Statement of Policies

Transcription

1 Statement of Policies

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3 1 Statement of Policies concerning Conflicts of Interest with Related and Connected Issuers and Related Registrants We, Scotia Capital Inc. (we, us or the firm), are providing this Statement of Policies concerning Conflicts of Interest with Related and Connected Issuers and Related Registrants ( Statement of Policies ) to you, our clients, to disclose to you our activities in respect of securities of related or connected issuers and related registrants. This Statement of Policies is effective as of October 31, 2009 except where otherwise expressly noted. Under certain circumstances we may deal with or for you in securities where the issuer of the securities or another party to the transaction is this firm or a party having an ownership or business relationship with us. Since these transactions may create a conflict or the appearance of a conflict between our interests and yours, we have adopted policies and procedures to assist us in identifying and minimizing any conflicts of interest that may arise. In this Statement of Policies, we describe securities transactions we may enter into that may involve issuers that are related or connected to us or related registrants, our relationships with these entities where conflicts of interest could arise, and we use terms such as related issuer, connected issuer and influential securityholder to describe these relationships. These terms are explained below.

4 2 Related Issuer A person or company is a related issuer to the firm if they are an influential securityholder of the firm, we are an influential securityholder of theirs, or each of us is a related issuer of the same third person or company. Connected Issuer An issuer or selling securityholder is a connected issuer of the firm if they are distributing securities and one of them, or a related issuer of one of them, has a relationship with the firm, a related issuer to the firm, a director, officer or partner employed by the firm, or a director, officer or partner of a related issuer to the firm that may lead a reasonable prospective purchaser of the securities to question if we are independent of the issuer or selling securityholder for the distribution. Influential Securityholder Generally, influential securityholder means a person, company or professional group that, on its own or together with its related issuers, exercises influence over an issuer by being able to direct the voting of more than 20 percent of the votes to determine the directors of the issuer, or controlling or being a partner of the issuer if the issuer is a general partnership or is a general partner of the issuer if the issuer is a limited partnership; or being able to direct the voting of more than 10 percent of the votes to determine the directors of the issuer, and either (i) being entitled to nominate at least 20 percent of the directors or having officers, directors or employees in common with and constituting at least 20 percent of the directors of the issuer or a related issuer; or

5 3 (ii) being entitled to nominate at least 20 percent of the directors of the influential securityholder or having officers, directors or employees in common with and constituting at least 20 percent of the directors of the influential securityholder. Scotia Capital Inc. is required to make certain disclosures where we act as your dealer, advise you, or exercise discretion on your behalf with respect to securities issued or traded by us that are securities of a related issuer or, in the course of a distribution, a connected issuer. Scotia Capital Inc. has a relationship with the issuers listed in this Statement of Policies. Scotia Capital Inc., its directors, officers, partners, sales staff and/or other employees may from time to time recommend that you trade in, or provide to you advice about, or trade on a discretionary basis on your behalf in, or sell or underwrite a security issued by these listed issuers. If you wish further information concerning the relationship between the firm and these listed issuers, please contact us. This Statement of Policies is updated annually and is also provided at the following times and in the following manner: When you open an account with Scotia Capital Inc., we will deliver to you our Statement of Policies, which we will update annually and make available to you on request. This Statement of Policies will also be available through the Scotiabank website. When we participate as an underwriter or as a member of a selling group of securities of a related or connected issuer, we will disclose our relationship to the issuer in the prospectus or other document being used to qualify those securities. When we buy or sell securities of a related or connected issuer for your account, we will disclose our relationship to the issuer in the trade confirmation and monthly account

6 4 statement which we prepare and send to you. When we advise you with respect to the purchase or sale of securities of a related or connected issuer, or we act as a portfolio manager and exercise discretionary authority to purchase or sell securities of a related or connected issuer for your account, disclosure will be made in advance of our giving the advice or exercising our discretion, either through the delivery of this Statement of Policies, the posting of this Statement of Policies on our website, disclosure in the account agreement governing your account (which disclosure will also provide for the client s consent to such transactions) or otherwise. Scotia Capital Inc. may have acted, and is prepared to continue to act, as an adviser, dealer, member of a selling group, or underwriter with respect to securities of its related or connected issuers and to provide the full range of services customarily provided by us in respect of securities of other issuers. We shall carry out such services in the ordinary course of our business in accordance with our usual practices and procedures and in accordance with all applicable disclosure and other regulatory requirements.

