Client Relationship Disclosure
• Documents you will receive once you open your account;
• The fees and charges associated with your account;
• Reports you will receive related to your account;
• How we manage conflicts of interest; and
• How you can resolve any issues you may have with your account.
FIN-XO has entered into an agent agreement with CJ International Group Inc. (CJI), a Quebec registered entity specializing in investor immigration. This agreement constitutes a referral arrangement between FIN-XO and CJI. Please refer to the FIN-XO Relationship Disclosure Document for the Québec Immigrant Investor Program for details.
YOUR ACCOUNT DOCUMENTATION
At the time of account opening, you will complete a Client Application Form (CAF).
Securities regulations effective December 31, 2021 require FIN-XO to ask you for the name and contact information for a person that you trust, who is mature, has the ability to communicate and engage in potentially difficult conversations about your personal situation and preferably is not involved with making decisions with respect to your account (Trusted Contact Person or TCP) at account opening and on a periodic basis.
If applicable in your particular circumstances, we may, in our sole discretion, contact your TCP or your legal representative on file with us, if we notice signs of financial exploitation or if you exhibit signs of diminished mental capacity for decisions involving financial matters relating to your account. FIN-XO may also contact your TCP to confirm your contact information if we are unsuccessful in contacting you after repeated attempts, particularly if failure to contact you is unusual. We may ask the TCP to confirm the name and contact information of a legal representative (e.g. attorney under a power of attorney or a legal guardian). You can change your TCP by contacting us at email@example.com.
You have agreed to (i) notify the TCP that you have identified them as your trusted contact, and advise us if they decline to serve as your TCP; and (ii) release us from all claims that relate to any decision we make regarding whether or not to contact the TCP, in your personal circumstances, and any information that we may share with the TCP.
If FIN-XO has a reasonable belief that you are being financially exploited or that you are experiencing diminished mental capacity which may affect your ability to make decisions involving financial matters relating to your account, we may place a temporary hold on your account or a particular transaction. We will provide you with a verbal or written notice explaining our actions, in addition to contacting your TCP, if any, as above.
• Your Relationship Disclosure Document for the Québec Immigrant Investor Program, which includes an acknowledgement that you received your account documentation.
• Canadian Investors Protection Fund (CIPF) brochure
• Brochures issued by the Investment Industry Regulatory Organization of Canada (IIROC) (now CIRO):
o How IIROC Protects Investors
o Making a Complaint - A Guide for Investors - Part 1 of 2
o How Can I Get My Money Back? A Guide for Investors – Part 2 of 2
INVESTMENT SUITABILITY ASSESSMENT
FIN-XO must assess the suitability of any investments for your account before making a recommendation to you and before conducting any trade. The factors guiding FIN-XO in assessing the suitability of your investments include what FIN-XO believes to be your current situation regarding:
• Your personal circumstances – your age, marital status, number of dependents, occupation, employer and whether you are an insider or a significant shareholder of any specific entity.
• Your current financial situation – your assets (including your sources of income) relative to your debts: FIN-XO will evaluate the value of the transaction being considered in light of the net value of your assets (assets minus debts).
• Your investment knowledge and experience – this will be evaluated based on your past experience and on your own assessment of your knowledge of certain products and of the risks associated with investment products and complex investment strategies.
• Your investment needs and objectives – these are your specific financial objectives as provided to us, such as your wish to protect your investments (avoid loss of capital), increase your revenue or your capital via market growth.
• Your risk profile - risk profile involves your risk tolerance, being your comfort level if faced with the possibility of losing part of your money, even if you have many years in which to invest and save and your risk capacity, which is a more objective assessment on your financial ability to absorb any losses, given your personal and financial circumstances.
• Your time horizon – this is the period of time from when you provide the information to us until you will require all or part of your capital, whether to buy a property, retire, or for any other purpose.
FIN-XO must put your interests first in making any recommendation or taking an investment action for your account.
Account statement – We will send you a monthly account statement whenever there is activity in your account, no later than the 15th day of the following month. Monthly statements are issued if your account has activity other than dividend, interest and systematic plans. If there is no such activity in your account, an account statement will be sent on a quarterly basis. The type of account you have is clearly identified as well as all of the securities and their market value, and an itemized list of all trades conducted in the account during the time period. It is your responsibility to closely examine each account statement and to inform us of any error or omission within 30 days of the date printed on the statement or the day we deem you to have received them, whichever is earlier. If you do not contact us within this time, you confirm and approve each transaction listed in the account statement as well as the completeness and accuracy of all other information in the account statement.
