Legal and regulatory

All the extra things you should know.

Managed Portfolios

How regulation works

We tell you we are regulated but what does that mean?

Regulation in the UK

You might be bored just by reading that title, but regulation is there for a reason. It’s there to protect the interests of the consumer (that’s you), and to ensure that financial organisations (that’s us) manage your money properly. So the fact that we’re regulated is a good thing, it’s not easy to get regulatory permission, and you have to comply with some really high standards.

Regulation for you breaks down into three areas:

FCA

The Financial Conduct Authority (FCA) aim to make financial markets work well so that consumers get a fair deal. That means they protect consumers, enhance market integrity, and promote competition. Moneyfarm report to the FCA monthly to prove that we’re looking after your investments properly.

For further information visit fca.org.uk

FOS

The Financial Ombudsman Service (FOS) is the UK’s official expert in sorting out problems with financial services. If you have an issue with Moneyfarm, and we hope you don’t, you can complain directly to us, if we don’t respond quickly enough you can report this to the FOS.

For further information visit financial-ombudsman.org.uk

FSCS

The Financial Service Compensation Scheme (FSCS) covers financial organisations regulated in the UK, that includes us. In the event that Moneyfarm becomes insolvent whilst owing you money, you are covered for claims up to the value of £85,000

For further information visit fscs.org.uk

Site terms and conditions

Welcome to our website. If you continue to browse and use this website, you are agreeing to comply with and be bound by the following terms and conditions of use, which together with our privacy policy govern MFM INVESTMENT Limited’s relationship with you in relation to this website. If you disagree with any part of these terms and conditions, please do not use our website.

The term MFM INVESTMENT Limited, ‘Moneyfarm’ or ‘us’ or ‘we’ refers to the owner of the website whose registered office is 90-92 Pentonville Road, London N1 9HS. Our company is registered in the UK and Wales under registration number 9088155. The term ‘you’ refers to the user or viewer of our website.

The use of this website is subject to the following terms of use:

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The content of the pages of this website is for your general information and use only. It is subject to change without notice.

Complaints handling procedure

Definitions and interpretations

The following definitions and interpretations shall be considered in the context of this document:

Client, Customer, You: Means any person holding an account with us.

Complaint: As defined on the FCA Handbook, means any oral or written expression of dissatisfaction, whether justified or not, from or on behalf of a person, about the provision of, or failure to provide, a financial service or a redress determination, which: 1. Alleges that the complainant has suffered (or may suffer) financial loss, material distress or material inconvenience; and 2. Relates to an activity of that respondent, or of any other respondent with whom the company has some connection in marketing or providing financial services or products, which comes under the jurisdiction of the Financial Ombudsman Service.

RTS28-2020

MONEYFARM – TRADING AS MFM INVESTMENT LIMITED – LEI 213800O61IIMGUQNGI04

Annual report on top five brokers and quality of execution

Annual reporting

In accordance with COBS 11.2A.34R(6) (incorporating Article3 (3) of RTS28, MFM Investment Limited (“MFM” or “the Firm”) is required to publish the top five investment firms in terms of trading volumes, where it transmitted or placed client orders for the execution divided per class of financial instruments and information of execution obtained.

Quantitative Report

RTS 28 report for the period to 31 December 2019

Class of Instrument	Exchange Traded Derivatives (ETFs) – Retail Clients
Notification if less than 1 average trade per business day in the previous year	Yes

Top five brokers ranked in terms of trading volumes	Exchange Traded Derivatives (ETFs) – Retail Clients	Portion of orders executed as a percentage of total in that class	Percentage of passive orders	Percentage of aggressive orders	Percentage of directed orders

Conflicts of interest policy

1. INTRODUCTION

We are committed to taking measures to recognise, supervise, examine and resolve conflicts of interest. We recognise that it is not possible to eliminate all sources of conflict of interest; however, safeguarding clients’ welfare remains our primary objective. This policy encompasses the relationships with clients and third party contacts.

2. DEFINITION

We define a conflict of interest as being either:

(a) between us and you as a client; or

(b) between yourself and another client where your interests are materially affected.