7 5 Related Issuers The following is a list of entities that are related issuers of Scotia Capital Inc. or who, by reason of its relationship with The Bank of Nova Scotia ( Scotiabank ) or one of its subsidiaries, may be deemed to be related to Scotia Capital Inc. The Bank of Nova Scotia of Scotia Capital Inc. Automodular Corporation Scotia Merchant Capital Corporation, a subsidiary of The Bank of Nova Scotia, is an influential securityholder of Automodular Corporation. Banco del Caribe (Venezuela) Scotia International Limited, a subsidiary of The Bank of Nova Scotia, is an influential securityholder of Banco del Caribe (Venezuela). BNS Capital Trust BNS Capital Trust issues Scotia BaTS. The Bank of Nova Scotia is the parent company of BNS Capital Trust. CI Financial Corp. The Bank of Nova Scotia is an influential securityholder of each of CI Financial Corp. and of Scotia Capital Inc. As a result, CI Financial Corp. and any related issuer of CI Financial Corp. may be considered a related issuer of Scotia Capital Inc. Accordingly; the following issuers are related issuers of Scotia Capital Inc.: CI Master Limited Partnership Each of the following mutual fund families which are classes of shares of CI Corporate Class Limited: CI funds Harbour funds Signature funds Synergy funds

8 6 Select funds Cambridge funds Each of the following mutual funds which are classes of shares of CI Corporate Class Limited: Short Term Income Corporate Class Canadian Fixed Income Corporate Class Global Fixed Income Corporate Class Real Estate Investment Corporate Class Canadian Equity Small Cap Corporate Class Canadian Equity Value Corporate Class Canadian Equity Growth Corporate Class US Equity Value Corporate Class US Equity Growth Corporate Class International Equity Value Corporate Class International Equity Growth Corporate Class Emerging Markets Equity Corporate Class Enhanced Income Corporate Class US Equity Small Cap Corporate Class Canadian Equity Alpha Corporate Class US Equity Value Currency Hedged Corporate Class US Equity Alpha Corporate Class International Equity Value Currency Hedged Corporate Class International Equity Alpha Corporate Class If the name of the fund readily identifies it as affiliated with CI Financial Corp., the fund may not be separately listed in this Statement of Policies. Additions, deletions or name changes of mutual funds which are classes of shares of CI Corporate Class Limited are not significant changes to the information in this Statement of Policies.

9 7 Crediscotia Financiera S.A. (formerly Banco del Trabajo, S.A.) of Crediscotia Financiera S.A. DundeeWealth Inc. The Bank of Nova Scotia is an influential securityholder of each of DundeeWealth Inc. and of Scotia Capital Inc. As a result, DundeeWealth Inc. and any related issuer of DundeeWealth Inc. may be considered a related issuer of Scotia Capital Inc. Accordingly; as at October 23, 2009 the following issuers are related issuers of Scotia Capital Inc.: Aurion Capital Management Inc. Breakwater Resources Ltd. Celestial Asia Corona Gold Corporation Coro Mining Corp. Dundee Corporation Dundee Precious Metals Inc. Dundee Real Estate Investment Trust Dundee REIT (Convertible Debenture) Dundee Realty Corporation Dynamic Russian Resource Fund Eurogas Corporation Eurogas International Inc. Helio Resources Corp. Iberian MineralsOdyssey Resources Torque Energy Inc. Valdez Gold Inc. Globel Direct Inc. RoyNat Capital Inc., a subsidiary of The Bank of Nova Scotia, is an influential security holder of Globel Direct Inc. Inversiones Financieras Scotiabank El Salvador, S.A. of Inversiones Financieras Scotiabank El Salvador, S.A. Maduro & Curiel s Bank N.V. The Bank of Nova Scotia is an influential securityholder of Maduro & Curiel s Bank N.V.

