The FCRP™ Code of Conduct (v 1.1)
8 June, 2020
The Financing & Capital Raising Professional™ Programme Code of Conduct (The FCRP™ Code of Conduct) is applicable to:
(1) Candidates of Financing & Capital Raising Professional™ (FCRP™) Programme. FCRP™ is an online pure distance learning course awarded by The International Professional Managers Association (IPMA) of United Kingdom and offered by The PTI Group (PTI).
(2) Certified Financing & Capital Raising Professionals™ (FCRP™s)
Both (1) and (2) are collectively referred to as “Financing and Capital Raising Experts (FCREs)”. The FCRP™ Code of Conduct represents professional standards FCREs are required to adhere to, uphold, achieve and advocate.
Pertaining to Post-graduate Diploma, please also refer to Student Handbook of IPE Management School of Paris (IPE-Paris), available to you upon successful enrolment. In case of discrepancy, the stricter rule(s) will generally prevail. However, we reserve our rights to exercise discretion to decide which rule(s) to apply.
The FCRP™ Code of Conduct is subject to revisions &/or amendments from time to time without notice to you, and FCREs have to visit our website from time to time for the latest version. By posting a newer version of The FCRP™ Code of Conduct, you are deemed to have received the notice, and deemed to be aware of the latest version of The FCRP™ Code of Conduct.
1. Act Ethically
FCREs should act ethically, and should comply with all relevant laws, rules, regulations, code of conduct, professional standards etc. of the relevant country/jurisdiction and other applicable professional body(ies) to which the FCRE belongs.
In addition, FCREs should also act fairly, honestly, genuinely and in professional manner in raising or handling financing, capital raising or other fund-raising initiatives etc. A FCRE should never be engaged in or be associated with any illegal activity, or activity which may damage or may cause potential damage to the financing and capital raising sector.
A FCRE should never engage in any activity or malpractice which is unfair, dishonest, cheating, causing any loss or potential loss, or damaging reputation to any party, whether the party belongs to financing and capital raising sector or not.
In general, FCREs usually are heavily involved or have frequent chances to handle financial statements, figures and numbers. Any attempt to fabricate or manipulate any of the financial statement (whether audited or not), figure, or any number would be totally unacceptable, and constitutes serious breach of The FCRP™ Code of Conduct. Such misbehaviour would also breach laws or regulations of the relevant country/jurisdiction. FCREs are reminded of serious consequences for such misbehaviour.
2. Act Honesty
As a FCRE, honesty is crucial, whether the FCRE’s role is borrower, banker, investment banker, finance professional, private equity target co owner or manager etc.
No borrower, banker, investment banker, finance professional, private equity investor, target company owner or manager should try to hide any material info, or be intentionally or negligently causing any unnecessary delay to provide required material info to the relevant party involved, including to bankers, private equity investors etc.
3. Act Diligently
A FCRE should act diligently and conscientiously to perform his or her duties, including when providing or requesting for necessary info. Making reasonable enquiries and performing necessary work and assessment should be minimum standard expected of a FCRE.
A FCRE should endeavour to perform informed decisions and assessments, through obtaining necessary info, documents or materials, and performing reasonable researches, surveys and market updates etc., subject to confidentiality and restrictions in relevant legal documentation.
In making or approving loans, financing, capital raising or investments decisions, FCREs should base on relevant facts, data and info obtained from reliable sources, instead of solely on subjective basis. Where possible, FCREs should obtain facts, data and info from more than one sources, so as to allow comparison and verification. Where there is/are material discrepancy(ies) or inconsistency(ies), the FCRE should make reasonable enquiries, &/or gather additional facts, data and info, perform his or her independent analysis, and exercise his or her professional judgement.
In making or approving loans, financing, capital raising or investments decisions etc., FCREs should not act in any way negligently or overlook any key or significant data, info, or materials etc.
4. Fiduciary Duty
Another stipulation of The FCRP™ Code of Conduct requires FCREs to abide by and perform his/her fiduciary duties (or also known as duties of good faith), whenever such duties are reasonably expected of a professional.
Employee & Employer
An employee owes fiduciary duty to his or her employer, and should avoid situations where there would be actual or potential conflict of interests.