ESG Integration Policy

In the context of its investment process, Moneyfarm considers a range of risk and return parameters. The ETFs selected in current Moneyfarm portfolios do not currently have an explicit screening on ESG Ratings or sustainability factors. However, we believe that sustainability factors are an important consideration in multi-asset portfolio construction and risk management. In fact, sustainability factors can potentially impact asset prices in a variety of ways, including changing market conditions, availability of scarce resources, regulatory environment and consumer preferences. They can impact individual companies, specific sectors and geographic regions.For this reason, despite the underlying ETFs not having any explicit ESG screening, for the current portfolios offering, Moneyfarm monitors the ESG Ratingat a portfolio level in order to avoid a high concentration of the investments in ETFs with a low ESG rating or non-rated ETFs.

Moreover, we are currently working on launching an ESG proposition of a set of "socially responsible" ETFs, not only aimed at further decreasing the impact of sustainability risks on its Model Portfolios, but also at contributing positively to sustainable development and achieving sustainable investment objectives by channeling clients’ investments to companies with a lower environmental impact and higher ESG ratings.

For further details, please check our

Order execution policy

WARNING: Any specific instructions from a client may prevent us from taking the steps set out below that we have designed and implemented to obtain the best possible result for a client.

1. TREATING CUSTOMERS FAIRLY

We are dedicated to treating our clients fairly, which includes, amongst other aspects, ensuring we have and follow adequate policies and procedures to achieve Best Execution for our clients.

2. BEST EXECUTION

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When executing orders for clients, we are required by the FCA’s rules relating to best execution, to take all reasonable steps to obtain the best possible result for our clients, taking into account the following execution factors: the (i) price, (ii) costs, (iii) speed, (iv) likelihood of execution and settlement, (v) size, (vi) nature or (vi) any other consideration relevant to the execution of an order.
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For the purposes of delivering best execution for our retail clients in circumstances where there is more than one competing venue to execute an order, in order to assess and compare the results for the client that would be achieved by executing the order on each of the execution venues that is capable of executing that order, our own commissions and costs for executing the order on each of the eligible execution venues will be taken into account. Our obligation to deliver best execution for a retail client where there are competing execution venues is not intended to require us to compare the results that would be achieved for our client with results that might be achieved for the same client by any other firm, on the basis of a different execution policy. Nor are we required to compare the differences between our commissions which are attributable to differences in the nature of the services we provide to clients.

Investments can go down in value as well as up, and you may get back less than you put in. See our full risk disclosure for details.

Requirements under Article 3(3)	MFM’s Response
An explanation of the relative importance the firm gave to the execution factors of price, costs, speed, likelihood of execution or any other consideration including qualitative factors when assessing the quality of execution	MFM regards all execution factors as set out in its order execution policy, however price and the likelihood of execution remain the factors of highest importance by MFM followed by cost and speed of the order covered by the broker.
A description of any close links, conflicts of interest and common ownership with respect to any investment firm used to transmit or place orders.	MFM does not have any close links, conflicts of interest or common ownership with respect to any investment firm used to transmit or place orders.
A description of any specific arrangements with any investment firm regarding payments made or received, discounts, rebates or non-monetary benefits received	We have currently selected a single entity for execution and we may confirm that: (i) this provides the best possible results for our clients on a consistent basis; (ii) we can expect that the selected entity will enable us to obtain results for clients that are at least as good as the results that could reasonably be expected from using alternative entities for execution. Our broker is subject to an ongoing monitoring process, which includes, regular reviews of performance of execution services, and the broker’s ability to trade effectively on our client’s behalf. MFM has entered into a trading agreement with the selected entity, according to which MFM pays: (i) a transaction fee for trading on the trading platform; (ii) a custody fee for the safeguarding and administration of assets. MFM does not receive any payments, discounts, rebates or non-monetary benefits from the selected entity.
An explanation to the factors that led to a change in the list of execution factors.	This is the second report and there are no changes to note in the list of execution venues listed in the firm’s order execution policy.
An explanation of how order execution differs according to client categorisation, where the firm treats categories of clients differently and where it may affect the order execution arrangements.	All MFM clients are treated the same under its order execution policy.
An explanation of whether other criteria were given precedence over immediate price and cost when executing client orders and how these other criteria were instrumental in delivering the best possible result in terms of the total consideration to the client	No other criteria were given precedence when providing retail clients with best execution
An explanation of how the investment firm has used any data or tools relating to the quality of execution, including any data published under Delegated Regulation (EU) 2017/575 [RTS27]	During 2019, MFM has regularly monitored the quality of execution obtained from the investment firm used to place client orders. MFM is satisfied that it had adhered to the requirements set out in its Order Execution Policy in seeking to obtain best execution for its clients by reference to all relevant factors.<br>Each trade is monitored by the Portfolio Managers when placing the trade instruction to ensure that it is executed on the best terms available. It is a prerequisite of the terms of business of the brokers used by MFM that they must provide best execution.
Where applicable, an explanation of how the investment firm has used output of a consolidated tape provider	Not applicable, as there are currently no consolidated tape providers in Europe.