10 8 Profuturo AFP S.A. Scotiabank Peru S.A.A., a subsidiary of The Bank of Nova Scotia, is an influential securityholder of Profuturo AFP S.A. Scotia DBG Investments Limited Scotia Group Jamaica Limited, a subsidiary of The Bank of Nova Scotia, is an influential securityholder of Scotia DBG Investments Limited. Scotia Group Jamaica Limited The Bank of Nova Scotia is an influential securityholder of Scotia Group Jamaica Limited. Scotia Inverlat Casa de Bolsa, S.A. de C.V. Grupo Financiero Scotiabank Inverlat, S.A. de C.V., a subsidiary of The Bank of Nova Scotia, is an influential securityholder of Scotia Inverlat Casa de Bolsa, S.A. de C.V. Scotiabank Capital Trust Scotiabank Capital Trust issues Scotia BaTS II. and the administrator of Scotiabank Capital Trust. Scotiabank Europe plc of Scotiabank Europe plc. Scotiabank Inverlat, S.A. Group Financiero Scotiabank Inverlat, S.A. de C.V., a subsidiary of The Bank of Nova Scotia, is an influential securityholder of Scotiabank Inverlat, S.A. Scotiabank Peru S.A.A. of Scotiabank Peru S.A.A. Scotiabank Subordinated Notes Trust of Scotiabank Subordinated Notes Trust. Scotiabank Sud Americano, S.A. (Chile) of Scotiabank Sud Americano, S.A. (Chile)

11 9 Scotiabank Tier 1 Trust Scotiabank Tier 1 Trust issues Scotia BaTS III. and the administrator of Scotiabank Tier 1 Trust. Scotiabank Trinidad and Tobago Limited The Bank of Nova Scotia is an influential securityholder of Scotiabank Trinidad and Tobago Limited. The Bank of Nova Scotia Berhad of The Bank of Nova Scotia Berhad. The Bank of Nova Scotia Jamaica Limited of The Bank of Nova Scotia Jamaica Limited. Scotia Offshore Funds The Bank of Nova Scotia may have a direct or indirect controlling interest and may direct voting in the following investment fund manager and mutual fund entities: In Costa Rica, Scotia Sociedad Fondos de Inversión S.A and the mutual fund family known as Fondo de Inversión Scotia In Jamaica, Scotia DBG Fund Managers Inc., and the mutual fund family known as Scotia DBG Fund and the Scotia Caribbean Income Fund In Chile, Scotia Administradora General de Fondos Chile S.A and the mutual fund families known as Fondo Mutuo Scotia and Fondo Mutuo Bandesarrollo In Peru, Scotia Fondos Sociedad Administradora de Fondos S.A and the mutual fund family known as Scotia Fondo In Mexico, Scotia Fondos S.A de C.V., and the mutual fund family known as Scotia Sociedad de Inversión S.A. and the FINDE1, S.A. de C.V., Sociedad de Inversión en Instrumentos de Deuda In the Cayman Islands, the mutual fund family known as Scotiabank Fund. Some

12 10 of the mutual funds in this family of funds are managed by Scotia Asset Management L.P., an affiliate of Scotia Capital Inc. If the name of a fund readily identifies it as affiliated with Scotia Capital Inc., the fund may not be separately listed in this Statement of Policies. Connected Issuers The following is a list of entities that are, or may be deemed to be, connected issuers of Scotia Capital Inc. Hollis Receivables Term Trust The Bank of Nova Scotia acts as administrator of Hollis Receivables Term Trust and Scotia Capital Inc. has acted and may continue to act as underwriter for the trust. Pinnacle Funds and Pinnacle Portfolios A family of funds known as the Pinnacle Funds and Pinnacle Portfolios is managed by Scotia Asset Management L.P., an affiliate of Scotia Capital Inc. Scotia Asset Management L.P. is also a sub-advisor to Scotia Capital Inc. in respect of this family of funds. The name of each of the mutual funds within the Pinnacle fund family includes the word Pinnacle, readily identifying the fund as part of the Pinnacle fund family affiliated with Scotia Capital Inc., and therefore the funds are not separately listed in this Statement of Policies. ScotiaFunds A family of funds known as the ScotiaFunds is managed by Scotia Asset Management L.P., an affiliate of Scotia Capital Inc. Scotia Asset Management L.P. is also a sub-advisor to Scotia Capital Inc. in respect of this family of funds. The name of each of the mutual funds within the ScotiaFunds family includes the word Scotia, readily identifying the fund as affiliated with Scotia Capital Inc., and therefore the funds are not separately listed in this Statement of Policies. In addition, in certain circumstances issuers with whom Scotiabank, Scotia Capital Inc. or