Book Values - Your monthly or quarterly statement will show the market value of the security based on either the last available market value/net asset value for the security or the book value of the security.
Annual fees and compensation report - This report summarizes the amounts we received to service your account over the past year. A portion of this sum is paid as remuneration to FIN-XO and CJI.
FIN-XO is committed to putting the interests of our clients above all else. In addition, as a securities brokerage firm and member of CIRO, we must effectively address any situation which may give rise to a conflict of interest. We must do this in your best interest. We have described our conflicts of interest and how we manage them below.
FIN-XO Securities Inc. (FIN-XO, we or our) offers a wide range of products and services to individuals, companies and institutional investors. In the context of our varied activities, we are committed to ensuring that the interests of our clients always have precedence. Moreover, as an investment dealer and member of CIRO, we must ensure effective management of any situation which could give rise to a conflict of interest. We seek to manage conflicts of interest in the best interests of our clients.
A conflict of interest arises when the interests of different persons, particularly your interests and those of FIN-XO or one of our Employees (which includes our administrators, managers, associates, staff, or agents) or Investment Advisors (which includes our mandataries) are incompatible or divergent. Situations may arise that may influence or be perceived to influence FIN-XO or one of our Employees or Investment Advisors to act in their own interests or those of a related entity and not in the client’s best interest.
Accordingly, conflicts of interest may occasionally arise between you and:
• FIN-XO or you and your Investment Advisor;
• other clients whom we represent; or
• a person or company with whom we have a relationship.
We have adopted policies and internal procedures to effectively address conflicts of interest in the client’s best interest. Canadian securities laws require us to take reasonable steps to identify and respond to material conflicts of interest in your best interest. We are also required to tell you about them, including how the conflicts might impact you and how we address them in your best interest.
We have policies and procedures in place to address how we will manage material conflicts of interest in your best interest, which are described below:
• FIN-XO will always seek to act fairly, honestly and in good faith with you and our clients. To this end, we avoid material conflicts of interest that we cannot effectively address and conflicts that are prohibited by law. We have adopted policies and procedures to identify and address all remaining material conflicts in your best interests. We maintain standards directed to ensuring fairness for clients. Each director, officer, employee and Investment Advisor of FIN-XO shall, as applicable:
a) Use their best efforts to mitigate any conflicts of interest between themselves, FIN-XO and clients, and inform clients of any material conflict of interest that might impair their ability to render unbiased and objective advice with respect to investment opportunities.• We avoid conflicts prohibited by law as well as material conflicts that we cannot effectively manage in your best interest. Some conflicts cannot be avoided. In situations in which we do not or cannot avoid conflicts and in which our interests may compete with yours, your interest is always put first.
b) Strive toward a high standard of ethical business and personal conduct, integrity and professionalism in adherence to the iA Financial Group Code of Business Conduct; and
c) Comply with FIN-XO Policies and Procedures and review and attest to these policies and procedures annually.
• We control or manage acceptable conflicts by physically separating different business functions, restricting the internal exchange of information, whether in person or electronically, reducing the possibility of one part of our organization unsuitably influencing another, removing the financial incentive of an Employee or Investment Advisor to favour a particular product or service over another that may be more suitable, and establishing and continuing testing of our operational review and approval processes.
We are a wholly owned indirect subsidiary of iA Financial Corporation Inc. (iA Financial Corporation). Our relationship to iA Financial Corporation and its other financial services subsidiaries (the iA Financial Group) creates conflicts of interest when we provide products and services to you that are sourced from or provided by other members of the iA Financial Group.
iA Financial Corporation and its various financial services subsidiaries, including FIN-XO, are commercial businesses that seek to maximize profits while providing fair, honest and appropriate services to clients. This means that we may encourage you to do more business with us and the other members of the iA Financial Group, and we may engage affiliates to provide us with products and services for your account, but will always do so in a way that we consider to be in your best interest. We will only enter into these transactions or arrangements where we are permitted under applicable securities laws and where we believe they are in your best interest.
