LEGAL & PRIVACY

 

 

National Instrument 24-101

 

 

Registration

NBCN Inc. will not open accounts except in jurisdictions in which it is registered or in which it has a registration exemption.

 

Unclaimed Property

The provinces of BC, Saskatchewan, Quebec, Nova Scotia and Newfoundland / Labrador all have laws pertaining to unclaimed property.  For further details, please refer to those provinces’ websites.

 

STATEMENT OF POLICIES

05/27/10

 

Securities regulations applicable in Canada require dealers and advisers to comply with certain rules in relation to conflicts of interest, particularly with respect to disclosure in regard to such conflicts of interest.

 

Purpose of this Document

It is important for you to be informed about how we identify and respond to conflicts of interest in order to minimize their impact. We consider a conflict of interest to be any circumstance where the interests of different parties, such as the interests of a client and those of NBCN Inc. (hereinafter “NBCN”), are inconsistent or divergent.

 

We take reasonable steps to identify all existing material conflicts of interest, and those we would reasonably expect to arise. We then assess the level of risk associated with each conflict. We avoid any situation that would entail a serious conflict of interest or represent too high a risk for clients or market integrity. In any other situation entailing a conflict of interest, we ensure that appropriate measures are implemented to control the conflict of interest effectively.

 

The purpose of this Statement of Policies respecting conflicts of interest is to inform you of the nature and extent of conflicts of interest that may affect the services NBCN provides to you.

 

Conflicts of Interest

 

The situations in which NBCN could be in a conflict of interest, and the way in which NBCN intends to respond to such conflicts, are described below.

 

 

Relationships with Parties Related or Connected to NBCN

 

“Related issuer” means, with respect to NBCN, an issuer of securities over which NBCN exercises a controlling influence (for example, due to the influence held by NBCN over the issuer’s voting shares) or an issuer of securities that exercises a controlling influence over NBCN. In this context, the term “influence” means having the power, directly or indirectly, to exercise a controlling influence over the management and policies of the company, whether alone or in combination with one or more other persons or companies. In some jurisdictions, some connected issuers may be considered related issuers.

 

“Connected issuer” means, with respect to NBCN, an issuer or any of its related issuers that has any indebtedness to, or other relationship with, (i) NBCN, (ii) a related issuer of NBCN, or (iii) a director, officer or partner of NBCN or (iv) a director, officer or partner of a related issuer of NBCN that, in connection with a distribution of securities of the issuer, is material to a prospective purchaser of the securities. Accordingly, an issuer is “connected” to NBCN if, due to indebtedness or other relationships, a prospective purchaser of securities of the connected issuer might question the independence of NBCN vis-à-vis the issuer.

 

As of September 28, 2009, the list of related issuers of NBCN which are reporting issuers under Canadian securities legislation is as described hereunder. A concise statement of the relationship between NBCN and each related issuer is also provided:

 

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

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

 

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

 

National Bank Securities Mutual Funds (including National Bank Funds, Altamira Funds and Omega Funds):National Bank Securities Inc., an indirectly wholly-owned subsidiary of National Bank of Canada, is the manager of all National Bank Securities Mutual Funds. Natcan Investment Management Inc., a partly-owned subsidiary of National Bank of Canada, is the portfolio manager of most National Bank Securities Mutual Funds (with the exception of certain Omega Funds). National Bank Strategic Yield Class is a class of shares of National Bank Funds Corporation, a mutual fund corporation indirectly controlled by National Bank of Canada. Altamira Dividend Fund Inc. and Altafund Investment Corp. are also mutual fund corporations indirectly controlled by National Bank of Canada.

 

Natcan QSSP II Investment Fund Inc.: Natcan Investment Management Inc., a partly-owned subsidiary of National Bank of Canada, is the manager of The Natcan QSSP II Investment Fund Inc. All Class B Shares, which are voting shares, are held by Natcan Investment Management Inc.

 

Meritage Portfolios: National Bank Securities Inc., an indirectly 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.

 

In the ordinary course of its practice as a full service securities dealer, NBCN may on occasion engage in the following activities with respect to National Bank of Canada or another related issuer of NBCN, and at the time of distributing National Bank of Canada securities or those of another connected issuer of NBCN:

 

1)                   act as underwriter or member of a syndicate of underwriters relative to the distribution of such securities;

2)                   sell such securities to NBCN clients or on their behalf;

3)                   purchase such securities to NBCN clients or on their behalf;

4)                   act as advisor relative to such securities;

5)                   make recommendations relative to such securities;

6)                   make an offer to sell securities, products and services including securities, products and services issued or provided by National Bank of Canadaor another related issuer or collaborate with National Bank of Canada or another related issuer to make a joint offer to sell or purchase securities, products or services.

 

It is the policy of NBCNto comply fully with all applicable securities legislation and make all required disclosures. In addition, NBCN ensures that any dealings in securities of related or connected issuers take the client’s situation into account.