13 11 their related issuers has a business relationship (such as being borrowers from Scotiabank or issuers in which Scotiabank has a significant investment) may be considered connected issuers of Scotiabank. In certain provinces, the issuers listed as connected issuers may be considered to be related issuers of Scotia Capital Inc. because Scotia Capital Inc. has the power to exercise a controlling influence over the issuer s management or policy. Other Related or Connected Issuers The following is a list of entities that are, or may be deemed to be, related issuers or connected issuers of Scotia Capital Inc. The Bank of Nova Scotia, Scotia Capital Inc. or a related issuer may act as administrator of the entity for a fee and certain directors or officers of the entities may be employees of Scotia Capital Inc. Allbanc Split Corp The Bank of Nova Scotia acts as administrator and is an influential securityholder of Allbanc Split Corp. Certain directors and officers of Allbanc Split Corp. are employees of Scotia Capital Inc. Allbanc Split Corp II Scotia Capital Inc. acts as administrator of Allbanc Split Corp II and certain directors and officers of Allbanc Split Corp II are employees of Scotia Capital Inc. B Split II Corp Scotia Capital Inc. acts as administrator and is an influential securityholder of B Split II Corp. Certain directors and officers of B Split II Corp. are employees of Scotia Capital Inc. BNS Split Corp II Scotia Capital Inc. acts as administrator of BNS Split Corp II and certain directors and officers of BNS Split Corp II are employees of Scotia Capital Inc.

14 12 Canadian Resources Income Trust (CaRIT) Scotia Capital Inc. acts as administrator of CaRIT and certain directors and officers of CaRIT are employees of Scotia Capital Inc. Canadian Wireless Trust Scotia Capital Inc. acts as administrator of Canadian Wireless Trust and certain directors and officers of Canadian Wireless Trust are employees of Scotia Capital Inc. Diversified Private Equity Corp Diversified Private Equity Corp. is a holding company administered by Scotia Capital Inc. Certain officers and directors of Diversified Private Equity Corp. are employees of Scotia Capital Inc. Energy Split Corp Scotia Capital Inc. acts as administrator of Energy Split Corp and certain directors and officers of Energy Split Corp. are employees of Scotia Capital Inc. Energy Split Corp II Scotia Capital Inc. acts as administrator of Energy Split Corp II and certain directors and officers of Energy Split Corp. II are employees of Scotia Capital Inc. Kingsway Linked Return of Capital Trust Scotia Capital Inc. acts as administrator of Kingsway Linked Return of Capital Trust. Lifeco Split Corporation Inc. Scotia Capital Inc. acts as administrator and is an influential securityholder of Lifeco Split Corporation Inc. Certain directors and officers of Lifeco Split Corporation Inc. are employees of Scotia Capital Inc. NewGrowth Corporation Scotia Managed Companies Administrators Inc. acts as administrator of NewGrowth Corporation and certain directors and officers of NewGrowth Corporation are employees of Scotia Capital Inc.

15 13 R Split III Corp Scotia Capital Inc. acts as administrator of R Split III Corp and certain directors and officers of R Split III Corp are employees of Scotia Capital Inc. SCITI Trust Scotia Capital Inc. acts as administrator of SCITI Trust and certain directors and officers of SCITI Trust are employees of Scotia Capital Inc. SCITI ROCS Trust Scotia Capital Inc. acts as administrator of SCITI ROCS Trust and certain directors and officers of SCITI ROCS Trust are employees of Scotia Capital Inc. SCITI Total Return Trust Scotia Capital Inc. acts as administrator of SCITI Total Return Trust and certain directors and officers of SCITI Total Return Trust are employees of Scotia Capital Inc. Sixty Split Corp. Scotia Capital Inc. acts as administrator and is an influential securityholder of Sixty Split Corp. Certain directors and officers of Sixty Split Corp. are employees of Scotia Capital Inc. SNP Split Corp. Scotia Capital Inc. acts as administrator and is an influential securityholder of SNP Split Corp. Certain directors and officers of SNP Split Corp. are employees of Scotia Capital Inc. SL Split Corp The Bank of Nova Scotia acts as administrator of SL Split Corp and certain directors and officers of SL Split Corp. are employees of Scotia Capital Inc. Utility Corp. The Bank of Nova Scotia acts as administrator of Utility Corp. and certain directors and officers of Utility Corp. are employees of Scotia Capital Inc.

