Relationship Disclosure

Overview

This  Relationship  Disclosure  Terms  and  Conditions  Booklet  (the  “Booklet”)  sets  out  the  essential  terms  and conditions that govern the operation of your account. By opening an account with us, you agree to be bound by these terms and conditions. Please review the contents of this Booklet carefully.

Account Relationship & Suitability

Summary
Chippingham Financial Group Ltd. (“CFG”) is a broker dealer that is a member of IIROC, CIPF. CFG is a company that believes in acting as your guide in navigating the complex markets by helping you not only understand the investment options available to you, but to manage and monitor your portfolio, devise unique strategies for growth, act as your liaison with the investment community and recognize and avoid serious risks, including those never before encountered.

CFG offers private and institutional clients access to a full range of products services including

  • Cash, DAP, Margin and registered accounts
  • Institutional Client Accounts
  • Private Client Accounts
    • Advisory Accounts
  • Investment Advisory Services
  • Access to equity securities, mutual funds, fix income securities, options and futures trading
  • Canadian and US research, and new issues via our relationship with National Bank Correspondent Network (NBCN)

Our primary objective is to earn profits for our clients through independent thought and analysis, timely advice, and precise execution in the markets. 

At Chippingham Financial Group we strive to ensure that your portfolio will be suitably tailored to meet your financial needs and goals.  Our suitability assessment will take into consideration your investment objectives, risk tolerances, investment knowledge and investment time horizon as well as your current investment portfolio composition and financial standings

 
Advisory (or Non-Discretionary) Account Relationships
An “advisory account” – is an account where the client is responsible for investment decisions but is able to act on advice given by our registered representatives (“Investment Advisor” or “Advisor”).  The Registered Representative/Investment Advisor is responsible will provide you with advice and recommendations based on the information provide and collected from you and market conditions. In providing this advice the registered representative is responsible to provide suitable investment recommendations, advising you of the features and risks of any investment we recommend, and obtaining your consent and instructions for investment transactions.  You are the ultimate decision-maker and must provide your specific instructions or authorization for each securities transaction in your account. You are under no obligation to accept your Advisor’s recommendations.

 
Account Types
Cash Accounts: 
Is an account in which the client is required to pay the full cost for securities purchased by the client when the purchase is made?  Client can hold or trade cash and securities (stocks, mutual funds, bonds, GICs).  Short selling and options trading is not permitted in cash accounts.

Margin/Option Account:
An account where the clients can borrow cash and/or securities to purchase or sell securities and options (if approved).  Margin by definition is the amount of collateral that clients are required to deposit to secure borrow made in the account.  If there is a significant loss in a margin account, clients will be required to deposit more collateral or close positions in the account. Margin accounts are used for the purpose of engaging in leveraged investment strategy.  Leverage investing is a higher risk investment strategy and is not suitable for all investors.

Futures Account:
Futures account is a type of margin account in which clients can trade futures and future options

Delivery Against Payment Account “DAP”
An account for institutions that allows them to execute a trade with one Investment Dealer that will be settled and paid for from the clients account held at another Investment Dealer

Registered Accounts:

A legal trust registered with the Canada Government and used to promote savings for either retirement, education, or general savings.  Contributions and gains in retirement registered accounts are tax deferred.  Gains in TFSA are tax exempt and gains in RESP are tax deferred.  An RRSP can contain stocks, bonds, mutual funds, GICs, long call options and covered call options.

The following is the list of registered account offered by Chippingham Financial Group Ltd. 

Registered Retirement Savings Account “RRSP”:

Spousal Registered Retirement Savings Account “SRRSP”

Tax Free Savings Account “TFSA”

Registered Retirement Income Fund “RRIF”

Spousal Registered Retirement Income Fund “SRRIF”

Locked-in-Registered Account “LIRA”:

Locked-in-Income Fun “LIF”

Registered Education Savings Plan “RESP”

Off-Book Account:
A type of mutual fund account in which clients can purchase mutual funds only, and the funds are held in client name in the custody of the fund company who issued the mutual funds.

Hypothecation Account: 
A type of leverage investment account where clients may pledge the assets owned in the account as collateral to third party lender to secure financing.  Similar to a margin account in that the clients are able to borrow funds for investing.  Leverage investing is a higher risk investment strategy and is not suitable for all investors.

