Corporate Information

National Bank Financial – Wealth Management is the 5th largest investment dealer in Canada.

Statement of policies

Conflict of interest and related parties

Securities regulations in Canada require all investment dealers to comply with rules about conflicts of interest. It is important for you to know how we identify and respond to conflicts of interest, as well as how we minimize their impact.

What is a conflict of interest?

We consider a potential conflict of interest to be any circumstance in which our interests or the interests of our Investment Advisors or employees could be inconsistent or divergent with the interests of our clients or others who use our services.

We take reasonable steps to identify all existing material conflicts of interest, as well as those we would reasonably expect to arise. We then assess the level of risk associated with each conflict.

We avoid any situation that would create a serious conflict of interest or represent too high a risk for you or for the integrity of financial markets. In any other situation, we take appropriate measures to control the conflict. Where it cannot be avoided, we will notify you of any existing or potential material conflict of interest situation and any future material conflict of interest situation as they arise.

Conflict of interest situations

We could potentially be in a conflict of interest in our dealings with:

  • Issuers of securities
  • Related dealers and advisors
  • Other related companies
  • Our employees
  • Our clients

The following sections describe each of these potential conflicts and how we deal with them.

Issuers of securities

Sometimes we deal in the shares of companies or people that are related or connected to us. Here is how we define those terms.

A company or person is a “related issuer” if:

  • The person or company is an influential holder of NBF;
  • We are an influential holder of the person or company; or
  • Both we and the person or company are related issuers of the same third-party securities.

A company or person is a “connected issuer” if the issuer has a relationship with us that may lead a reasonable prospective purchaser to question whether we are independent from the issuer. This includes the issuer’s relationship with us, with one of our related issuers, with our directors, officers or partners or those of our related issuer.

As of August, 17, 2016, the following are considered our related issuers under Canadian securities legislation.

Allard, Allard & Associés - Canadian Equity Value Fund L.P. : National Bank of Canada holds 50% of voting and participating shares of Innocap Investment Management Inc. Innocap Investment Management Inc. is the investment manager of Allard, Allard & Associés - Canadian Equity Value Fund L.P.

Alstra Fund p.l.c.: Innocap Global Investment Management Ltd, a wholly owned subsidiary of National Bank of Canada acts as the Investment Manager of Alstra Fund p.l.c. Innocap Investment Management Inc. is held at 50% by National Bank of Canada and acts as the Investment Advisor of Innocap Global Investment Management Ltd.

Baldr Fund Inc.: Innocap Global Investment Management Ltd, a wholly owned subsidiary of National Bank of Canada acts as the Investment Manager of Baldr Fund Inc. Innocap Investment Management Inc. is held at 50% by National Bank of Canada and acts as the Investment Advisor of Innocap Global Investment Management Ltd.

Baldr Avalon Fund Inc.: Innocap Global Investment Management Ltd, a wholly owned subsidiary of National Bank of Canada acts as the Investment Manager of Baldr Avalon Fund Inc. Innocap Investment Management Inc. is held at 50% by National Bank of Canada and acts as the Investment Advisor of Innocap Global Investment Management Ltd.

Baldr Draco Fund Inc.: Innocap Global Investment Management Ltd, a wholly owned subsidiary of National Bank of Canada acts as the Investment Manager of Baldr Draco Fund Inc. Innocap Investment Management Inc. is held at 50% by National Bank of Canada and acts as the Investment Advisor of Innocap Global Investment Management Ltd.

Baldr Gedney Fund Inc.: Innocap Global Investment Management Ltd, a wholly owned subsidiary of National Bank of Canada acts as the Investment Manager of Baldr Gedney Fund Inc. Innocap Investment Management Inc. is held at 50% by National Bank of Canada and acts as the Investment Advisor of Innocap Global Investment Management Ltd.

Baldr Greenwich Fund Inc.: Innocap Global Investment Management Ltd, a wholly owned subsidiary of National Bank of Canada acts as the Investment Manager of Baldr Greenwich Fund Inc. Innocap Investment Management Inc. is held at 50% by National Bank of Canada and acts as the Investment Advisor of Innocap Global Investment Management Ltd.