Although FIN-XO is under common ownership with the other members of the iA Financial Group and may from time to time have directors and officers in common with these other firms, FIN-XO is a separate and distinct corporate entity.
Any relationships that a FIN-XO director or officer might have with another iA Financial Group entity do not raise material conflicts as none of the individuals is in a position to personally influence clients of FIN-XO to invest in any of the investment products of the iA Financial Group, nor are they compensated by any of the iA Financial Group entities on a commission or other basis that could result in decisions being made, or influence being exerted, against the interest of any of our clients.
In addition to applicable regulatory provisions and contractual provisions respecting any business arrangements that may exist between FIN-XO and the other iA Financial Group entities, the directors, officers, Employees and Investment Advisors of each of the firms are subject to iA Financial Group’s Code of Business Conduct governing their actions, in addition to our internal compliance policies and procedures.
FIN-XO generally carries on its activities independently from the other firms owned by iA Financial Corporation. However, from time to time there may be certain cooperative business arrangements between it and the other firms, such as arrangements relating to introduction of clients, distribution of products, advisory relationships or administrative support.
The conflicts described in this section raise perceptions that FIN-XO will favour the business interests of the various members of the iA Financial Group, rather than your interests. These conflicts and the methods used to manage them will always be in the client’s best interest as described below.
The following iA Financial Group entities provide services to you and/or FIN-XO:
< iA Clarington Investments Inc. manages the iA Clarington family of investment funds, which FIN-XO Investment Advisors may recommend as investment options for your accounts with FIN-XO.
< Industrial Alliance Investment Management Inc. is the portfolio manager of the iA Clarington family of investment funds.
< FIN-XO Investment Advisors may be licenced as insurance agents with PPI Management Inc. and may recommend that you acquire insurance and insurance products, such as segregated funds, provided by Industrial Alliance Insurance and Financial Services Inc.
Investments in Related and Connected Issuers
Under certain circumstances, FIN-XO may cause your account to invest in securities in which the issuer of the securities or another party to the transaction is 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 in identifying and minimizing any conflicts of interest that may arise.
iA Financial Corporation is a publicly traded company with securities listed on the Toronto Stock Exchange and as such it is a related issuer to FIN-XO. The iA Clarington investment funds are all related and connected issuers to FIN-XO. For a full list of the related and connected issuers to the firms within the iA Financial Group, please visit: www.fin-xo.com/statement-of-policies.
Compensation of Investment Advisors: We may compensate our Investment Advisors by a combination of one or more of the following:
• base salary;
• compensation based on the value and/or types of assets under administration;
• bonus based on various performance criteria; and
• percentage of sales commissions, spreads, and trailer fees received by FIN-XO.
Advisors may also receive compensation or benefits based on referrals to other members of the iA Financial Group. When assessing the overall performance of our Advisors, we may consider referrals and/or include referrals as a part of the overall sales/revenues of the Investment Advisor.
We address the conflicts inherent in the compensation and incentives received by our Investment Advisors by ensuring that the compensation paid and incentives provided, rewards our Investment Advisors in putting your interests first ahead of their own.
Different products may have differing levels of compensation, and different account types (fee-based and transactional) may have differing fees. Our compensation plans do not incent our Investment Advisors to recommend specific products or services, including any particular type of account. Where both transactional and fee-based accounts are available, we regularly review whether a fee-based account is appropriate, given your circumstances and investment needs and objectives. Further, to avoid duplicate fees being charged in fee-based accounts, products with embedded commissions will be excluded from your assets for the purpose of calculating fees.
Outside Activities: At times, our executives and Investment Advisors may participate in outside activities such as participating in community events, pursuing personal outside business interests or serving on a board of directors of a charity. The Investment Advisor’s outside activities could cause the Investment Advisor to put such interests ahead of yours. To address this conflict of interest, we have policies and procedures to review any proposed outside activities to ensure that conflicts of interest do not exist, are not likely to exist in the future or can be mitigated in a manner that is consistent with the best interest of our clients; otherwise, the proposed outside activities must be avoided. Before engaging in any outside activity, our policies require these individuals to disclose situations where a conflict of interest may arise and to determine how such conflicts may be addressed. Our Employees and Investment Advisors may only engage in such outside activities if approved by their supervisor. The approval may be subject to terms and conditions that help address perceived or actual conflicts of interest. Our Employees and Investment Advisors are also required to annually confirm their outside activity to their supervisors to ensure accuracy and completeness.