16 14 Related Registrants Securities laws in Ontario require a dealer which is registered in Ontario and has a principal shareholder, officer or director that is a principal shareholder, officer or director of another registrant, to disclose to its customers the relationship and the policies and procedures adopted to minimize the potential for conflicts of interest resulting from the relationship. The following is a list of registrants under the Ontario Securities Act which are owned, directly or indirectly, by The Bank of Nova Scotia: CPA Securities Inc. (as of December 18, 2009) RoyNat Capital Inc. Scotia Asset Management L.P. Scotia Capital (USA) Inc. Scotia Capital Inc. Scotia Securities Inc. Scotia Waterous Inc. In addition, the following is a list of registrants under the Ontario Securities Act in which Scotia Capital Inc. or The Bank of Nova Scotia has an ownership interest: Alpha ATS L.P. CanDeal.ca Inc. Integra Capital Corporation ScotiaMcLeod, Scotia Direct Investing and Scotia itrade are divisions of Scotia Capital Inc. ScotiaMcLeod Direct Investing and TradeFreedom are services of Scotia Direct Investing, a division of Scotia Capital Inc. Although Scotia Capital Inc. is under common ownership with the other registrants and may from time to time have directors and officers in common with the other registrants, Scotia Capital Inc. is a separate and distinct corporate entity. Scotia Capital Inc. generally carries on its securities underwriting, sales, trading, research and other activities independent of the other

17 15 registrants owned by Scotiabank. However, from time to time there may be certain cooperative business arrangements between it and the other registrants, such as arrangements relating to introduction of clients, distribution of products, advisory relationships, or administrative support. In addition to applicable regulatory provisions and contractual provisions respecting any business arrangements that may exist between Scotia Capital Inc. and the other registrants, the directors, officers and employees of each of the registrants are subject to Guidelines or Codes of Conduct governing their actions. These Guidelines are supplemented by our internal compliance policies and procedures. Scotia Capital Inc. has representation on the Board of Directors of the general partner of Alpha ATS L.P. ( Alpha ATS ), the general partner of the sole limited partner of Alpha ATS, and certain of the other registrants listed above. Scotia Capital Inc. is also a limited partner of the sole limited partner of Alpha ATS and has an ownership interest in its general partner. Alpha ATS is a marketplace in Canada for the trading of securities. Scotia Capital Inc. s ownership interests in the limited partner of Alpha ATS and its general partner are related to Scotia Capital Inc. s share of trading activity executed on Alpha ATS, and its ownership interests are subject to redetermination at the end of each of the first two years of Alpha ATS s launch. Scotia Capital Inc. may execute trades on your behalf on Alpha ATS and may enter orders which are not immediately tradable into Alpha ATS s order book unless you instruct us to direct your order to a different marketplace. Securities regulations and Scotia Capital Inc. s internal policies require that we adhere to certain trading rules, including the requirement to diligently pursue best price and best execution of each client order on the marketplace, and these obligations and requirements override any interest of Scotia Capital Inc. in Alpha ATS.

18 16 Scotia Capital Inc. is a member of CIPF. Scotiabank, Scotia, ScotiaFunds, ScotiaMcLeod, Scotia Direct Investing, Scotia itrade, Scotia Asset Management, and Scotia Capital are registered or unregistered trademarks of The Bank of Nova Scotia. Scotia Capital Inc. is an authorized user of the registered and unregistered trademarks of The Bank of Nova Scotia. TM Trademark of The Bank of Nova Scotia. Scotia Capital Inc. is an authorized user of the mark.

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