Baldr Lancaster Fund Inc.: Innocap Global Investment Management Ltd, a wholly owned subsidiary of National Bank of Canada acts as the Investment Manager of Baldr Lancaster Fund Inc. Innocap Investment Management Inc. is held at 50% by National Bank of Canada and acts as the Investment Advisor of Innocap Global Investment Management Ltd.

Baldr Lock Fund Inc.: Innocap Global Investment Management Ltd, a wholly owned subsidiary of National Bank of Canada acts as the Investment Manager of Baldr Lock Fund Inc. Innocap Investment Management Inc. is held at 50% by National Bank of Canada and acts as the Investment Advisor of Innocap Global Investment Management Ltd.

Baldr Oxford Fund Inc.: Innocap Global Investment Management Ltd, a wholly owned subsidiary of National Bank of Canada acts as the Investment Manager of Baldr Oxford Fund Inc. Innocap Investment Management Inc. is held at 50% by National Bank of Canada and acts as the Investment Advisor of Innocap Global Investment Management Ltd.

Baldr Mason Fund Inc.: Innocap Global Investment Management Ltd, a wholly owned subsidiary of National Bank of Canada acts as the Investment Manager of Baldr Mason Fund Inc. Innocap Investment Management Inc. is held at 50% by National Bank of Canada and acts as the Investment Advisor of Innocap Global Investment Management Ltd.

Baldr Sherwood Fund Inc.: Innocap Global Investment Management Ltd, a wholly owned subsidiary of National Bank of Canada acts as the Investment Manager of Baldr Sherwood Fund Inc. Innocap Investment Management Inc. is held at 50% by National Bank of Canada and acts as the Investment Advisor of Innocap Global Investment Management Ltd.

Baldr Sonata Fund Inc.: Innocap Global Investment Management Ltd, a wholly owned subsidiary of National Bank of Canada acts as the Investment Manager of Baldr Sonata Fund Inc. Innocap Investment Management Inc. is held at 50% by National Bank of Canada and acts as the Investment Advisor of Innocap Global Investment Management Ltd.

Baldr Spitfire Fund Inc.: Innocap Global Investment Management Ltd, a wholly owned subsidiary of National Bank of Canada acts as the Investment Manager of Baldr Spitfire Fund Inc. Innocap Investment Management Inc. is held at 50% by National Bank of Canada and acts as the Investment Advisor of Innocap Global Investment Management Ltd.

Baldr Thor Fund Inc.: Innocap Global Investment Management Ltd, a wholly owned subsidiary of National Bank of Canada acts as the Investment Manager of Baldr Thor Fund Inc. Innocap Investment Management Inc. is held at 50% by National Bank of Canada and acts as the Investment Advisor of Innocap Global Investment Management Ltd.

Baldr Valkyrie Fund Inc.: Innocap Global Investment Management Ltd, a wholly owned subsidiary of National Bank of Canada acts as the Investment Manager of Baldr Valkyrie Fund Inc. Innocap Investment Management Inc. is held at 50% by National Bank of Canada and acts as the Investment Advisor of Innocap Global Investment Management Ltd.

National Bank of Canada: National Bank of Canada is a bank incorporated under the Bank Act (Canada) and is a reporting issuer that holds indirectly 100% of the voting and equity shares of NBF.

Canadian Credit Card Trust II: This trust is a trust whose administrator is National Bank of Canada and whose securities are publicly distributed. Consequently, Canadian Credit Card Trust is deemed to be a related issuer.

Fiera Capital Corporation: Fiera Capital Corporation is a portfolio manager of which 23% of the issued and outstanding shares are indirectly held by National Bank of Canada.

NBC Asset Trust: This trust is a closed-end trust whose voting units are held by National Bank of Canada. Consequently, NBC Asset Trust is deemed to be a related issuer.

Horizons AlphaPro Exchange Traded Funds: NBF International Holdings Inc., an indirect wholly-owned subsidiary of National Bank of Canada, holds voting securities of AlphaPro Management Inc., manager and trustee of these Funds.

National Bank Mutual Funds: National Bank Investments Inc., a wholly-owned subsidiary of National Bank of Canada, is the manager of all National Bank Mutual Funds (including Jarislowky Fraser Funds, Westwood Funds, NBI Private Portfolios and  NBI SmartBeta Funds), namely National Bank Dividend Income Fund Inc. and National Bank AltaFund Investment Corp., two mutual fund corporations. Fiera Capital Corporation is the portfolio manager of most of the National Bank Mutual Funds. National Bank Short Term Yield Class is a class of shares of National Bank Funds Corporation, a mutual fund corporation indirectly controlled by National Bank of Canada.  