 
Suitability
Your Advisor is responsible for ensuring that any investments or recommendations made for you are suitable.  Also we will assess the suitability of investments in private client accounts only when:

  1. A trade is accepted
  2. A recommendation is made,
  3. Securities are transferred or deposited into the account
  4. There is a change in the registered representative or portfolio manager assigned to the account
  5. There is a material change to your “know your client information.
  6. On-going suitability assessments is provided for client managed accounts

If those assets are not suitable for you then your Advisor is responsible for informing you of that.  Suitability assessments are based on the information you provided to us,  your portfolio composition, the know your client information and documentation

Know-Your-Client’ Information and Documentation

These KYC information is collected to enable CFG and your Advisor to make appropriate recommendations and suitability assessments.  The information includes personal information about our clients as required by the regulators which must be updated by our clients when material changes occur. This information contains other critical information needed to ensure that the appropriate investments are recommended:

  • Your Personal Circumstances

Specific and unique characteristics about you like your age, your family status, and career.  Factors that will help your advisor determine how your personal factors relate to your investment goals and if they are inline.

  • Current Financial Situation e.g. annual income and net worth

What is current annual income and net worth are used to create investment plans and investments recommendations that are not excessively risky and help determine what your savings and investments goals may be.

  • Investment Objectives

Your overall investment objectives, needs and goals are used as part of the investment selection and recommendations. 

  • Time Horizon

How long do you have to invest and what are you liquidity needs, do you want or need to immediate access to cash at all times, or do you have a period of time in which you can make a longer term locked in investment.  Do you have a specific investment time horizon event such as how many years until you retire, or how many years of University education savings do you have until your child or children are expected to go to school.

  • Risk Tolerance

How much risk are you will to accept High risk, medium risk, low risk.  Generally there is an inverse relationship between rate of return and level of risk.  A low risk security and or investment will general be expected to have a lower risk of return.

  • Investment Knowledge

How familiar are you with the different types of investment products, and how much past experience do you have investing or dealing with an Investment Advisor. 

KYC information is collected by CFG noted on your New Client Account Application (‘NCAF’). A copy of your investment objectives, risk tolerance the know your client information collected by CFG from you, shall be provided to you at the time your account is open and when there are material changes to your information recorded. Depending on the nature of the kind of account you have with CFG, you may receive additional documents that are relevant to your particular account.  As a client you need to provide us with accurate information regarding you investment objectives, time horizon, risks tolerance and financial circumstances. You need to promptly advise us if there are any significant changes to any information previously provided to us.

 
Client Information and Identity Verification
When we open an account for you, and depending on the type of account that is opened, applicable law and our policies require that we obtain the following minimum information from you prior to performing any transactions in your account apart from the initial deposit:

  • Full legal name and date of birth
  • Home address and contact information – telephone, email, fax, etc.
  • Social Insurance Number,
  • Social Security Number(for US persons)
  • Tax Identifying Number(for US persons)
  • Citizenship
  • Net income and net worth
  • Marital status and number of dependents
  • Occupation and employer (and the occupation and employer of your spouse)
  • Intended use of the account
  • Politically Exposed  Persons  –  whether  you  or  a  member  of  your  immediate  family  is,  or  was,  a political official
  • Third party information – where any third party has a financial interest or trading authority over your account, you must provide their name, date of birth, citizenship, employment information, their relationship to you and whether they are a control person or insider of an issuer of securities
  • Beneficial owners – where there is an individual or individuals who beneficially own, directly or indirectly through another legal entity or entities, a greater than 10% interest in the account, • Investment objectives
  • Time horizon
  • Risk tolerance
  • Investment knowledge and experience
  • Identity verification documents – for all account owners, including all joint account owners, partners of a partnership, trustees of a trust, beneficial owners and authorized persons able to provide instructions regarding the account.
  • Insider and Controlling Shareholder Declaration

This information will be collected and recorded using the forms and documents required for the opening of your account. Your Advisor will provide you with copies of these documents. It is your responsibility to provide us with accurate and complete information, to review the information that we have recorded on these documents, and make us aware of any errors or omissions immediately. The minimum documents that you should receive is:

  • Schedule of Service and Fee Charges
  • An Investor’s Guide to Making a Complaint
  • Strip Bonds and Strip Bond Packages Information Statement
  • Relationship Disclosure (this document)
  • New Client Application Information

 
Communications
Your advisor and CFG shall have regular communications with you, and any notice or communication may be processed via facsimile, mail, phone, webpage or email between you or your authorized representative.

