1. Introduction
1.1 About OFZA
1.1.1 OFZA Fintech Virtual Asset Exchange Services LLC (the “Firm”, “the Company”, “OFZA”) is licensed and regulated by the Dubai Virtual Assets Regulatory Authority (VARA) as a Virtual Asset Service Provider (VASP Reference: VL/24/12/002) for the following Virtual Asset Activities:
(a) Exchange Services,
(b) Broker-Dealer Services,
(c) VA Management and Investment Services.
1.1.2 OFZA has its registered office at
Office 21C13, i-Rise Tower, Al Thanyah First, Al Barsha Heights, Dubai, United Arab Emirates.
1.2 Scope
1.2.1 This policy is prepared in compliance with VARA Company Rulebook that outlines OFZA commitment to identifying, avoiding, and managing conflicts of interest that may arise between the Group, OFZA, the Board, employees, Clients and Investors.
1.2.2 OFZA shall use all reasonable efforts to avoid conflicts of interest and shall implement suitable measures and controls to manage any potential and actual conflicts of interest.
1.2.3 In the event that OFZA cannot avoid conflicts of interest after using all reasonable efforts, it shall ensure that such conflicts of interest are disclosed to its affected clients, who shall be treated fairly by OFZA.
1.2.4 A Conflict of Interest exists where OFZA, any person who acts for it, or any of its associates:
(a) the Firm or employees or board members may make a financial gain, or avoid a financial loss, at the expense of client(s);
• the Firm and/or employees or board members may have an interest in the outcome of service(s) provided to client(s) and/or of transaction(s) carried out on behalf of client(s), which may conflict with client(s)’ interest(s);
(b) the Firm and/or employees or board members have an interest to favour the interest of one client or a group of clients over the interest(s) of a client, or a group of clients;
(c) has an interest in the outcome of a service provided to a client or in the outcome of a transaction carried out on the Platform for a Client, which is distinct from that of the Client.
(d) has a financial or another incentive to favor the interest of one Client over the interests of another Client.
(e) carries on the same business as the Client; or
(f) receives or will receive from a third party an inducement in relation to a service provided to a client, in the form of monies, goods, or services, other than the standard commission or fee for that service.
(g) Material Interest for Board members refer to any financial or non-financial interest that might influence, or appear to influence, the Board member's decision-making, judgment, or conduct related to OFZA's operations.
1.3 Parties Involved in Conflicts of Interest
1.3.1 A conflict can arise involving the Company, its Employees, or its clients. More specifically, a Conflict of Interest may arise between the following parties:
(a) the Client and the Company.
(b) two Clients of the Company.
(c) the Company and its Employee(s).
(d) a Client of the Company and Employee(s) of the Company.
(e) different departments within the Company.
(f) Potential conflicts arising from relationships with external partners, vendors, or third parties will also fall under this policy, ensuring comprehensive coverage.
1.4 Policy Review
1.4.1 This policy will undergo a comprehensive review annually, or ad hoc basis at any trigger event changes to VARA regulations, internal policy and considering the evolving nature of the crypto industry, to ensure its continued relevance and effectiveness.
2. CONFLICT MANAGEMENT AND REPORTING
2.1 Managing Conflicts
2.1.1 If OFZA, a member of the Board or any of its employees has an interest that may reasonably impair its objectivity, in a transaction with or for a client or a relationship which gives rise to an actual or potential conflicts of interest in relation to the transaction, the OFZA will—
(a) promptly disclose the nature of such conflict to its affected client; and
(b) to the extent that the affected client’s interests can be sufficiently protected, manage and minimise such conflict by adopting appropriate measures to ensure fair treatment to its affected client, including establishing and maintaining information barriers to separate employee into different teams.
2.1.2 In any case conflict of interest arise, OFZA will take all reasonable steps to ensure so far as possible that such conflicts are identified and then prevented or managed in such a way that the interests of any Client are not adversely affected.
2.1.3 If a conflict or potential Conflict of Interest exists, the Company will, where possible, manage that interest by:
(a) segregating control of responsibility between Employees within the Company.
(b) setting out arrangements to restrict information flow between the Company’s different business activities. These arrangements, including information barriers, are established and maintained to ensure impartiality and the fair treatment of all affected clients.
(c) written disclosure of the conflict in its Client Agreement or in relation to a specific transaction; the disclosure must include sufficient detail, taking into account the nature of the Client, to enable that Client to take an informed decision with respect to the service in the context of which the Conflict of Interest arises; or
(d) if none of the above is likely to be effective, by declining to act for one or more of the Clients concerned.