Lakeroad Equity L/S Fund L.P. : National Bank of Canada holds 50% of voting and participating shares of Innocap Investment Management Inc. Innocap Investment Management Inc. is the investment manager of Lakeroad Equity L/S Fund L.P.

IPSOL Global Equity Fund L.P. : National Bank of Canada holds 50% of voting and participating shares of Innocap Investment Management Inc. Innocap Investment Management Inc. is the investment manager of IPSOL Global Equity Fund L.P.

Landry Global Equity II Fund L.P. : National Bank of Canada holds 50% of voting and participating shares of Innocap Investment Management Inc. Innocap Investment Management Inc. is the investment manager of Landry Global Equity II Fund L.P.

Landry Global Equity L/S Fund L.P. : National Bank of Canada holds 50% of voting and participating shares of Innocap Investment Management Inc. Innocap Investment Management Inc. is the investment manager of Landry Global Equity L/S Fund L.P.

LionGuard Canadian Small Cap Equities Fund L.P. : National Bank of Canada holds 50% of voting and participating shares of Innocap Investment Management Inc. Innocap Investment Management Inc. is the investment manager of LionGuard Canadian Small Cap Equities Fund L.P.

Razorbill Bond Fund L.P. : National Bank of Canada holds 50% of voting and participating shares of Innocap Investment Management Inc. Innocap Investment Management Inc. is the investment manager of Razorbill Bond Fund L.P.

Global Alpha Fund L.P. : National Bank of Canada holds 50% of voting and participating shares of Innocap Investment Management Inc. Innocap Investment Management Inc. is the investment manager of Global Alpha Fund L.P.

Majestic Global Diversified Fund L.P. : National Bank of Canada holds 50% of voting and participating shares of Innocap Investment Management Inc. Innocap Investment Management Inc. is the investment manager of Majestic Global Diversified Fund L.P.

Crystalline Global Macro Fund L.P. : National Bank of Canada holds 50% of voting and participating shares of Innocap Investment Management Inc. Innocap Investment Management Inc. is the investment manager of Crystalline Global Macro Fund L.P.

Galliant Market Neutral Fund Fund L.P. : National Bank of Canada holds 50% of voting and participating shares of Innocap Investment Management Inc. Innocap Investment Management Inc. is the investment manager of Galliant Market Neutral Fund Fund L.P.

Razorbill Beta Plus Canadian Universe Bond Fund L.P. : National Bank of Canada holds 50% of voting and participating shares of Innocap Investment Management Inc. Innocap Investment Management Inc. is the investment manager of Razorbill Beta Plus Canadian Universe Bond Fund L.P.

Hexavest GTAA Fund L.P. (established in Quebec under the name Fonds Hexavest AATG): National Bank of Canada holds 50% of voting and participating shares of Innocap Investment Management Inc. Innocap Investment Management Inc. holds 100% of voting and participating shares of Innocap GTAA GP Inc. (established in Quebec under the name Commandité Innocap GTAA), which acts as general partner of this fund. Innocap Investment Management Inc. is the investment manager of Hexavest GTAA Fund LP.

Icare Investment Solutions p.l.c. : Innocap Global Investment Management Ltd, a wholly owned subsidiary of National Bank of Canada acts as the Investment Manager of Icare Investment Solutions p.l.c. Innocap Investment Management Inc. is held at 50% by National Bank of Canada and acts as the Investment Advisor of Innocap Global Investment Management Ltd.

Innocap Fund SICAV p.l.c.: Innocap Global Investment Management Ltd, a wholly-owned subsidiary of National Bank of Canada, acts as the Investment Manager of Innocap Fund SICAV p.l.c. Innocap Investment Management Inc. is held at 50% by National Bank of Canada, and acts as the Investment Advisor of Innocap Global Investment Management Ltd.

Innocap Globevest Capital AG Fund L.P. (established in Quebec under the name Fonds Innocap Globevest Capital CA): National Bank of Canada holds 50% of voting and participating shares of Innocap Investment Management Inc. Innocap Investment Management Inc. holds 100% of voting and participating shares of Innocap GCAG GP Inc. (established in Quebec under the name Commandité Innocap GCAG), which acts as general partner of this fund. Innocap Investment Management Inc. is the investment manager of Innocap Globevest Capital AG Fund L.P.