 
Account Statements and Trade Confirmations:
CFG will issue monthly statements to clients at the end of every quarter (Mar, Jun, Sep & Dec) and each month if any transactions took place during the month or if there is an open derivative position in your account.  Portfolio evaluations are available on request,

CFG will issue trade confirmations for each account as soon as possible after the execution of the trade.  The trade confirmations will indicate the details of the trade including commission charges, any applicable fees, transaction date, and settlement date. Within 3 business days of the transaction

CFG will issue a year end account summary, as well as applicable tax forms including but not limited to T5s, and plan account contribution receipts

 
Account Fees:
Fees and/or commissions will be prescribed to your account by activity and account type. Security and derivative transactions will be charged a trade commission, managed or fee based accounts will be charged a management fee, fix income securities, currency conversions and in instances where Chippingham Financial Group Ltd may act as principal on a transactions, the commission for the trade shall be added to the price of the security and all accounts shall be subject to services charges, debit interest, securities lending and administrative costs. 

Fee-based accounts charge fees on a monthly basis which are calculated as a percentage of the value of the assets in your account(s)(which may include cash). Advisors are paid a fee for ongoing service of the account. We may receive compensation or earn revenue in other forms which may be in addition to, or in substitution for, direct payments by you. For example, we may receive periodic trailer fees from a mutual fund company or an issuer of securities regardless of whether you pay a fee or an up-front commission. For further information on fee-based accounts and whether this type of account is suitable for you, please speak with your Advisor.

For a full description of all account fees and charges please refer to the CFG fee brochure.  A copy will be provided to you at the time your account is open.  Additional copies are available on request.

New issue securities, mutual funds and exchange traded funds (ETF’s) are also subject to additional fees.  Underwriting and sales fees are applied and included in the price of new issues.  ETF’s and mutual funds may be subject to fees including but not limited to management fees, operating fees including trading fees and research costs, loads or commissions,  redemption fees, trailer fees and exchange fees.  Details of these additional fees are disclosed in the prospectus or subscription agreement or sales memorandum.

Futures transactions are also subject to applicable exchange fees and clearing fee as outlined in the futures new account application.

Before your trading instructions are executed, you Advisor will commissions, fees and other charges for which you will have to either directly or indirectly pay.  Commissions, fees and other charges will affect your investment return.

 
Referral Fees
CFG may pay or receive referral fees from time to time.  Any referral fees will be disclosed to you outlining the terms of the referral and amount of the fee.  Any referral fee paid by CFG will not be charged either directly or indirectly to your account.

Performance Benchmarks and How to Use Them

You can judge how your investments are doing by comparing the rate of return on the securities you hold to an investment performance benchmark. Your rate of return is affected by, among other things, changes in the value of your securities, dividends and the interest you earn, as well as when you make deposits and withdrawals.

To compare your rate of return with a benchmark, find a benchmark made up of securities like the ones you have in your account. For example, the S&P/TSX Composite is a benchmark for a broad group of Canadian stocks that trade on the Toronto Stock Exchange. It’s a good yardstick for assessing performance of a Canadian equity mutual fund with investments in Canadian corporations. It would not be a good benchmark if you hold foreign investments, bonds, shares of smaller companies, or ones limited to only one part of the economy. Instead, you would have to find a foreign equity, bond, small cap or industry sector benchmark. If you have an account made up half of stocks and half of bonds, compare your rate or return to the average of a stock and a bond index.

Note:

  • Keep in mind that benchmarks should be used as a guide only.
  • Benchmarks do not factor in commissions or other costs to invest and often don’t include low-earning assets that you hold to cash in fast for emergencies. This means benchmark returns will seem higher than what you would earn on your account if you held the same securities as the index.
  • Benchmark rates of return are calculated using a specified method. For the best comparison, be sure this is how the rate of return on your account is calculated.
  • Remember that benchmarks are based on how a sample portfolio performs and that other factors, such as tax considerations, will affect your returns.