Gifts and Entertainment: FIN-XO Employees and Investment Advisors may from time to time receive offers of gifts and/or entertainment from business partners. We could be perceived to be financially motivated to put our interests ahead of your interests because of the gifts and entertainment. To address this conflict of interest, FIN-XO Employees and Investment Advisors are not permitted to accept gifts or entertainment beyond what is permitted by FIN-XO policies and procedures and applicable laws. We set maximum thresholds for permitted gifts and entertainment to avoid any perception that the gifts or entertainment will influence decision-making.
Personal Trading: Our policies and procedures and the iA Financial Group’s Code of Business Conduct require our Employees and Investment Advisors to act in accordance with applicable laws that prohibit insider trading, front running and similar conduct. Individuals may be required to obtain prior approval before making trades in their personal securities accounts. Our Employees and Investment Advisors are prohibited from accessing non-public information for their direct or indirect personal benefit. We place securities on a “restricted list” to avoid trading when we have non-public information.
Personal Dealings with Clients: Conflicts of interest can arise where our Investment Advisors have personal financial dealings with you, such as acquiring assets outside of your investing relationship, borrowing money from or lending money to you, or exercising control over your financial affairs. To address these conflicts, FIN-XO has policies and procedures in place which prohibit personal financial dealings with clients who are not family members.
Referral Arrangements: As indicated above, there is a referral arrangement between FIN-XO and CJI. In addition, other referral arrangements may exist between FIN-XO and other iA Financial Group members and/or other regulated/non-regulated entities. A referral arrangement happens when a prospective client is referred to or from FIN-XO by a party and that party or FIN-XO may receive a referral fee. The purpose of referrals is to introduce our clients or potential clients to qualified persons who are best suited to help clients achieve their financial objectives.
• the name of each party to the referral arrangement;
• the purpose and material terms of the referral arrangement, including the nature of the services to be provided by each party;
• any material conflicts of interest resulting from the relationship between the parties to the referral arrangement and from any other element of the referral arrangement, including a description of:
· The nature and extent of the conflict of interest;• the method of calculating the referral fee and, to the extent possible, the amount of the fee; and
· The potential impact on and risk that the conflict of interest could pose to the client; and
· How the conflict of interest has been, or will be, addressed;
• the category of registration of each registrant that is a party to the agreement, with a description of the activities that the registrant is authorized to engage in under that category and, giving consideration to the nature of the referral, the activities that the registrant is not permitted to engage in.
Sharing of office premises: Industrial Alliance Insurance and Financial Services Inc. (IAIFS) is the primary shareholder of FIN-XO. Some FIN-XO Investment Advisors may share office space with IAIFS or another financial entity related to or affiliated with IAIFS, or may share a receptionist and other administrative staff. Please see our Statement of Policies for all related or affiliated entities in the Regulatory Framework of our website at www.fin-xo.com.
FIN-XO is committed to handling client complaints in a fair and equitable manner. On opening an account, we will send you a document outlining our process for handling complaints, as well as a copy of a communication issued by IIROC (now CIRO) entitled “Making a Complaint – A Guide for Investors”.
Our process for handling client complaints is available online at www.fin-xo.com. If your complaint relates to the servicing of your account, we ask that you raise your concerns with your FIN-XO Investment Advisor identified on your Account Statement. If your complaint concerns alleged misconduct in the handling of your account or transactions in your account, we urge you to raise your concerns with the Branch Manager or our designated Complaints Officer at the address below. The following is a brief summary of our procedure for responding to complaints:
• Upon receipt of a complaint (apart from service complaints), we will send an acknowledgement letter to the complainant within five business days. We may request that you provide or clarify your complaint in writing.
• After analyzing the complaint, a detailed response letter and a copy of “Making a Complaint – A Guide for Investors” will be sent as soon as possible or 90 calendar days following the date of receipt of the complaint. This response will include the results of our investigation and our final decision on the complaint.
• If we are not able to send a final response within 90 days, you will be informed of the reason for the delay and of the new timeline for completion of the process.
• If you are not satisfied with our final response, you can bring your complaint to the Ombudsman for Banking Services and Investments (“OBSI”) within 180 days of receiving our final response.