Innocap TOBAM Anti-Benchmark World Equity Fund L.P. (established in Quebec under the name Fonds Innocap TOBAM Actions Internationales Anti Indice de Référence): National Bank of Canada holds 50% of voting and participating shares of Innocap Investment Management Inc. Innocap Investment Management Inc. holds 100% of voting and participating shares of Innocap TAWE GP Inc. (established in Quebec under the name Commandité Innocap TAWE), which acts as general partner of this fund. Innocap Investment Management Inc. is the investment manager of Innocap TOBAM Anti-Benchmark World Equity Fund L.P.

InRIS QIAIF p.l.c.: Innocap Global Investment Management Ltd, a wholly owned subsidiary of National Bank of Canada acts as the Investment Manager of InRIS QIF p.l.c.. Innocap Investment Management Inc. is held at 50% by National Bank of Canada and acts as the Investment Advisor of Innocap Global Investment Management Ltd.

InRIS UCITS p.l.c.: Innocap Global Investment Management Ltd, a wholly-owned subsidiary of National Bank of Canada, acts as the Investment Manager of InRIS UCITS p.l.c. Innocap Investment Management Inc. is held at 50% by National Bank of Canada, and acts as the Investment Advisor of Innocap Global Investment Management Ltd.

Investment Grade Managed Duration Income Fund: National Bank Financial Inc., which is one of the Agents and the Promoter, is an affiliate of a Canadian chartered bank which has been requested to provide the Fund with a loan facility or prime brokerage facility, the proceeds of which would be used by the Fund for various purposes, including purchasing additional securities for the Portfolio, effecting market purchases of Units, maintaining liquidity and funding redemptions.

NBCG Fund SICAV p.l.c.: Innocap Global Investment Management Ltd, a wholly-owned subsidiary of National Bank of Canada, acts as the Investment Manager of NBCG Fund SICAV p.l.c.. Innocap Investment Management Inc. is held at 50% by National Bank of Canada, and acts as the Investment Advisor of Innocap Global Investment Management Ltd.

Meritage Portfolios: National Bank Investments Inc., a wholly-owned subsidiary of National Bank of Canada, is the manager of the Meritage Portfolios. National Bank Trust Inc., a wholly-owned subsidiary of National Bank of Canada, is the portfolio manager of all Meritage Portfolios. Certain Meritage Portfolios are classes of shares of National Bank Funds Corporation.

U.S. Banks Income & Growth Fund: National Bank Financial Inc., which is one of the Agents and the Promoter, is an affiliate of a Canadian chartered bank which has been requested to provide the Fund with a loan facility or prime brokerage facility the proceeds of which would be used by the Fund for various purposes, including purchasing additional securities for the Portfolio, effecting market purchases of Units, maintaining liquidity and funding redemptions. Consequently, the Fund may be considered a “connected issuer” of National Bank Financial Inc. under applicable securities legislation.

 

When we deal with securities issued by our related or connected issuers, we may:

  • Act as an underwriter or selling group member in the distribution of the securities.
  • Sell the securities to, or on behalf of, our clients.
  • Purchase the securities from, or on behalf of, our clients.
  • Exercise discretionary authority to buy or sell the securities, with the written consent of the client.
  • Act as an advisor regarding the securities.
  • Make recommendations to buy or sell the securities.
  • Offer for sale securities, goods and services issued or provided by National Bank of Canada or another related issuer.
  • Work with National Bank of Canada or another related issuer to jointly offer the sale or purchase of securities, goods or services.

It is our policy to comply fully with all securities legislation. We make all required disclosures when acting as advisor, dealer or underwriter of the securities of National Bank of Canada and our other related or connected issuers.

Before advising you on the securities of a related issuer or taking part in the distribution of securities of a related issuer, we will inform you, verbally or in writing, about the relationship between the advisor and the issuer of the securities.

Before we exercise discretionary authority over securities of a related or connected issuer, we give you the issuer’s current Statement of Policies. If necessary, we also obtain your specific and informed written consent to exercise the discretionary authority. In the provinces of Alberta, Ontario and Newfoundland, we take these steps once every 12 months.

