CUSTODY

Conflict of Interest Policy

1. Purpose and Scope

This policy has been prepared in order to express the commitment of Paribu Kripto Varlık Saklama Kuruluşu A.Ş. (hereinafter referred to as "Paribu Custody") to the principles of integrity, transparency, customer focus, and compliance with applicable laws in its activities.

This policy sets forth the procedures and principles regarding the prevention, identification, management, and transparent disclosure of conflicts of interest set out below:

  • between Paribu Custody and its customers,
  • between customers,
  • between Paribu employees and customers,
  • between Paribu Custody and its employees,

and any conflicts of interest that have arisen or may arise are within the scope of this policy. Within this scope, in order to prevent conflicts of interest, the necessary organizational structure has been established within Paribu Custody, duties and responsibilities have been defined, and administrative controls and audit mechanisms have been implemented. In cases where a conflict of interest cannot be fully prevented, it is essential that customers are meaningfully informed prior to the execution of the relevant activity. The Policy covers all managers, employees, shareholders, and subsidiaries of Paribu Custody, as well as persons directly or indirectly connected with them.

2. Basis

This policy has been prepared within the framework of the Capital Markets Law No. 6362, Articles 35/A and 35/C added to the aforementioned Law by Law No. 7518 dated 02.07.2024, the communiqués numbered III-35/B.1, III-35/B.2, and VII-128.10 issued by the CMB, and the employment contracts, disciplinary regulation, information security policy, code of ethics, and other internal regulations of Paribu Custody.

3. Definition of Conflict of Interest

A conflict of interest is a situation in which the interests of Paribu Custody, its employees, managers, or related parties conflict with the interests of customers, and such situation may jeopardize the provision of impartial and honest services and may result in outcomes to the detriment or benefit of any party. This situation also includes conflicts of interest that may arise between one customer and another customer.

4. Situations That May Give Rise to a Conflict of Interest

Situations that may give rise to a conflict of interest within Paribu Custody may vary depending on the specifics of the case; however, at a minimum, the following situations are considered within this scope:

  • Paribu Custody or its related parties obtaining a financial gain or avoiding a financial loss at the expense of a customer,
  • Paribu Custody or its related parties deriving a benefit through the relationship established with a customer where the customer has no corresponding interest,
  • A customer or a group of customers obtaining an advantage as a result of being preferred over others,
  • Obtaining non-standard fees, commissions, or benefits from third parties due to transactions related to a customer,

In addition, the following individual circumstances are also of a nature that may give rise to a conflict of interest:

  • Family and Close Relationships: Family members or close associates of employees holding positions with decision-making authority in organizations that have a business relationship with Paribu Custody or are in a competing position, or being in a financial/benefit relationship with such organizations,
  • External Activities: Paribu Custody employees working for competing companies, providing consultancy, or having a benefit relationship without the knowledge of the institution,
  • Gifts and Hospitality: Employees accepting gifts, discounts, or other advantages of a value that may create a conflict of interest from existing or potential customers, suppliers, or business partners,
  • Personal Relationships: An employee being in a personal relationship with a customer or business partner, and such situation having the potential to influence, or appear to influence, decision-making processes.

5. Measures for the Prevention of Conflicts of Interest

Within Paribu Custody, the following structural, technical, and organizational measures are implemented in order to prevent and manage conflicts of interest:

  • Restrictions on Access to Inside Information: Information barriers, access controls, and organizational segregation measures are implemented for employees who have access to inside information. The transaction records of these employees are logged and regularly audited.
  • Information Security and Confidentiality: Customer data is processed solely for the purpose of service provision; such data may not be disclosed outside the institution unless required for business purposes and may only be disclosed to competent authorities within the framework of the applicable legislation.
  • Remuneration and Bonus Systems: Performance-based remuneration systems may not be structured in a manner that could result in outcomes to the detriment of customers. Remuneration policies are designed in a manner that does not encourage conflicts of interest.
  • Restrictions on Gifts and Incentives: Paribu Custody employees may not accept gifts or incentives of a value that could influence decision-making processes. Approval of the Internal Control Unit is required for gifts exceeding a specified monetary threshold.

6. Situations Contrary to the Policy

In the event that any situation, whether covered by this policy or not, that carries a risk of conflict of interest is identified, the following processes shall be implemented:

  • Employees shall promptly report any suspicions and concerns regarding situations that may give rise to a potential conflict of interest to the Paribu Internal Control Unit.
  • Customers may submit their concerns and complaints regarding conflicts of interest through Paribu Custody communication channels.
  • The relevant notifications shall be reviewed by the Internal Control Unit, and where deemed necessary, coordination shall be ensured with the Compliance and Legal departments.

In the event that a situation giving rise to a conflict of interest is identified:

  • If customer loss has occurred, compensation for the loss shall be provided.
  • Action shall be taken against the employee who caused the relevant situation within the framework of the Disciplinary Regulation.

The monitoring, identification, and tracking of risks related to conflicts of interest are the responsibility of the Paribu Custody Internal Control Unit.

The Paribu Board of Directors is ultimately responsible for the implementation of this policy and for ensuring its adequacy.

7. Record-Keeping and Reporting

All conflict of interest suspicions and identifications reported to the Paribu Custody Internal Control Unit, as well as the measures taken in this context, shall be recorded in a chronological and auditable manner together with the date, summary of the event, assessment as to whether a conflict of interest exists, and the controls and measures implemented. These records shall be reported to the Paribu Board of Directors on a quarterly basis. Within the scope of reporting, analyses and evaluations regarding the type, frequency, scope of impact, and actions taken in relation to conflicts of interest are included. All records shall be securely retained for the minimum retention period prescribed by the applicable legislation and shall be kept readily available for submission without delay upon request by the Capital Markets Board.

8. Audit, Monitoring, and Implementation Principles

All Paribu Custody employees are obliged, in the course of performing their duties and responsibilities, to promptly and in writing report any situations that may give rise to a conflict of interest or may be perceived as such to the Paribu Custody Internal Control Unit.

Employees shall act in full cooperation with the Internal Control and other relevant departments in the processes of preventing and resolving existing or potential conflicts of interest. Following the notifications, whether a conflict of interest exists shall be assessed by the Paribu Custody Internal Control Unit. Where deemed necessary, information shall be presented to the Board of Directors, and actions aimed at eliminating the conflict of interest shall be determined and implemented. Measures taken, actions implemented, and relevant assessments regarding situations in which a conflict of interest has been identified shall be recorded and retained in a manner that allows for future reference. Sanctions may be imposed on employees who act in violation of the provisions of the Policy in accordance with the Paribu Custody Disciplinary Regulation; depending on the severity of the breach, necessary actions, including termination of the employment contract, may be initiated.

9. Review of the Policy

This policy shall be periodically reviewed by the Internal Control Unit in line with the applicable legislation, industry practices, and the organizational needs of the company. Where necessary, it shall be updated and submitted for the approval of the Board of Directors. Updated versions of the policy shall be communicated to all employees.