Requirements under Article 3(3)

MFM’s Response

An explanation of the relative importance the firm gave to the execution factors of price, costs, speed, likelihood of execution or any other consideration including qualitative factors when assessing the quality of execution

MFM regards all execution factors as set out in its order execution policy, however price and the likelihood of execution remain the factors of highest importance by MFM followed by cost and speed of the order covered by the broker.

A description of any close links, conflicts of interest and common ownership with respect to any investment firm used to transmit or place orders.

MFM does not have any close links, conflicts of interest or common ownership with respect to any investment firm used to transmit or place orders.

A description of any specific arrangements with any investment firm regarding payments made or received, discounts, rebates or non-monetary benefits received

We have currently selected a single entity for execution and we may confirm that: (i) this provides the best possible results for our clients on a consistent basis; (ii) we can expect that the selected entity will enable us to obtain results for clients that are at least as good as the results that could reasonably be expected from using alternative entities for execution. Our broker is subject to an ongoing monitoring process, which includes, regular reviews of performance of execution services, and the broker’s ability to trade effectively on our client’s behalf. MFM has entered into a trading agreement with the selected entity, according to which MFM pays: (i) a transaction fee for trading on the trading platform; (ii) a custody fee for the safeguarding and administration of assets. MFM does not receive any payments, discounts, rebates or non-monetary benefits from the selected entity.

An explanation to the factors that led to a change in the list of execution factors.

This is the second report and there are no changes to note in the list of execution venues listed in the firm’s order execution policy.

An explanation of how order execution differs according to client categorisation, where the firm treats categories of clients differently and where it may affect the order execution arrangements.

All MFM clients are treated the same under its order execution policy.

An explanation of whether other criteria were given precedence over immediate price and cost when executing client orders and how these other criteria were instrumental in delivering the best possible result in terms of the total consideration to the client

No other criteria were given precedence when providing retail clients with best execution

An explanation of how the investment firm has used any data or tools relating to the quality of execution, including any data published under Delegated Regulation (EU) 2017/575 [RTS27]

During 2019, MFM has regularly monitored the quality of execution obtained from the investment firm used to place client orders. MFM is satisfied that it had adhered to the requirements set out in its Order Execution Policy in seeking to obtain best execution for its clients by reference to all relevant factors.<br>Each trade is monitored by the Portfolio Managers when placing the trade instruction to ensure that it is executed on the best terms available. It is a prerequisite of the terms of business of the brokers used by MFM that they must provide best execution.

Where applicable, an explanation of how the investment firm has used output of a consolidated tape provider

Not applicable, as there are currently no consolidated tape providers in Europe.

Legal and regulatory

Managed Portfolios

How regulation works

Regulation in the UK

Site terms and conditions

Complaints handling procedure

Definitions and interpretations

RTS28-2020

MONEYFARM – TRADING AS MFM INVESTMENT LIMITED – LEI 213800O61IIMGUQNGI04

Annual reporting

Quantitative Report

Conflicts of interest policy

1. INTRODUCTION

2. DEFINITION

ESG Integration Policy

Order execution policy

1. TREATING CUSTOMERS FAIRLY

2. BEST EXECUTION

Summary of the Complaints Handling Procedure

Treating Customers Fairly

Qualitative Report

3. SITUATIONS

4. PROCEDURES

5. REMUNERATION

6. RESOLUTION

3. ORDER HANDLING

4. INVESTMENTS

5. EXCUTION VENUES