When we buy or sell securities with a subsidiary or affiliate, we ensure that the transaction price, along with any brokerage commission, is as good as or better than the price offered by an unaffiliated third party broker in an arms-length transaction.

In addition, when we deal in securities of related or connected issuers, we take your investment objectives into account.

As part of our business as an investment dealer, we may act as “agent” or “principal” while buying or selling on your behalf. In such instances, we will provide services in accordance with our normal practices and procedures, and follow all relevant legislations or regulations.

 

Related dealers and advisors

Because of our affiliation with National Bank of Canada and its subsidiaries, we have put policies in place to deal with any potential conflict of interest, and to ensure we act in your best interests.

We are registered as an investment dealer and an indirect wholly-owned subsidiary of National Bank of Canada. National Bank of Canada is also an important shareholder of the following dealers and advisors, meaning it directly or indirectly holds more than 10% of any class or series of voting securities:

National Bank Investments Inc.

CABN Investments Inc.

National Bank Direct Brokerage Inc.

National Bank Financial Inc.

National Bank Financial Ltd.

Innocap Investment Management Inc.

Innocap Global Investment Management Ltd. - in Malta only

National Bank of Canada Financial Inc.  - in Ontario and Quebec

NBC Financial Markets Asia Limited - in Hong Kong only

NBCN Inc.

NBF International S.A. - in Switzerland only

Natcan Trust Company

National Bank Trust Inc.

Fiera Capital Corporation

Fiera Capital Funds Inc.

Maple Securities Canada Limited

Maple Securities U.S.A. Inc. - in United States only

Maple Securities (U.K.) Limited - in United Kingdom only

PI Financial Corp.

PI Financial (US) Corp. - in United States only

We are therefore related to these dealers and advisors. Although there may be overlaps among the directors and officers of these companies, all of them operate as separate legal entities.

Both we and the related dealers or advisors named above may provide services to each other, including management and administrative services, as well as client referrals.

These relationships are subject to certain legislation and industry regulations. We have also adopted internal policies and procedures to supplement these requirements, including our policies on confidentiality of information.

 

Other related companies

TMX Group

National Bank Group Inc., one of our affiliates, owns or controls an equity interest in TMX Group Limited in excess of 5% of the issued and outstanding equity securities thereof, and has a nominee director serving on the board. In addition, NBF is an indirect wholly-owned subsidiary of National Bank of Canada. From time to time, National Bank of Canada may enter into lending or financial arrangements with companies that are the subject of NBF research reports or that are recommended. At the present date, National Bank of Canada is a lender to TMX Group Limited under its credit facilities. As such, NBF may be considered to have an economic interest in TMX Group Limited. No person or company is required to obtain products or services from TMX Group Limited or its affiliates as a condition of doing business with TMX Group Limited or its affiliates.

TMX Group Limited is also the limited partner of Alpha Trading Systems Limited Partnership. Alpha Trading Systems Limited Partnership owns Alpha Exchange Inc., a stock exchange in Canada for the trading of securities.

We can execute transactions on your behalf on Alpha Exchange Inc. and enter orders into Alpha Exchange Inc.’s order book which cannot be immediately completed. In that role, we are subject to a number of regulatory obligations, including the requirement to diligently pursue the best price and best execution of each client order on the marketplace. Those obligations override the direct or indirect interest NBF has in the above companies.

Horizons Exchange Traded Funds family (Horizons ETF)

NBF has assisted in the formation of certain of the Horizons ETFs by subscribing for the initial unit investment sufficient to allow these Horizons ETFs to commence their listing and trading activities on the exchanges on which they are listed or traded. NBF is the “registered trader” for certain of the Horizons ETFs listed on the Toronto Stock Exchange and in that regard performs market maker functions in accordance with the rules of the exchange. All securities listed on the Exchange have a dealer selected to perform this role which is intended to help ensure that the trading market for the securities operates in an efficient manner.

NBF is one of several dealers selected by the Horizons ETF to be a      “Designated Broker” and “Underwriter”. The purpose and function of these roles are described in the Horizons ETF prospectuses. The dealers acting in these capacities create added liquidity for investors in the particular Horizons ETF.

