessing the business relationship on a continuous basis by keeping all documents, data and information up to date.
- the monitoring of transaction flows in line with rules governing embargos (e.g. Fircosoft), asset freezes and the identification of the originator of fund transfers (FATF recommendation 16),
- the reporting of suspicious transactions to the Financial Intelligence Unit,
- training for all relevant members of staff. Crédit Agricole CIB actively contributed to the preparation of the Banking Sector AML-CFT e-learning course under the auspices of the CFPB (a vocational training school for the banking industry) and with the support of the FBF (French Banking Federation),
- verifications that the procedures and measures in place to meet the obligations set out above are duly respected,
- the documentation, archiving and storing of files and the keeping of audit trails.
Crédit Agricole S.A. group has set principles for the sharing of information to help combat money laundering, bribery and terrorist financing.
Each group unit has a Head of Financial Security responsible for implementing the Group’s rules and local obligations. Our commitments are partly set out in the following documents:
4. Fighting fraud and bribery
Indosuez takes full steps to combat internal and external fraud and bribery. All members of staff must behave in accordance with French anti-bribery laws (Sapin II Act) and the laws applicable in all our countries of operation. We apply a zero-tolerance policy in this area, for example regarding facilitating payments.
Our contribution to the international exchange of tax information and the fight against tax avoidance
Indosuez fully observes fiscal regulations, in particular:
FATCA (Foreign Account Tax Compliance Act) is a US regulation aimed at combating tax avoidance by US citizens and residents who hold financial assets outside the United States. The US tax authority (the Internal Revenue Service or IRS) has set up a framework to collect information relating to foreign income and assets held by US taxpayers outside the United States from non-US financial institutions on a yearly basis.
The regulation requires financial institutions to apply procedures to identify US Persons. If they fail to do so, they face a 30% withholding tax on all US-source income received on their own account or on behalf of their clients.
To facilitate the implementation of FATCA, a large number of countries, including France, have negotiated intergovernmental agreements with the United States, whereby they undertake to transpose the tax reporting requirements of FATCA into their national laws.
FATCA ID: CEQ4EV.00066
Registration date: 23/04/2014
2. Information about the Automatic Exchange of Information (AEOI)
In July 2014, the OECD introduced a new standard for the automatic exchange of fiscal information between countries – the Common Reporting Standard (CRS) – in a bid to reduce tax avoidance. Around sixty countries including France undertook to exchange tax information under this new standard from 2017, and thirty others signed up from 2018.
At the same time, on 9 December 2014, the Council of the European Union adopted a revised Directive on administrative cooperation (Directive 2014/107/EU, amending Directive 2011/16/EU). The new Directive, which is based on the OECD standard, extends the scope of the mandatory automatic exchange of tax information between European Union Member States.
The standard requires financial institutions (banks, depositories, life insurance companies, etc.) operating in participating countries to identify fiscal resident account holders in countries with which an information exchange agreement has been signed, and to transmit the associated information (account holder’s contact details, account balances, income, revenues from securities, etc.) to their tax authority each year. The tax authority will pass the information on to the relevant authorities.