• (Quebec resident clients) In addition, if you are not satisfied with the outcome or with the examination of a complaint, the Autorité des marchés financiers (“AMF”) can examine your complaint and may provide dispute resolution services.
Attention: Complaints Officer
2200 McGill College Avenue, Suite 350
Montreal, QC, H3A 3P8
Your personal information is valuable
We, FIN-XO and our iA Financial Group affiliates, are doing everything we can to protect the personal information you entrust to us. That is why we are committed to continually reassessing our practices, keeping them up to date and in line with the high standards regarding your privacy and management of your personal information, as set out in the iA Financial Group Privacy Notice.
To learn more about the iA Financial Group Privacy Notice, please visit the Protection of Personal Information section of the iA Financial Group website at www.ia.ca/protection-personal-information.
What we are doing to protect your personal information
Personal information is information that concerns you and can be used to identify you, directly or indirectly.
• We operate on the basis of 4 important principles.
The following principles govern how we ensure your privacy:
• Ensure secure management. We implement good management and safeguard practices to secure your personal information and oversee its use.
• Respect your rights. You have rights related to the personal information we hold about you. You may exercise them at any time.
• Be transparent. We provide you with all relevant information about our privacy practices.
• Act responsibly. Our employees, suppliers and representatives (including our financial services advisors) must comply with our privacy practices. Our iA Financial Group Chief Privacy Officer sees to ensure that they do and that our practices are always up to date.
Further to the iA Financial Group Privacy Notice:
• We only collect personal information that is necessary
• We collect your personal information for specific purposes
o The following purposes may be essential to our relationship with you, depending on the products and services you request:
• Know who you are• Some purposes are optional for doing business with us. You can consent to them to benefit from a distinctive client experience and to obtain offers tailored to your needs. In order to fulfill the purposes outlined in the iA Financial Group Privacy Notice, we may sometimes need to share your personal information with other individuals or organizations.
• Build a relationship with you
• Maintain our relationship with you
• Comply with laws and manage risk
While we store your personal information primarily in Canada, we may sometimes disclose it to parties outside of Canada or in another Canadian province or territory.
• We obtain your consent, except in certain cases prescribed by law.
• We are doing everything we can to protect your personal information, and our internal procedures clearly define the roles and responsibilities of employees, representatives and other stakeholders in the management of personal information:
o We limit access to and use of your personal information to those who need it to perform their duties.• We retain your personal information only as long as necessary to:
o We protect our facilities and IT systems with securities measures, and your personal information is protected at all times by a multidisciplinary team, monitoring tools and state-of-the-art technological environments.
o We communicate with you in a secure manner, including when we collect your personal information.
o Fulfill the purposes for which we collected it; and• We respect your privacy rights:
o Meet our legal obligations.
o To manage your consent preferencesYou may review and change your consent preferences for the collection, use and disclosure of your personal information at any time. Please be aware, however, that we will no longer be able to offer you our products and services if you withdraw your consent for a purpose that is essential to our relationship with you.
Withdrawing your consent may take up to 30 days to be processed and applied.
o Accessing, rectifying or deleting your personal informationYou have several rights as set out below regarding the personal information we hold about you. You may exercise them at any time:
You may submit a written request to exercise any of your rights in relation to your personal information. You will receive our written response within 30 days. If we deny your request in whole or in part, we will provide you with several pieces of information:• Know whether we hold personal information about you
• Access your personal information
• Rectify your personal information
• Delete your personal information (our response to this request will depend on the situation)
• Reasons for the denial
• The references of the laws and regulations that justify this denial
• Your right to challenge this denial before the privacy regulatory authority of your province or territory
• Timeframe for appealing the denial
Filing a complaint
You may file a complaint if you feel that we have mishandled your personal information.
We invite you to contact us first if you wish to file a complaint. We will take the time to analyze your complaint and work with you to resolve the situation.
You can also file a complaint with the privacy regulatory authority of your province or territory.
How to contact us regarding your privacy
You can contact us in writing at the addresses below to:
• Submit a request to access, rectify or delete your personal information
• File a complaint about the handling of your personal information
• Request assistance, send us a comment or ask any question related to your privacy
Make sure you provide us with all the information we need to follow up on your request.
By mail: FIN-XO Inc.
2200 McGill College Avenue - Suite 350
Montreal, QC H3A 3P8
By Phone: 1-800-361-7465