2.1.4 OFZA has established internal controls to prevent conflicts of interest between senior management, employees, and clients, ensuring that all decisions are made impartially and in the best interests of clients. OFZA will ensure no retaliation happens for any disclosures. Conflict of Interest arises out of employee hiring will be effectively managed by conducting know your employee screening and effective disclosures by employees about their relatives within OFZA.
2.2 Reporting A Conflict of Interest
2.2.1 Employees and stakeholders must report any perceived conflicts of interest by emailing at
[email protected] , a dedicated, confidential channel established by OFZA, ensuring transparency and prompt action. The Compliance Officer (CO) will take reasonable measures to ensures that conflicts of interest are effectively investigated, mitigated and reported to the Board of Directors.
2.3 Investigation Process
2.3.1 Identification: Upon identification of a potential material conflict of interest, the concerned personnel or department shall immediately report it to the Compliance Officer or the designated authority within OFZA.
2.3.2 Assessment: The Compliance Officer, in consultation with Risk Officer and other relevant departments, shall assess the nature, extent, and implications of the identified conflict. This assessment will determine whether the conflict is actual, potential, or perceived and evaluate its materiality.
2.3.3 Documentation: All identified conflicts of interest, along with their assessments, shall be documented in a Conflict-of-Interest Register maintained by the Compliance Officer. This register will detail the nature of the conflict, parties involved, and any decisions or actions taken in relation to the conflict.
2.3.4 Mitigation Measures: Depending on the assessment, the Compliance Officer shall recommend appropriate measures to mitigate or eliminate the conflict. These measures may include:
(a) Recusal of the conflicted individual from decision-making processes related to the conflict.
(b) Disclosure of the conflict to relevant stakeholders.
(c) Restructuring of roles or responsibilities to avoid the conflict.
(d) Seeking external advice or consultation to address the conflict.
2.3.5 Review and Monitoring: Once mitigation measures are implemented, the Compliance Officer shall periodically review the situation to ensure that the conflict remains adequately addressed. If the nature or extent of the conflict changes, further measures may be implemented.
2.4 Client Communication
2.4.1 Initial Notification: Upon identification of a conflict of interest that may materially affect a client, OFZA shall promptly notify the affected client(s) in writing, detailing the nature of the conflict and the steps being taken to address it.
2.4.2 Resolution Updates: Once the conflict has been assessed and appropriate mitigation or resolution measures have been determined, OFZA shall provide a comprehensive update to the affected client(s). This update will include:
(a) A summary of the measures taken or proposed to address the conflict.
(b) The expected timeline for implementing these measures.
(c) Any potential implications or actions required from the client's side.
2.4.3 Final Resolution Communication: Upon the successful resolution or mitigation of the conflict, OFZA shall communicate the outcome to the affected client(s), ensuring they are fully informed of the final status and any subsequent steps or changes that might be relevant to them.
2.4.4 Transparency Commitment: OFZA is committed to maintaining transparency with its clients. All communications regarding conflicts of interest will be clear, concise, and timely, ensuring that clients remain informed and confident in OFZA's commitment to ethical practices.
2.4.5 OFZA shall ensure that any disclosed conflict does not adversely affect the fairness of treatment extended to any affected client, in accordance with the VARA Rulebook.
3. GOVERNANCE & OVERSIGHT
3.1 Board Members’ Material Interests and Participation in Meetings
3.1.1 When a member of the Board discloses to the Board that they have a material interest in a transaction, the remaining members of the Board present at the Board meeting shall consider whether it is appropriate for that Board member to continue to participate in the Board meeting after reviewing whether the conflict may affect the objectivity of that member and/or their ability to perform their tasks towards the company properly.
3.1.2 If the remaining members of the Board decide that it is not appropriate for that member to participate, they may ask that member to leave the Board meeting. That Board member is not entitled to use the member’s personal influence in issues whether in or outside the meeting. The Board member shall not vote on the decision. The Company Secretary shall record the conflict in the relevant Board minutes, and the Compliance Officer will record in the conflict-of-interest register.
3.2 Training
3.2.1 All Board members and Employees will have adequate training and access to additional training (where necessary) that forms an essential part of ensuring that risk is appropriately managed.
3.2.2 Moreover, awareness of and adherence to applicable law are equally important. Training on conflict of interest will be conducted annually or ad hoc basis at any event that require training to all employees, covering identification, reporting, and mitigation. The effectiveness of training will be assessed through periodic evaluations.
3.2.3 Compliance Officer may issue periodic circulars and notifications to all employees to ensure that all employees understand and adheres to avoid any conflict of interest.
3.3. Consequences of Violation of the Policy
3.2.1 Violations of this policy will result in actions ranging from formal warnings to termination, depending on the severity and frequency of the breach.
3.4 Proactive Steps by OFZA
3.4.1 For the purpose of this Policy, the Company maintains:
