Your Partner In Achieving Your Financial Goals


Chippingham Order Handling Policy & Procedure

Handling of Orders
Chippingham Financial Group (“CFG”) routes all trade orders and instructions through our
associated carrying brokers. Listed securities and equity option orders are executed through
National Bank Financial (“NBF”) via National Bank Correspondent Network, and futures and
futures options orders are executed through RJO’Brien Canada (“RJOB”).
Client orders placed during normal business hours will be transmitted to the NBF or
RJOB trading staff or trading systems and executed based on the instructions of the
client and in accordance with the hours of operation on the market where the order is
placed.

Hours of Operation
Through our carrying brokers, CFG will provide to you and your financial advisor full order
execution services between the hours of 9:30 AM and 4:30 PM, Eastern Standard Time for
securities and equity options and between 8:00 AM and 4:15 PM Central Standard Time for
Futures and Future Options (excluding statutory holidays).
While some marketplaces will provide order execution services outside the hours noted
above, CFG will on a best efforts basis expand its hours of operation to accept any trading
orders and instructions outside of those times. However, in the possible absence of
adequate market liquidity, the best execution of your orders may be limited. As such, we
cannot guarantee order acceptance or execution outside of our standard hours of operation.
Clients who place orders with their Investment Advisors or through on-line systems when
Canadian markets are closed should be aware that such orders will be held in queue until
the opening of trading the following business day and entered into a market place in the
manner described in this document.

Handling of Future Orders
Future trade order and instructions are sent to the exchange in which they are listed for
execution.

SPECIAL SITUATIONS
NON DISCRETIONARY BLOCK ORDERS
Your Advisor may accept orders prior to or after-market hours. If CFG receives multiple
identical customer orders prior to or after-market hours, the CFG may enter the orders with
the R.J. O’Brien order desk the next trading day, prior to the open of the market, as a block
order as long as each account owner has been notified that his account may be blocked
with other accounts.

BLOCK ORDERS / SPLIT FILLS/ PARTIAL FILLS
In the allocation of split fills for block orders or partial fills, CFG shall allocate the fills
according on a first in first out basis.

Price Banding
To ensure a fair, stable and orderly market, as set by the various commodity exchanges, RJO
Vantage subjects all orders to price verification using a process called price banding. The
platform uses one mechanism for futures price banding and another for options price
banding.
Without price banding, for example, a clearly erroneous order, such as a limit bid at a price
well above the market or a limit offer at prices well below the market, could trigger a
sequence of market-moving trades that require subsequent price adjustments. As outlined
by the Chicago Mercantile Exchange

Futures Price Banding
A Price Band Variation (PBV) is a static value that varies by product. It is symmetrically
applied to both the upside (for bids) and downside (for offers) to determine the Price Band
Variation Range (PBVR). With each price change the PBVR is recalculated and the new range
is applied. The CME Globex platform rejects all bids and offers outside the PBVR.
Applying the PBV to a reference price determines the PBVR. The reference price depends on
the market state and trading activity:

  • During the Pre-Open and the Pre-Open/Non-Cancel period, the contract’s Settlement Price is the reference price.
  • Once the first Indicative Opening Price (IOP) is calculated, it becomes the reference price.
  • During trading hours, the Last Price is the reference price.
  • If no IOP or Last Price is established, the Settlement Price remains the reference price until a Last Price is established.
  • In the event of a market emergency, when a market is placed in a non-trading mode
    during trading hours, the IOP serves as the reference price during the non- regular PreOpen
    and Pre-Open/Non Cancel Period. If no IOP is available, the Last Price is the
    reference price.

Enhanced Options Price Banding
Enhanced Options price banding is identical to futures price banding, with the following
modifications. Based on market conditions, the reference price is set to the:

  • Last Price of the option or spread;
  • Theoretical Options Price (TOP), based on well-established options pricing algorithms; or,
  • Last Price in combination with the TOP, if practical.
  • The width of the price bands is determined by one of the following:
  • A fixed PBV for the entire option series, identical to the current price banding practice;
  • A dynamic PBV based on the delta of the option, as estimated by the TOP calculation; or,
  • A dynamic PBV based on a percentage of the TOP, where the percentage is based on the delta of the option.

FUTURES BEST EXECUTION
For electronically routed orders, customers will be given the opportunity to indicate which market they want their order directed to. If a customer will not indicate which market the order should be directed to, CFG investment advisor will consider relevant facts and circumstances in determining which market to route the order such as:

  1. The character of the market-price, volatility, liquidity, depth, speed of execution;
  2. Size and type of transaction;
  3. Location and accessibility to the customer’s intermediary of primary markets and quotation services; and
  4. Fees and costs.

Handling of Listed Securities Orders
There are a variety of marketplaces on which orders to trade listed securities can be placed
and executed. CFG provides this guidance to inform clients about the types of orders
offered and how such orders will be handled. Since 2006 Alternative Trading Systems (ATS)
have operated in Canada, providing an alternative marketplace for the trading of
securities. Until the introduction of ATS, trading was solely on traditional exchanges, such
as the Toronto Stock Exchange (TSX) and the TSX Venture Exchange (TSXV). A multiple
market environment brings many benefits to investors such as the potential for improved
pricing and liquidity as well as technological and market structure innovation. However it
also brings a certain level of complexity and challenges that were not present in a single
market environment. Under Canadian regulation, CFG as an obligation to secure the best
price and the best execution for its clients orders.

