Conflicts of Interest
Below is a list of potential conflicts, and the primary methods we use to manage them.
- We endeavour to be fully transparent on fees and commissions and fully inform you in advance so that you know what you will be paying
- We offer a wide variety of pricing options to choose from
- We do not engage in “tied selling”, which is prohibited by regulation
- We have policies and procedures prohibiting recommendations solely for the purpose of generating revenue for us without benefit to you
We would like you to use more services offered by members of the Scotiabank group of companies and buy more of the products offered by other members of Scotiabank.
- Referral arrangements are disclosed and operated in accordance with regulatory standards
- We have policies and procedures prohibiting recommendations solely for the purpose of generating revenue for us without any benefit to you
- fee-based accounts
- managed accounts, and
- similar products such as no-load mutual funds, which have pricing structures designed to reduce commission incentives
- Our compensation is disclosed to you and we offer pricing alternatives intended to reduce the conflicts associated with commission based pricing
- We are obliged by industry regulations and firm policy to make only suitable investment recommendations
We may receive compensation from securities issuers and other third parties based on selling you their products
These may be in the form of "trailer fees" on mutual funds and commissions and "trailer fees" on segregated funds and insurance policies.
- We disclose to you the situations and type of third party compensation we may receive. Please refer to our Terms and Conditions Brochure.
- Securities regulations require issuers to provide specific disclosure in the offering document (e.g. prospectus) of such arrangements and the compensation we will receive.
This may include interest spreads on uninvested cash deposits with us and foreign exchange spreads when you convert currencies.
- Various forms of other compensation we may receive are disclosed to you
- Please refer to other sections of this document and our other disclosures to you in that regard
- We will tell you whether we acted as principal or agent for each transaction on the trade confirmation
- In the case of fixed income securities, which we always sell as principal, we provide you with a stated yield to maturity so you can assess the competitiveness of our pricing
- We are required by regulation to disclose this when we make a recommendation to you
- We inform you whether a transaction involved a related or connected security on the trade confirmation
- Our advisors receive the same commission compensation payout as a percentage of gross revenue regardless of the product originator
All of our related parties are disclosed in the Scotia Capital Inc. Statement of Policies.
We have discretion or control over transactions in your account if it is a managed account or pooled investment fund.
- Regulations require that we disclose and obtain your specific approval to purchase related and connected securities when we have discretionary power to do so
- Investment funds are subject to stringent conflict of interest requirements and oversight mechanisms
- We have a “fair allocation” policy for managed accounts and pooled investment funds
- For non-discretionary accounts, individual advisors make the determination based on individual client relationships
We are paid by issuers of securities when we advise on or underwrite a new issue which we may recommend to you.
- We have structurally segregated our institutional corporate finance and retail advisory businesses, which prevents the sharing of non-public information by our institutional corporate finance business (with the relationship with the issuer) with our retail advisory businesses (with the relationship with clients like you)
- The offering documents provide full disclosure of all relationships we may have with the issuer
When we advise on or underwrite a new issue, we are acting for the issuer who wants to obtain the highest price while recommending it to purchasers who are interested in the lowest price.
- As noted above, we operate our corporate finance and retail advisory businesses separately and all relationships and other material facts about our relationship with the issuer are described in the offering documents
If you hold an applicable security, we may be paid by issuers, offerors or others to solicit your proxy or vote in respect to takeover bids, corporate reorganizations, solicitation of proxies, etc.
- Securities regulations require specific disclosure of such arrangements and the compensation we will receive in documents such as information circulars, takeover bid circulars and issuer bid circulars
We may know confidential information as a result of business relationships with issuers of securities, which we cannot disclose to you when recommending those securities.
*Even if that information might lead us not to recommend buying the securities
- As noted above, we operate our corporate finance and retail advisory business separately so that such information is tightly controlled and not shared by corporate finance with our retail advisory businesses
- Our internal information barriers are designed to ensure regulatory requirements are complied with and retail advisory employees do not have access to any non-public information that may be available to our corporate finance businesses
Our other relationships with issuers of a security may mean we directly benefit from you buying the issuer's securities, such as when the issuer is using the funds to repay or secure a loan to us.
- Confidential information which cannot be publicly disclosed is protected through internal information barriers so that it is not shared and does not influence any retail advisory activities
We provide investment research on securities of companies which may have other business relationships with us.
- We maintain information barriers between our corporate trading activities and retail advisory business
- Firm and employee trades are identified as such and client trades are given priority to firm and employee trades in accordance with industry “client priority” regulations
This includes electronic communication networks, market makers and exchanges in connection with trades on markets we direct to such destinations through affiliates or directly. In addition, we have an ownership interest in a marketplace called TMX Group.
- Industry regulations dictate our best price and best execution obligations to you
- We disclose to you our ownership interests in marketplaces and policies and procedures for order routing