In the normal course of their activities, 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 Conduct, a Compliance Guide and internal
policies. Among other things, these documents state that our employees
must never put their own interests ahead of their responsibilities
towards clients or NBIN and that they should not under any
circumstances exert undue pressure on clients to acquire a product or
service. These documents also reinforce the fact that any existing or
reasonably foreseeable material conflict of interest must be addressed
in a manner that is fair, equitable, transparent, and in the clients’
best interests.
Here are some highlights from these documents:
a) 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 that would compromise
confidential client information.
b) Gifts, entertainment and compensation: Employees are
prohibited from accepting gifts, entertainment or compensation that
could influence decisions they make in the course of performing their
duties and to compromise or give the impression of compromising their
independence. All decisions must remain objective and impartial, in
the best interests of clients. 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.
c) Outside 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 activities
outside the scope of their duties without our prior approval and
without ensuring that these activities do not compromise our clients’
interests or harm our own reputation or that of the industry.
d) Client best interests (client priority rule): The interests
of clients must always be given priority over those of NBIN and its
employees. When we receive two orders for the same security at the
same price or better price, we always execute the client’s order
before our or our employee’s order. Please visit our nbin.ca website
to access NBF’s Best Execution Policy.
e) Payment of order execution and research services through
brokerage fees (“soft dollars”): Under the National Instrument
23-102 – Use of Client Brokerage Commissions, specific requirements
apply to advisors and registered dealers if brokerage commissions are
charged in relation to a client account over which an advisor has
discretion to make investment decisions without requiring the express
consent of the client, including investment fund and a managed
account. As a registered dealer, NBIN will not accept or forward to a
third party any portion of client brokerage commissions in return for
the provision to an advisor of goods or services, other than order
execution goods and services and research goods and services.
f) Personal investments: Our employees’ personal investments
are subject to the NBIN Personal Trading Policy and are supervised to
ensure compliance with regulatory requirements. Employees are
forbidden to make personal investments based on confidential
information held by NBIN.
g) Referrals: On occasion, third parties may refer clients to
us for our products and services. When these referrals involve a
commission, the commission must comply with the 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. Any agreement must be made in the best interests of clients
and not for the purpose of receiving a commission.
h) Compensation and other benefits: We are compensated for the
business we perform for our clients. The level of compensation varies
depending on the products and services offered as well as the type of
remuneration. In order to oversee these practices and ensure the
absence of conflicts of interest, several controls are in place. Here
are some examples of how compensation could lead to a conflict of
interest, and how we avoid such conflicts:
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Compensation and benefits from issuers: Issuers of securities
or other related parties may compensate us based on the sale of
their securities to our clients. Issuers can also pay or reimburse
us for certain costs (e.g. educational events, sales communications,
conferences, seminars, etc.), allow us to attend conferences or
seminars, and provide us with promotional items of minimal value.
Regulations surrounding these sales practices are very strict and
only benefits that meet these conditions will be accepted.
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Currency and interest rates: On occasion, we may be
compensated indirectly. For example, in a foreign currency exchange,
we will 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 are also compensated based on the difference
between the interest rate we receive on invested funds and the
interest rate actually paid to our clients.
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Marketplaces: We may receive compensation based on the
marketplace or third-party provider we use to carry out our clients’
transactions. Regulations control the conditions under which we
carry out our client transactions and we comply with NBF’s Best
Execution Policy.
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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.
