1.1 Conflict of interest arises where a person or market intermediary/intermediaries has an incentive to serve one interest at the expense of another interest or obligation.This may arise while serving the interest of the firm over a client, or serving the interest of one client over another client/clients, OR an employee or group of employees serving their own interests over those of the firm or its clients.

1.2 Conflict of interest arises in the activities of market intermediaries because of the different role which the intermediaries play within the same financial firm. A conflict may arise where the interest of a market intermediary may be inconsistent with or diverge from those of its clients, investors or others. There may also be a conflict between the interest of one group of clients and those of another group.

1.3   Conflict of interest exists throughout the commercial world. It is more challenging for large and multidisciplinary financial service organisation which has various parallel, vertical,or horizontal departments which may host potential conflict of interest. The conflict of interest is required to be carefully managed by the management, because failure to protect the client’s interest may bring attention of the regulator and carry regulatory risk which may be disastrous.

We need to understand that presently our business is highly dynamic because of invention of new products, new activities, new trading strategies and constantly changing client’s need and market condition. This may result that new conflicts will constantly arising in the Organisation.

The Organisation need to be very disciplined and should always regularly search for new area of conflicts and work for their solution with new approaches and remedial measure for existing and new conflicts, as the circumstances constantly changing and required dynamic solution of existing and new conflicts.

1.4  The conflict of interest may have various forms i.e. they may be actual, apparent or potential (future). It is common for a market intermediary to have conflict of interest in connection with securities trading because the market intermediary plays more multiple role. A market intermediary is a Stock broking entity which may act in various group which are engaged in Institutional trade, Proprietary trade or Portfolio management scheme. Thus where different entities within the group undertake different activities for different set of clients, function of these groups can create conflicts of interest between them and within market intermediaries.