MIFIDPRU Disclosure

INTRODUCTION

Claymore Capital Management Limited (“the firm”) is authorised and regulated by the Financial Conduct Authority (“FCA”) as a MIFIDPRU investment firm. The firm is required to make an annual public “MIFIDPRU Disclosure” based on its audited financial statements for each financial year ending 31st December. This MIFIDPRU Disclosure is for the period 1st January 2023 to 31st December 2023. In terms of the FCA’s prudential rules, the firm’s relatively non-complex business model and limited scope of permissions means it is treated as a Small Non-Interconnected Firm (“SNI”). Therefore, the FCA rules allow the firm to apply proportionality in terms of the information provided in its disclosure and is only required to make a disclosure on its remuneration policies and practices. These FCA rules are contained in the FCA’s MIFIDPRU Remuneration Code located in SYSC19G of the FCA’s Handbook.

Approach to remuneration for all staff

Employees have the opportunity to share in the success of the firm in years of good performance and also accept reduced levels of variable (bonus) pay in times of poor performance or losses.

The firm does not remunerate or assess the performance of its staff in a way that conflicts with its duty to act in the best interests of its clients.

The firm does not make any arrangement by way of remuneration, sales targets or otherwise that could provide an incentive to its staff to recommend a particular financial instrument to a client when the firm could offer an alternative financial instrument which would better suit the client’s needs.

The firm is mindful of ensuring that its remuneration policy and practices do not lead to a conflict of interest or incentivise its staff to act in a manner that favours their own interests or the firm’s interests to the potential detriment of any client or potential client.

Objectives of financial incentives

The firm’s Remuneration Policy provides a framework to ensure all staff are fairly and competitively rewarded in return for a high level of service to the firm and is clients. In setting remuneration levels, the firm recognises the importance of attracting and retaining experienced staff. The amount of fixed remuneration paid to an employee will be based on market rates relevant to the employee’s role and their knowledge, experience, and competencies. Discretionary bonuses are made to employees to reward them for good performance with a view to increasing and maintaining their productivity.

Decision making

Senior management is responsible for the implementation of this policy as well as the monitoring of compliance risks associated with it. This policy is reviewed and approved by the board of directors at least annually to ensure it continues to remain fit for purpose with the input from the firm’s Compliance Officer.

Characteristics of remuneration policy and practices

Remuneration typically comprises of fixed and variable elements. Fixed remuneration consists of base salary, pension contribution and other benefits such as defined contribution pension, private medical insurance and life assurance.

The firm has defined variable pay as annual discretionary bonus, which is awarded based on firm performance and individual performance. The firm’s policy on variable remuneration is to set aside a proportion of the firm’s profits to form a bonus pool out of which awards are made. The total bonus pool amount is determined by reference to the firm’s risk-adjusted criteria, which include both quantitative and qualitative measures.

The firm ensures that remuneration and similar incentives are not solely or primarily based on quantitative commercial criteria. Consequently, the firm takes into account appropriate qualitative criteria (i.e. behavioural measures such as customer feedback) which include adherence with relevant regulations, fair treatment of clients, and the quality of services provided to clients.

The firm ensures it always maintains a balance between fixed and variable components of remuneration, so as to mitigate any conflicts of interest between the firm, its staff and its clients.

The total amount of remuneration awarded to all staff split into fixed remuneration and variable remuneration for the year ending 31 December 2023 is reported in the firm`s Audited Financial Statements and published on the Companies House website.

Shareholder Rights Directive II Engagement Policy

Introduction and Purpose

Under Rule 2.2B.5R of the Financial Conduct Authority's (“FCA”) Conduct of Business Sourcebook, Claymore Capital Management Limited (the "firm") is required to either develop and publicly disclose an engagement policy that meets the requirements of the Shareholder Rights Directive (“SRD II”) or to publicly disclose a clear and reasoned explanation of why it has chosen not to develop an engagement policy that meets the SRD II requirements.

The EU Shareholder Rights Directive II (“SRD II”) aims to improve stewardship and corporate governance by firms, including UK MiFID investment firms that invest in shares traded on a regulated market in the EEA, as well as ‘comparable’ markets outside of the EEA.

SRD II requires asset managers to adopt, on a “comply or explain” basis, an engagement policy describing how an asset manager integrates shareholder engagement as part of its investment strategy when dealing with companies that have a registered office in the EU and are listed on an EU regulated market, or on comparable markets outside the EEA.

Application:

Claymore Capital Management Limited (“the firm”) supports the aims of the SRD II, but because it manages very few investments in quoted companies and does not hold material positions in such EU listed companies it has chosen not to comply with the SRD II. As such, the firm does not maintain and will not publish, an engagement policy. Moreover, the Firm ensures that its clients are regularly and routinely apprised of the investment strategies employed by the Firm. As such, it is felt that the Firm’s clients would not expect the Firm to achieve compliance with the core requirements of the SRD II.

UK Stewardship Code Disclosure Statement (the “Code”)

Introduction and Purpose

The Code, first published by the Financial Reporting Council (“FRC”) in 2010, aims to enhance the quality of engagement between institutional investors and companies to help improve long-term returns to shareholders and the efficient exercise of governance responsibilities. The Code is a voluntary code that sets out good practice on engagement with investee companies and is to be applied to firms on a “comply or explain” basis. The FRC recognises that not all parts of the Code will be relevant to all institutional investors and that smaller institutions may judge some of the principles and guidance to be disproportionate.

The Code sets out seven principles that institutional investors should follow:

1. Publicly disclose their policy on how they will discharge their stewardship responsibilities;
2. Have and publicly disclose a robust policy on managing conflicts of interest in relation to stewardship;
3. Monitor their investee companies;
4. Establish clear guidelines on when and how they will escalate their activities as a method of protecting and enhancing shareholder value;
5. Be willing to act collectively with other investors where appropriate;
6. Have a clear policy on voting and disclosure of voting activity; and
7. Report periodically on their stewardship and voting activities.

Application

Whilst Claymore Capital Management Limited (“the firm”) supports the objectives that underlie Code it has taken the decision not to commit to the principles of the Code because active engagement with stewardship practices is not commensurate with the firm’s resources and stage of development. The firm has a written conflicts of interest policy and will always act in the best interest of its clients. The firm has small operations with limited listed portfolio under discretionary investment mandate to pursue a range of investment strategies involving a wide variety of investments and timeframes. Most investments are minority investments into companies that are not listed or are primarily listed outside of the UK. If the firm’s activities change in such a manner that the provisions of the Code become relevant, the firm will review its commitment to the Code at that time and make appropriate disclosure.