National Bank of Canada, NBF and their affiliates may hold units in one or more Horizons ETFs as principal either through direct investment in these units or by retaining units acquired through their market making functions. We note that many of the Horizons ETFs offer alternative positions (“bull” or “bear”) or a given investment. National Bank of Canada, NBF and their affiliates as principal may hold either of such positions from time to time based upon their view of the market at that time.

National Bank of Canada, NBF and their affiliates may provide credit, derivative investment products, such as forward contracts, and other services to one or more of the Horizons ETFs, which products or services may be integral to the operation of the Horizons ETF. Further information regarding the types of products or services required by the Horizons ETFs may be found in the Horizons ETF prospectuses.

NBF International Holdings Inc., an indirectly wholly-owned subsidiary of National Bank of Canada, holds voting securities of AlphaPro Management Inc., the manager of certain Horizons ETFs.

Fiera Capital Corporation

We retain many portfolio management firms to act as sub-advisors for the range of discretionary managed investment products and services we offer.

The fees you pay for these products and services are determined by agreement between you and your Investment Advisor when you participate in one of our discretionary management programs. These fees provide compensation paid to us and your Investment Advisor, as well as the sub-advisor providing the investment selection for your product or service. The total compensation to be received by us and your Investment Advisor is, in part, influenced by the amount of compensation payable to the sub-advisor.

Fiera Capital Corporation (“Fiera”) is one of the sub-advisors we retain. Our parent bank, National Bank of Canada (the “Bank”), is a significant shareholder in Fiera, and Fiera has agreed to provide its investment management services to us on favourable terms. As a result, the fees paid to Fiera by us for its sub-advisory services are generally lower than those charged by other arm’s length portfolio managers. In addition, the Bank has agreed to compensate Fiera in certain circumstances if the overall value of the assets it manages for the Bank and its affiliates fall below specified levels; however, the Bank and its affiliates, including NBF, have no obligation to have any minimum value of assets managed by Fiera.

As a result, we may be seen to have an economic incentive to offer investment products and services managed by Fiera. In addition, your Investment Advisor has an economic incentive to recommend investment products and services for which Fiera is a sub-advisor over products and services offered to you by other sub-advisors because the compensation to be received by your Investment Advisor will generally be higher.

If you would like further details on the fees payable to alternative sub-advisors for the investment products and services you are considering, please request that from your Investment Advisor.

Under applicable regulatory requirements, your Investment Advisor must always ensure that the products or services recommended to you are suitable to your investment objectives and risk tolerance.

Our employees

In the ordinary course of performing their duties, our directors, officers, employees, representatives and agents may find their personal interests are in potential conflict with those of a client.

We have developed a Code of Professional Conduct, a Compliance Manual and internal policies. Among other things, these documents state that our employees must never put their own interests ahead of their responsibilities toward clients or NBF. They also reinforce the fact that any material conflict of interest must be addressed in a manner that is fair, equitable, transparent and consistent with the clients’ best interests.

Here are some highlights from these documents:

Confidential information: Our employees are prohibited from using confidential information gained in the course of their duties for their personal benefit, or for the benefit of a third party. This includes information related to clients, transactions or client accounts. Our employees may not exploit any situation for the purpose of obtaining an advantage of any kind.

Gifts, entertainment and compensation: Employees are prohibited from accepting gifts, entertainment or compensation that could influence the decisions they make in the course of performing their duties. Unless they have our prior approval, our employees may not receive any form of compensation other than what we pay them. We ensure that our employee compensation practices do not conflict with employees’ obligations toward our clients.

Other business activities: Employees are prohibited from engaging in activities that could interfere or be in conflict with their duties. We will not permit any employee to engage in business activities outside the scope of their duties without first ensuring that these activities do not compromise our clients’ interests or harm our own reputation or that of the industry. This includes taking positions, such as director or officer of a public or private company, or becoming an executor, liquidator or agent of a client. We also consider an employee to be in a potential conflict of interest if he or she would be designated as a beneficiary of a client’s estate or otherwise inherit from a client’s estate.

Client best interests: The interests of clients must always be given priority over those of the company and its employees. When we receive two orders for the same security at the same or better price, we always execute the client’s order before our or our employee’s order. This also means that the Investment Advisor has an obligation to choose the best investment for a given client, even if it is an investment that directly competes with our offerings. No Investment Advisor is authorized to make recommendations solely for the purpose of generating revenue or promoting in-house investments if there is no benefit to the client.