Investor Director & Investee Company
Some private equity investors may like to obtain board seat of the target co, i.e. acting as Investor Director. Similar to other directors, an Investor Director owes duty of good faith to the investee co. An Investor Director should avoid cases of conflict of interests or potential conflict of interests.
In the event of conflict of interests or potential conflict of interests, an Investor Director should disclose details to the board of the investee co, and should also avoid attending and voting in the relevant board meetings.
Borrower & Bank
Corporate borrowers should provide necessary financial, other relevant info, and updates to its bankers, or other loan providers on timely basis, including but not limited to up-to-date management accounts.
The borrower should not make any attempt to cause any unnecessary delay, or hide any material info from its banks, or other loan providers. This is to allow the bankers, or loan providers to more accurately analyse the potential risks, and perform more meaningful and informed credit assessment.
Delay by the borrower in providing material info may lead to the bank/loan provider missing some important, critical or updated info when making or proposing the lending decision.
Hiding any material or significant info, or providing false or incomplete info could give an incomplete or an untrue portrait regarding financial position, business prospects, and repayment ability etc. of the borrowing company.
A corporate borrower (including its owners, or management etc.) should not in any way mislead, or misrepresent to its banks for any info which is not true or false, or has no valid grounds to believe the data, info or materials provided or disclosed to its bankers is (i) true, or (ii) very likely to be true or (iii) has high probability of being achieved etc.
On the other hand, banks, or other loan providers have responsibilities to understand fundamental financing needs of the co, so they can provide appropriate advice regarding loan amount, structure and collaterals (if any) etc. Bankers, or other loan providers should also explain terms and conditions, obligations, as well as implications of the financing package to the corporate client.
5. Conflict of Interests
FCREs should avoid actual or potential conflict of interest situations. Some examples are cited below:
Example 1: Assume a bank officer is evaluating whether to provide a loan to a co owned by a connected party of the bank officer. In general, “connected parties” can include the bank officer’s spouse, siblings, children etc. For a co, “connected parties” can include directors, senior management, officers, holding cos, subsidiaries, associated cos, cos exercising joint control, or significant influence over the co, joint ventures in which the co is a joint venturer, key management of the co, or its parent companies, and other related parties etc.
FCREs have to note “connected parties” are also known as “related parties”, whose exact definition may vary from country to country, or from jurisdiction to jurisdiction.
Example 2: If a PE fund investment manager is evaluating whether to invest in a major competitor of an existing portfolio co, for which the investment manager is also acting as an Investor Director, conflict of interests would arise.
Please note the above are illustrations only and do not represent an exhaustive list of all possible cases of conflict of interest situations.
FCREs should endeavour to avoid situations in which conflict of interests may arise. Besides, FCREs should also appear to be fair, reasonable, honest, genuine, professional, and should ensure their independence is not impaired in any event.
6. Appropriate Level of Disclosure
Subject to confidentiality obligations and any restriction in the applicable legal agreement(s), FCREs are obliged to make appropriate level of disclosure to the relevant parties, such as:
- Unless agreed to be waived by the other party(ies), the borrowing co should provide necessary info, including but not limited to generally three years audited financial statements, co background, major shareholders, management, latest management accounts etc. For listed cos, the info can usually be easily accessible. However, for private companies, such info would be crucial for the bank to assess the borrower.
- A target company is expected to provide basic info and timely updates to its private equity investors, including up-to-date management accounts, minutes of board meetings, business plans, business updates, strategies, change of key personnel etc.
7. Commitment
As a professional, FCREs are expected to demonstrate reasonable level of commitment, both to financing and capital raising sector, and to its employer.
PE Firms/Investors & Target Companies
- PE firm, investors or PE fund management co (in the event investors investing via PE fund): PE firm or PE fund management co should provide necessary support, advice and help to target cos, since success of target cos can also bring satisfactory profits to the PE firm. Besides, any PE investor should not be in any way exploiting a target co, including technical know-how, patent or other intellectual property rights, including inventions etc.
- Target cos: Target cos should use the funds invested by PE firms, PE fund managers and PE investors in the way as agreed, and the funds should not be misused for other purposes. Examples of potential misuse of the invested funds: Using the funds for personal expenditure of target co’s owner, diversification into a new business area or acquisition of material assets without prior written consent of the relevant PE firms or investors, unless the investment agreement permits.