 

NBCN’s affiliation with National Bank of Canada and its subsidiaries makes it necessary to put in place certain policies aimed at dealing with any potential conflicts of interest and ensuring that the best interest of NBCN’s clients is preserved.

 

NBCNis a duly registered full service securities dealer. In addition, National Bank of Canada, the principal shareholder of NBCN, is also the principal shareholder of the following dealers and advisers:

 

 

Related Registrants*

 

NBC Alternative Investments Inc.

CABN Investments Inc.

National Bank Direct Brokerage Inc.

NBF Securities (USA) Corp. - in the United States only

National Bank Financial Inc.

National Bank Financial Ltd.

Innocap Investment Management Inc.

Natcan Investment Management Inc.

National Bank of Canada Financial Inc. - in the United States only

National Bank Securities Inc.

NBF International S.A. - in Switzerland only

National Bank Trust Inc.

Natcan Trust Company

PI Financial Corp.

Wellington West Capital Inc.

Wellington West Capital Markets Inc.

Wellington West Financial Services Inc.

Wellington West Total Wealth Management Inc.

 

* holding directly or indirectly more than 10% of any class or series of voting securities of these entities.

 

NBCN is therefore related to the above-mentioned registrants. Although there may be overlaps among the directors and officers of these companies, all of these companies are operated as separate legal entities.

 

These entities may, from time to time, cooperate in offering products and services for the benefit of our clients. It should be understood that in such cases, there is no exchange of client information among these companies without a client’s express prior written consent or unless the information is reasonably necessary in order to provide a specific product or service.

 

 

Conflicts of interest of NBCN representatives

 

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

 

The Code of Ethics of National Bank of Canada establishes basic principles by which its employees’ conduct is guided. Among other things, these principles prohibit an employee from:

 

a) using confidential information acquired in the course of or in connection with his or her duties, or exploiting a situation for the purpose of obtaining an advantage of any kind;

b) accepting gifts, entertainment and compensation that could influence decisions to be taken in the course of performing his or her duties; and

c) engaging in activities that could interfere or conflict with his or her duties.

 

NBCN will not permit any of its representatives to engage in activities outside the scope of their duties, including, but not limited to, serving as a director of a company or other entity, without first ensuring that such activities do not compromise the interests of NBCN’s clients.

 

In addition, NBCN ensures that its practices for compensating its representatives are not inconsistent with its obligations to its clients.

 

NBCN also has a Compliance Manual dealing with situations relating specifically to its activities. The manual reiterates that our representatives must never favour their own interests to the detriment of their responsibilities toward clients and NBCN.

 

From time to time, other potential or actual conflicts of interest may arise. NBCN undertakes to continue taking the steps necessary to identify and respond to such situations fairly and reasonably, in keeping with the standard of care to which we are subject in our relationships with our clients.

 

This Statement of Policies respecting conflicts of interest of NBCN will be updated should there be any evolution with respect to material conflicts of interest.

 

OUR PRIVACY POLICY

This document informs you of NBCN’s policies on privacy and the ways that we ensure the protection of your privacy and the confidentiality of your personal information.  This policy applies to NBCN’s individual clients, including persons who carry on business alone or in partnership with other individuals.

 

Collecting Information

When we collect information from you, we will explain what information we collect and how we intend to use it.  This explanation is set out in the NBCN Privacy Agreement, which is included in the documentation you will receive when you open an account with NBCN.

Releasing Information

We will provide your information to other parties: where we have your consent, where the other parties are our suppliers or business partners who provide service to your account, where we are required to permitted to do so by law, and where transfers of our business are involved.

 

 Protecting Information

We will take appropriate steps to protect your information.  We will retain your information as long as it is necessary to service your account or as is required by our industry’s regulations.

 

Providing Access

We will provide you with access to your information upon your request.  We will take reasonable steps to ensure that your personal information is accurate and up-to-date.

Addressing Your Concerns

We will address and respond to any of your concerns about our handling of your information.

 

WHY WE NEED YOUR INFORMATION

We ask for a variety of information when you open an account with us.  Securities industry regulations demand that we obtain a minimum amount of information about you so that we can provide the proper level of service and supervision to your account.  We may also base our recommendations about our products and services to you on the information that you provide to us.  For example, we may use your date of birth to identify you, or to determine your eligibility for products or services, which may be of benefit to a certain age group.  We require your SIN in order to comply with certain Canada Customs and Revenue Agency's reporting requirements.  We may also use your SIN as a means of identifying you.  Industry standards demand that we know your financial information to help us identify products and services which are suitable for you, such as the use of margin in an account.

 

PRODUCTS AND SERVICES

When you provide your consent, we may share your information with other affiliated companies (e.g. National Bank of Canada).  This will help us serve you better by identifying related products and services, which may be of use to you.  Sharing information within the National Bank group of companies will also help ensure that the information we have on file for you is complete and up-to-date.  Your consent to our providing information to other parties is optional and may be withdrawn by you at any time.