Referrals: On occasion, third parties may refer clients to us for our products and services. We or our Investment Advisors may also refer clients to third parties. When these referrals involve a commission, the commission must comply with existing regulations, and we notify the referred client about the commission and other relevant information. This allows the client to make an informed decision about the referral, and to consider any potential conflict of interest.

Corporate financing, advisory and research activities: We offer corporate financing, research and investment advisory services for a fee. We have established procedures and policies to avoid conflicts of interest and to protect the confidentiality of privileged information. In addition, our departments involved in advisory and research activities are physically isolated from all our trading activities.

Underwriting and market-maker activities: In some cases, we may act as an underwriter, meaning we administer the public issue and distribution of securities. We may also be a market maker, which means we hold an inventory of securities and use it to quickly complete buy and sell orders. In some cases, the interests of the parties we work for can differ from the interests of our clients. Regulations govern the various roles we play. In a case of conflict, we are duty bound to abide by the applicable legislations and regulations. We will always give the client’s best interest priority over our own interest.

Policy respecting the allocation of securities: We have a policy that deals with the allocation of securities among our clients when there are not enough securities to meet the demand. This policy is intended to ensure fair distribution of securities.

Brokerage commissions: We charge brokerage fees when an Investment Advisor exercises discretionary power by trading investments on behalf of a third party. Examples include transactions carried out for an investment fund or for an account under discretionary management. We adhere to requirements intended to ensure that the brokerage fees are proportionate to the services the client receives.

Private placements and personal investments: Employees who wish to participate in a private placement, as a buyer or promoter, must first go through our authorization and verification procedure to avoid or supervise potential conflicts of interest. Our employees’ personal investments are also subject to our policies and supervision.

Discretionary management: We offer discretionary management services to our clients. In some instances, the securities making up the portfolios under management may also be held by some of our employees, officers or directors, or may come from our related or connected issuers. Our discretionary management services must comply with the applicable legislations and regulations.

Compensation: We are compensated for the business we do with our clients. The level of compensation varies depending on the product and the type of remuneration. Here are some examples of how compensation could lead to a conflict of interest, and how we avoid such conflicts:

  • Compensation from issuers: Issuers of securities or other related parties may compensate us based on the sale of their securities to our clients. An example is trailing commissions we receive for selling mutual funds. Securities regulations require issuers to include details in their offering documents about such arrangements and the compensation involved.
  • Currency and interest rates: On occasion, we may be compensated indirectly. For example, in a foreign currency exchange, we may receive compensation based on the difference between the price our clients pay for the currency and the price we pay for the same currency. We could also be compensated based on the difference between the interest rate we receive on invested funds and the interest rate actually paid to our clients.
  • Marketplaces: We may receive compensation based on the marketplace we use to carry out our clients’ transactions. Regulations control the conditions under which we carry out our client transactions.
  • Over-the-counter securities: We may receive compensation for the purchase or sale of some over-the-counter securities. These investments are traded outside of the formal exchanges. We mark up the final price clients pay when they buy these securities, and mark down the final price clients receive when they sell these securities.
  • Compensation for Investment Advisors: Investment Advisors qualify for different types of incentives, such as trips or bonuses, when the revenue they generate crosses a certain threshold. We prohibit Investment Advisors from making recommendations solely for the purpose of generating revenue without any benefit to the client. We have a comprehensive supervision program in place to monitor Investment Advisors and ensure that any recommendation they make is suited to the client’s investment objectives, time horizon, risk tolerance, investment knowledge and overall financial situation.
  • Fee-based or commission accounts: There may be periods when it would be cheaper for clients to pay a commission per trade instead of a fee based on the assets they hold. Investment Advisors must always ensure that clients are using the billing method most suitable to their needs.

Proxy voting: Your Investment Advisor may ask whether you intend to vote on a specific matter or question pertaining to the securities you hold. Your Investment Advisor may even ask you to vote in a specific manner. In some cases, the issuer or another party pays us or your Investment Advisor to ask for your vote or proxy in their favour. We always ask our Investment Advisors to disclose any compensation they or we receive in these cases. Our policy is that any recommendation the Investment Advisor makes must be in the best interests of the client.

