National Instrument 31-103 requires registered firm to disclose information that a reasonable investor would expect to know about the client’s relationship with the registered firm, including any material conflicts the firm or its representatives may have with a client. These rules require registered firms to make this disclosure to clients prior to recommending any trades.
Pathfinder Asset Management Limited (PAML) owns a 48.5% interest in Intrynsyc Capital Corporation (Intrynsyc) an exempt market dealer. PAML may participate in securities transactions offered by Intrynsyc where Intrynsyc receives compensation from the issuer of the security. Intrynsyc may also sell units of PAML Funds or refer clients to PAML. In this case a fee may be paid by PAML to Intrynsyc. Paying of fees can result in situations where conflicts of interest arise between the client and PAML. PAML has procedures in place to ensure that this risk is mitigated and that client interests are placed first.
PAML, as a portfolio manager and an investment fund manager, may buy, sell or hold securities of an issuer in which its directors have invested, hold directorships, or hold executive officer positions with the issuer. Douglas Johnson is the majority shareholder, Director, and Chief Executive Officer of PAML. Douglas Johnson holds PAML shares through Canfund Ventures Corporation, which is 100% owned by Douglas Johnson. Canfund Ventures Corporation may, from time to time, provide advisory services to Issuers of which PAML may buy, sell or hold securities.
Specifically, PAML directors, have invested, hold directorships or hold executive officer positions with the issuer in the following companies:
- BioDE Ventures Ltd. (Private) +10% ownership
- BioHEP Technologies Ltd. (Private) +10% ownership
- Carrus Capital Corporation (Public) +10% ownership
Fees: In addition to the Pathfinder Asset Management Limited money management fee, each custodian charges fees for holding client assets. This can range from a monthly custody fee charged to your account to a combination of a monthly custody fee and/or an allocation fee for each trade (much like a discount brokerage fee). In addition, each Pathfinder Fund has an expense ratio which includes fees required to operate the fund – for example, fund administration fees, audit fees and trustee fees. Depending on the size of the fund, these fees will vary as a percentage of assets; therefore, Pathfinder caps the maximum annual administration fee at 0.5% of assets.
Broker selection. Pathfinder Asset Management Limited (Pathfinder) may transact business on your behalf through such brokers, dealers, agents, delegates and nominees as Pathfinder may select. When placing orders with brokers and dealers, Pathfinder will seek to obtain the best price and terms for the Portfolio in accordance with Pathfinder’s policy on broker selection (best execution) attached hereto as Schedule A and applicable laws. In the event that you direct Pathfinder to use a particular broker or dealer to effect transactions for the Portfolio, you acknowledge that commission rates may not necessarily be as favourable as Pathfinder may have otherwise been able to obtain from a broker or dealer selected by Pathfinder. Pathfinder may in the course of providing services under this agreement enter arrangements with brokers or other third parties involving the use of brokerage commissions generated by client accounts (or “soft dollars”). These arrangements will only be entered in accordance with Pathfinder’s policies regarding the use of the brokerage commissions paid by clients as described in Schedule A. Pathfinder will, in seeking best execution and entering arrangements involving the use of brokerage commissions, comply with all applicable laws, including National Instrument 23-101 (Trading Rules) and National Instrument 23-102 (Use of Client Brokerage Commissions). Pathfinder may amend its policies with respect to best execution and arrangements involving the use of brokerage commissions without notice to you but will provide a copy of its policies to you on request.
Broker Selection (Best Execution) Policy
Pathfinder has an obligation to our clients to obtain the best price and terms for trades made on behalf of accounts managed by us. The goal of this policy is to document the procedures we intend to follow to comply with this obligation.
We select brokers to execute trades on behalf of the accounts we manage based our assessment of the following factors:
- The quality of execution services provided by the broker, including whether our orders are filled in accordance with our instructions and the speed with which the orders are filled.
- The commissions charged by the broker.
- The ability of the broker to execute a trade.
- The ability of the broker to complete a trade at our price.
- The ability of the broker to provide confirmations on a timely basis.
- The quality of the research provided by the broker.
We will take into consideration these factors in determining which brokers to deal with. We will review annually the brokers we use in light of the factors listed above. We do not use brokers that are affiliated with us.
Use of client brokerage commissions – We may direct brokerage transactions for clients to brokers in return for the research and brokerage services provided by the brokers, and in certain circumstances may, in recognition of the value of these services, pay broker commissions to these brokers in excess of the commissions which another broker might have charged for effecting the same transactions. We will determine in good faith that the value of any services received is reasonable in relation to the commission paid, either in terms of the particular transaction or our overall responsibilities to clients. If we use a particular broker (whether the broker was selected by us or by a client that has directed us to use that broker) to execute securities transactions for a client account that also provides research to us, the research received by us in this manner will from time to time be used in servicing any or all of our clients’ accounts, including client accounts that did not generate the credits used to obtain the research.