 

THIRD PARTIES

With your consent, we may obtain information about you from third parties such as credit agencies.  This information helps us assess your eligibility for certain products and services such as a margin account.  Please remember that if you do not agree to provide your consent for this, we may not be able to extend margin privileges to you.  We may also, with your consent, provide your information to outside sources.  For example, service providers who we hire to do things like process your trades and send your month-end statements to you, will have access to certain account information including your name and address in order to perform their required functions.  We require our third party service providers to sign a Privacy Agreement to help ensure that they will protect the confidentiality of your information.  We are also obliged to provide your information to regulatory bodies within the investment industry.  We may also be required to disclose your information to government agencies or law enforcement agencies, or when we are in receipt of a valid Court Order or search warrant.  We may also disclose your information to outside sources to help us collect a debt owed to us by you.  As well, we may disclose your information as a result of a transfer of our business, should we decide in the future to sell off all or part of our business or to merge with another financial institution.

PROTECTION OF INFORMATION

We have thorough security standards in place to protect your information against unauthorized access and use.  If you access your account through an electronic means (such as My Portfolio), we use passwords that you alone should know.  We also provide training to our employees so they will understand the need for confidentiality when dealing with your information.  We retain your information only as long as we need it to service your account, or as long as industry regulations demand.  When we no longer need your information, we will delete electronic records and destroy physical records.

 

YOUR RIGHT TO ACCESS INFORMATION

Most of your information is in the form of account documentation and transaction records.  You will receive copies of any documents you sign to open your account with NBCN.  You will also receive copies of monthly (or quarterly) statements of your account, which detail all of the transactions that have taken place in your account during that period.  If you have chosen to have access to your account electronically (e.g. through My Portfolio), you may also view your account transactions that way.  If you require further details about your information, you may contact us at any time.  Naturally, we will have to assess your request to ensure that it does not contain references to other persons, or violate our legal privilege.

 

ACCURACY OF INFORMATION

Having accurate information about you will enable us to give you the best possible service.  We expect that you will provide us with updated information when you move or change telephone numbers, or have any other material changes in your information.  If you detect any errors in information (such as the information appearing on your copy of your application form), please let us know immediately.

 

YOUR RIGHT TO WITHDRAW CONSENT

When you sign the documentation required to open your account, you will see that within that documentation is our Privacy Agreement.  By opening an account with us, you are providing your consent for us to collect, use and release your personal information.  If at any time you wish to withdraw this consent, please advise us.  However, please note that withdrawing consent may mean that we will be unable to provide certain services to you.  We will explain the consequences of withdrawing consent, should you choose to do so.

 

ONLINE SERVICES

As mentioned previously in this material, we do offer online services through our web site.  While we may keep records of which web pages you visit while you are in our web site, or what you may download from our web site, we do so for statistical purposes only.  We merely keep track of which pages are visited and do not take or use any personal information from you during your visit to our web site.  When you send us an email, we learn your exact e-mail address as well as any other information you may have included in the e-mail.  While we may use your e-mail address to reply to you, we do not make your e-mail address known to anyone outside our firm.  We may also send certain required information to you via e-mail (such as Shareholder Communication information) if you have requested that we do so.  Again, you may cancel this at any time.  Please keep in mind that information sent via e-mail is generally unencrypted, so we would remind you not to send us confidential information via e-mail.

 

 MAKING A COMPLAINT

As a full-service investment dealer, NBCN Inc. (“NBCN”) offers access to a broad range of investment services. It is therefore important to us to ensure that you feel comfortable contacting us whenever you have a question or comment concerning these services.  However, if your account is managed on a discretionary basis by a registered Investment Counsel or Portfolio Manager, the responsibility for suitability of investments rests with him/her, and not with NBCN. Therefore, in such cases, you must contact your Investment Counsel or Portfolio Manager with respect to any complaint about unsuitable investments or the financial performance of your account.

 

Of course we welcome feedback about all of your experiences concerning your relationship with us, but should you have an unfavourable experience, we value the opportunity to improve our services offered. Your business and on-going relationship with NBCN are very important to us and the satisfaction of our clientele is very high on our list of priorities.

 

Please feel free to contact us via telephone or mail with your questions or comments. We invite you to speak to the Vice-President Compliance or to submit the details of your complaint in writing at the following address:

 

 

In order to allow us to analyse your complaint, please include the following details when you contact us:

·         Your name, contact information, and account number as well as the particular circumstances and details of your complaint, notably, the date on which the event took place.

·         All relevant documentation, including details of meetings and/or discussions following those meetings that might clarify the situation.

 

We will acknowledge the receipt of your complaint in writing within 5 business days, giving you the name and the contact information of the person analyzing the complaint. Should you have any questions concerning the advancement of the file, we invite you to contact this person directly. Rest assured that we will do our utmost to settle your complaint fairly and quickly.

 

We will contact you in writing at the latest 90 days after our investigation begins detailing the results and conclusions of our inquiry as well as the options available to you if the problem has not been resolved to your satisfaction.