We do not provide benchmarks in your account statement and/or annual investment performance report. This is because rate-of-return calculation methods may differ, for example, for benchmarks and mutual funds

Please speak to your investment advisor if you have questions about the performance of your account or investments or what benchmark(s) might be appropriate for you.

Complaint Procedures:

Any complaints or allegations of misconduct of the company, any of its staff members or agents are to be reported to Chippingham Financial Group CCO Dave Lapensee.

The CCO is the designated complaints officer for Chippingham Financial Group.  Clients who make verbal complaints will be asked to make the complaint in writing, addressed to the CCO.

Complaints can be submitted to:

Mail:

Suite 501 – One St Clair Ave West

Toronto, ON M4V 1K6

Attention: Compliance

 

Email: dlapensee@chippingham.com

Please add: “complaint” to the subject line.

 

Within five business days of receiving the complaint, the Compliance Department shall provide the client with and acknowledgement letter outlining who is reviewing their complaint, timeframe for when they can expect to receive a substance response and a copy the IIROC how to make a complaint brochure outlining various provincial arbitration programs available to the client.   As well copy of IIROC’s how to make a complaint brochure shall be provided at the time your account is open.

A final substantive response must be sent to the client within 90 days from the date the compliant was received.  If a final response cannot be made within that time frame a letter must be sent to the client informing them of the reason for the delays and provide them with an updated expected response time-line.   

 

CHIPPINGHAM FINANCIAL GROUP CONFLICTS OF INTEREST

As an investment dealer, we are a financial intermediary. As is the common practice in the brokerage industry, sometimes we may be the party on the other side of the transaction (referred to as a “principal” trade) where we own the security we sell to you. On other occasions, we simply facilitate a transaction between you as our client and a third party on the other side of the transaction through an “agency” trade where we have no ownership interest in the security traded.  In still other cases, we advise an issuer of securities on how to best raise funds by selling securities, while contemporaneously recommending that our clients buy those same securities.

Actual, potential and perceived conflicts of interest may exist based on our relationship with you and other third parties.  CFG has implemented policies and procedures to identify and escalate material conflicts of interests that would reasonably be expected to arise between its interests and the interests of its clients. Where an existing or potential conflict of interest has been identified, measures will be taken to either: (i) avoid; (ii) mitigate or manage; and/or (iii) disclose the conflict of interest to the client in a timely manner, depending on the nature and extent of the conflict or potential conflict of interest on a case-by-case basis.

 
Conflicts of Interest

The general types of conflicts of interest which can arise are:

  • Conflicts of interest between you and us,
  • Conflicts of interest between you and our other clients, and
  • Conflicts of interest between us and our related and associated companies.

 
Management of Conflicts of Interest

In general, we deal with and manage relevant conflicts as follows:

  • Avoidance: This includes avoiding conflicts that are prohibited by law as well as conflicts that cannot effectively be addressed.
  • Control: We manage acceptable conflicts through means such as physically separating different business functions and restricting the internal exchange of information.
  • Disclosure: By providing you with information about conflicts, you are able to assess independently their significance when evaluating our recommendations and any actions we take.

If there is specific actual or potential conflict of interest between you, the firm and/or your advisor you shall be given a written disclosure at the time of account opening or when a potential conflict arises outlining the details of the potential conflict of interest.

If you ever have any questions or concerns, whether they involve conflicts of interest or anything else, you should never hesitate to say so and ask your advisor for an explanation and more information

 
Other/Outside Business Activity
Your Advisor is required to receive prior approval from us in order to engage in any other outside activities.  Other products and services an advisor may engage in is outside of the affiliation with CFG and these activities if any are not supervised or monitor and CFG does not in any way warrant or assume any liability whatsoever in connection with any other or outside business activities engaged in by your Advisor.

Insurance
Your Advisors may be dually licensed to offer you both securities and insurance products. Insurance products and services, including segregated funds, are not offered by CFG, and is an outside business activity not associated with Chippingham Financial Group Ltd.