Transaction between two clients: In some circumstances, we may have one client who wants to buy a security through us and another client who wants to sell the same security through us. Our policy is to ensure that we make such transactions at fair market value. Neither we nor our Investment Advisors are authorized to favour one client over another. Regulations and our policies require Investment Advisors to make only suitable investment recommendations to clients.

Margin accounts and investment loans: A margin account or an investment loan generates debit interest and additional fees or commissions when we invest the amount borrowed. This benefits the Investment Advisor, as well as us or one of our related companies that makes the loan. Any investment recommendation made by the Investment Advisor must be suitable for the clients.

 

Other conflicts of interest

Other potential or actual conflicts of interest may arise. We will continue to take the necessary steps to identify and respond to such situations fairly and reasonably, and update our policies as required. Where not avoided, any material conflicts of interest will be disclosed to you as they arise.

Referring clients among members of National Bank group of companies

NBF and other members of the National Bank group of companies refer clients to each other according to the needs of the client provided the client has given us his/her consent. If one member of the National Bank group of companies does not offer services that a client needs, that member will refer the client to another member of the group that does. An example of a common referral is when National Bank refers a client to us to establish a brokerage account.

Some business units in the National Bank group of companies, including NBF, are registered under securities legislation. If you are referred to a business unit for a product or service that requires securities registration, that business unit is responsible to you for the activities that require registration. An example would be if you were referred by your National Bank branch manager to NBF for an investment transaction; NBF would be responsible for everything related to that transaction.

National Bank group of companies and referral arrangements

We enter into referral arrangements with the members of the National Bank group of companies listed below. We and these other members are completely separate from each other, but are all direct or indirect wholly-owned subsidiaries of National Bank. Each member holds the appropriate registrations for the services they offer.

National Bank is a federally regulated bank, which offers a full array of banking services, including corporate and investment banking. It is an active player on international markets and, through its subsidiaries, is involved in securities brokerage, insurance and wealth management, as well as mutual fund and retirement plan management.

National Bank Financial Ltd. and National Bank Financial Inc. are each registered as investment dealers. National Bank Financial Ltd. is registered in all Canadian jurisdictions, except New Brunswick and Quebec. National Bank Financial Inc. is registered in all Canadian jurisdictions. Each is a truly integrated full-service securities dealer. They combine retail advisory and brokerage services with institutional brokerage, investment banking, corporate finance and securities clearing services for third parties.

 

Private Banking 1859 is a trademark NBF and other members of the National Bank group of companies use. It has been created for individuals and families with substantial financial assets who wish to ease the burden of managing their wealth on a day-to-day basis. These clients understand the benefits of entrusting this task to professionals. The business model is designed as a complete, integrated offering.

National Bank Insurance Firm Inc. is an indirect wholly-owned subsidiary of National Bank. National Bank Insurance Firm Inc. offers a variety of insurance products and services, such as life insurance, disability insurance, critical illness insurance and other insurance products for individuals and businesses.

National Bank Financial Financial Services Inc. and National Bank Financial Financial Services Ltd. (together, “NBFFS”) are wholly-owned subsidiaries of NBF. NBFFS offers a variety of insurance products and services, such as life insurance, disability insurance, critical illness insurance and other insurance products for individuals and businesses.

Referral fees

When we refer a client to another member of the National Bank group of companies or when another member of the group refers a client to us, one company generally pays the other a commission.

It is important to note that these referral arrangements will not increase the costs or fees associated with client services. Therefore, the client will not pay more as a result of any referral arrangement between us and other members of the National Bank group of companies.

The commissions give us and other members of the National Bank group of companies incentive to refer clients to each other. The commissions will vary depending on which member of the National Bank group of companies is involved, and whether the client is referred to or by us.

We and the other members of the National Bank group of companies have adopted policies and procedures to help identify any material conflict of interest which may arise from these referral arrangements.

We will not be involved in or made aware of your specific dealings with the other member(s) of the National Bank group of companies, other than in reference to any referral fees generated as well as any specific authorization you may grant the member(s) of the National Bank group of companies in your account opening form.

The referral commissions we and the members of the National Bank group of companies share may be modified from time to time, in accordance with the referral arrangements we and other members of the National Bank group of companies may enter into with one another. In such cases, the list of referral arrangements and the information pertaining to the referral commissions will be updated and made available for consultation on this website.