Research provided by brokers may include information on the economy, industries, groups of securities, individual companies, statistical information, accounting and tax law interpretations, political developments, legal developments affecting portfolio securities, technical market action, pricing and appraisal services, credit analysis, risk measurement analysis, performance analysis, and measurement and analysis of corporate responsibility issues. These research services are typically received in the form of written reports, telephone contacts and personal meetings with security analysts. Research services may also be provided in the form of access to various computers software and associated hardware, and meetings arranged with corporate and industry representatives.
We will, in seeking best execution and entering arrangements involving the use of brokerage commissions, comply with all applicable laws, including National Instrument 23-101 (Trading Rules) and National Instrument 23-102 (Use of Client Brokerage Commissions).
Upon request, we will provide clients with the names of any brokers or other third parties that have provided us with good or services, other than order execution services, in return for client brokerage transactions.
All assets in the Account will be held by: 1. Credential Qtrade Securities Inc. or Fidelity Clearing Canada ULC – IIROC regulated dealer firms – as custodian, in stock brokerage account(s) or 2. RBC Investor & Treasury Services – a Canadian chartered bank – as prime broker, in prime brokerage account(s). The Custodian/Prime Broker is independent of PAML. The Custodian/Prime Broker is a domestic Canadian Custodian/Prime Broker and will hold all of your assets in Canada. Your assets are held in investment account(s) in your name with the Custodian similar to investment account(s) at IIROC regulated dealer firms or held in prime brokerage account(s) in your name with the Prime Broker. The Custodian/Prime Broker is a member of the Canadian Investor Protection Fund (CIPF)/Canada Deposit Insurance Corporation (CDIC). CIPF/CDIC provides protection to clients as a result of the insolvency of the Custodian/Prime Broker. The risks of a Canadian Custodian/Prime Broker include foreign exchange to trade foreign assets and holding foreign assets further away from the foreign market they trade in. PAML has access to your assets via the full discretionary management authority. PAML’s service agreement with the Custodian/Prime Broker does not prohibit them from using sub-custodians/sub-prime brokers. The Custodian/Prime Broker will credit the Account with dividends and interest paid on securities held in the Account and with principal paid on called or matured securities, in accordance with the Custodian’s/Prime Broker’s customary practices. The Custodian/Prime Broker may hold all certificates and other evidence of investments made on behalf of the Client at the offices of the Custodian/Prime Broker or at any acceptable depositary. For further custodian disclosures about audit rights and CIPF/prime broker disclosures about audit rights and CDIC, please visit the following sites: qtrade.ca and cipf.ca/rbcits.com and cdic.ca.
Nothing contained on this website constitutes a solicitation or offer by Pathfinder Asset Management Limited (PAML) to buy or sell any securities, futures, options or other financial instruments, nor shall any such security be offered or sold to any person in any jurisdiction in which such offer, solicitation, purchase, or sale would be unlawful under the securities laws of such jurisdiction. Neither the information, nor any opinion, contained on this website constitutes tax, legal, insurance or investment advice. This website and the publications herein are intended only to convey information. It is not to be construed as an investment guide or as an offer or solicitation of an offer to buy or sell any of the securities mentioned in it. The author has taken all usual and reasonable precautions to determine that the information contained in this website has been obtained from sources believed to be reliable and that the procedures used to summarize and analyze such information are based on approved practices and principles in the investment industry. However, the market forces underlying investment value are subject to sudden and dramatic changes and data availability varies from one moment to the next. Consequently, neither the author nor PAML can make any warranty as to the accuracy or completeness of information, analysis or views contained in this website or their usefulness or suitability in any particular circumstance. You should not undertake any investment or portfolio assessment or other transaction on the basis of this publication, but should first consult your portfolio manager, who can assess all relevant particulars of any proposed investment or transaction. Thus, decisions based on information contained on this website are the sole responsibility of the visitor. In exchange for using this website, the visitor agrees to indemnify and hold PAML, its officers, directors, employees, affiliates, agents, licensors and suppliers harmless against any and all claims, losses, liability, costs and expenses (including but not limited to attorneys’ fees) arising from your use of this website, from your violation of these terms or from any decisions that the visitor makes based on such information. The information and services provided on this website are provided “as is” and without warranties of any kind, either expressed or implied. PAML does not warrant the accuracy or completeness of the information, text, graphics, links or other items contained on this website and does not warrant that the functions contained in this website will be uninterrupted or error-free, that defects will be corrected, or that the website will be free of viruses or other harmful components. PAML disclaims all liability for errors and omissions in the materials on this website and for the use or interpretation by others of information contained on the website. PAML and its affiliates may collectively beneficially own in excess of 10% of one or more classes of the issued and outstanding equity securities mentioned in this website. PAML and the author accept no liability of whatsoever kind for any damages or losses incurred by you as a result of reliance upon or use of this publication in contravention of this notice.