Banker & Corporate Borrower
- Banker: A banker should demonstrate his or her level of commitment to provide satisfactory service to the corporate borrower. Where the banker is aware of any proposed financing plans or credit facilities which may not be suitable for borrower, the banker should alert corporate borrower of potential risks.
- Borrower: The corporate borrower is expected to take initiative to provide necessary financial info, updates, and other relevant info to its bankers on timely basis.
8. Corporate Governance
FCREs should adhere to the principle of good governance, and implement a system of good internal control within their co, bank, firm, or organisation.
As part of good corporate governance, segregation of duties is essential in order to ensure check and balances. Independence of functions can serve to avoid the same person performing one or more roles which may cause conflict of interests.
FCREs should advocate and support adequate segregation of duties within his or her co, bank, firm, or organisation.
9. Social Responsibility
FCREs are expected to demonstrate responsibility and contribute towards the society. In the workplace, FCREs are expected to ensure safety conditions and working environment fulfil legal requirements as a minimum. If potential risks in safety or working environment are discerned, the FCRE should take remedial action as soon as possible to mitigate the risks.
Where the FCRE is not currently in positions with authorities to change safety conditions, they should report to or inform the relevant management or officer-in-charge, so appropriate action can be taken to rectify or mitigate the situation.
In addition, a FCRE should not do or attempt to do anything that will adversely affect safety, security, or causing any harm or potential harm to his or her staff, clients, bankers, investors, target company owners, or any one.
FCREs are also encouraged to contribute towards the society by organising or participating in voluntary work, &/or donations to charitable organisations etc. However, voluntary work and donations should be at free will and discretion of the FCRE, without any pressure exercised.
10. Duty to the Financing & Capital Raising Sector`
A FCRE should be committed to enhance reputation and professionalism, and should endeavour to develop and contribute towards sustainable development of financing and capital raising sector.
Under any circumstances, a FCRE should not do anything to damage reputation or credibility of financing and capital raising sector (including banking, private equity, corporate finance etc.), his or her employer, or professional body(ies) to which he or her is a member etc.
Where a Financing and Capital Raising Professional is suspicious of matters or persons which may cause damage or potential damage to financing and capital raising sector, his or her employer, or any professional body(ies), he or she should keep himself or herself distant or dissociated with such persons or matters.
The FCRP™ Code of Conduct applies to both candidates and certified FCRP™s, who are required to declare compliance to The FCRP™ Code of Conduct through submission of The FCRP™ Undertakings Declaration Statement (The FCRP™ UDS) when:
- At the time of enrolment &/or registration of The FCRP™ Programme, or
- Applying for certified FCRP™ status; or
- After admission as member of IPMA, annually for IPMA membership renewal; or
- Any time as required by PTI &/or IPMA on ad-hoc basis.
Failure by a candidate or a certified FCRP™ to declare compliance to The FCRP™ Code of Conduct through submission of The FCRP™ UDS, &/or to inform PTI of actual or potential changes for compliance, &/or breaches as stated above may lead to revocation of the FCRP™ designation, &/or suspension of the relevant membership with IPMA, &/or cancellation of rights to sit for all (i.e. not limited to FCRP™) online & other assessments, &/or all your assessment results will become void, to be determined at the sole and absolute discretion IPMA and The PTI Group. Please also refer to The FCRP™ UDS for the consequences, arising from not complying with The FCRP™ UDS, of which FCRP™ Code of Conduct is a part.
Whenever a candidate or a certified FCRP™ is aware of any actual or potential investigation(s), disciplinary proceeding(s) or action(s) by any professional body, complaint(s), litigation(s), etc. for professional misconduct, &/or ethical issue &/or illegal issue etc. &/or actual or potential breach of The FCRP™ Code of Conduct etc., the candidate or the certified FCRP™ should inform us immediately by emailing us.
Declaring compliance to The FCRP™ Code of Conduct, where compliance is not true partially or wholly, &/or providing inaccurate, incomplete or false info, &/or misrepresenting any fact, data or info are apparent violations of The FCRP™ Code of Conduct, and may lead to disciplinary actions and penalties, as determined at the sole and absolute discretion of PTI & IPMA.
In case of doubt or queries regarding The FCRP™ Code of Conduct &/or The FCRP™ Undertakings Declarations Statement &/or change of compliance statues regarding The FCRP™ Code of Conduct, please email us:
fcrp-conduct@the-pti.com