Best Price
During regular market hours NBF achieves best price execution by using automated
systems that will source the best price for the execution of a client order from the
multiple Canadian marketplaces. All available markets are considered during the
sourcing process, including both visible markets and markets that offer no pre-trade
transparency (Dark Pools).

Primary Marketplace and Routing of Orders
For securities listed on the TSX, which may also trade on one or more ATS (Alternative
Trading System), the TSX will be designated as the principal marketplace at the time
of order entry.
Unless otherwise agreed to by you and your financial advisor, the following policies
will apply:
All orders received by CFG prior to 9:30 AM EST will be released by CFG to NBCN to
be entered onto the pre-opening of the TSX.
Orders entered after 4:00PM will be released by CFG to NBCN for the pre-opening on
the next business day.
All orders received by CFG between the hours of 9:30 AM and 4:00 PM EST which are
immediately executable (including market orders or limit orders within the bid/ask
spread on a trading facility or marketplace) will immediately be forwarded to NBCN
to be executed on the trading facility or marketplace which offers the best price for
that order.
All orders received by CFG between the hours of 9:30 AM and 4:00 PM EST which
are not immediately executable (including limit orders outside the bid/ask spread)
will be forwarded to NBCN to be entered on a transparent trading facility or
marketplace in accordance with CFG’s and NBCN’s policies as updated from time to
time.

Extended Hours Trading –
Some marketplaces provide additional order execution facilities outside of their normal
trading hours. Clients should consult the web sites of the marketplace where they intend
to trade or speak to their Investment Advisor if they wish to execute outside of normal
business hours. Please be advised that price determination and liquidity may vary from
market to market during these trading sessions.

Standard Handling of Orders
Marketplaces typically operate according to a schedule of trading sessions or market states. The following points are intended to clarify how NBF will process the described
client orders during these sessions.

Pre Open Sessions
Clients who choose to participate in a pre-open session, either passively or actively,
should be aware of the following:

  • A pre-open session is typically held where a market supports an opening auction
  • Typically only a very small percentage of the daily trading volume of a security is
    executed in the pre-opening period. Duration orders such as GTC or GTD (see below)
    entered the day prior will roll into the pre-open session the next day and be available
    for trading.
  • Orders entered into pre-open sessions are held until the opening auction is
    executed. Buy and Sell order prices may overlap, which in-turn helps drive the price
    discovery of the opening auction
  • In a multiple markets environment there is no standard opening price set across all
    markets which trade securities. Furthermore, not all market places open at the same
    time which may impact the price and volume executed for a client order entered in the
    pre-opening time period. Price discrepancies between markets may occur.

For these reasons automated order handling systems may not be relied on for best price or
best execution of client orders. If a client choosesto enter an order in the pre-open session
then, unless otherwise directed by the client NBF, will select a marketplace where, bases
on its analysis and experience, it feels the client will secure the best execution. Duration
orders that have rolled over from the night before into the Pre-open will be considered to
be passively participating. If a client does not want to passively participate in the Pre-open
session they should enter Day orders only or cancel unfilled duration orders at the end of
each day.

Opening Auction
For marketplaces that support an opening auction, e.g. TSX, TSXV, alpha and Pure trade
allocation and imbalance/price volatility management methodology may differ.
Markets that do not support an opening auction typically open “shotgun” style at a
predetermined time. Please consult each specific marketplace for more information.

Post-open/Continuous Auction
Where markets support an opening auction, unfilled orders from the auction will rollover
to the Post-open market session of the market that they were entered upon unless
specified as Market on Open (MOO) orders.
Market and Limit orders received by NBF during the Post-open session will be sent
through an automated system that will route the order to the best market available at the
time of receipt. Any unfilled portion of the order will be directed to a default booking
market determined by NBF and remain on that market until the order is filled, modified,
cancelled or expires

Order Execution
In a multiple marketplace environment, certain types of orders may have specific handling
implications. Unless otherwise specified, orders will be handled in accordance with the
description provided in this document
Pricing

Market Order
A market order is an order to buy or sell a security at whatever prices are available in a
marketplace to help ensure a complete and full fill. NBF cautions clients from entering
market orders given the different treatment that market orders receive in a multiple
market environment. Please consult each specific marketplace for more information. NBF
will route market orders through its automated system that examines each available
marketplace and enters the order in the market that secures the best price.

Limit Order
A limit order is an order for a security at a specific minimum sale price or a maximum
purchase price set by the client. If a limit order is not immediately executable, NBF will
book limit orders to a market that in its judgment offers the best chance of execution.
These orders will remain in that market until the order is filled, cancelled or expired.
In a multiple market environment, Clients should be aware that once their limit order is
booked on a market place it is possible for the security to trade in other markets without
the client’s booked order participating.

Duration
Duration refers to the lifespan of the order within a trading system. Different markets
may offer different duration values and options. For market specific details please refer
to the web site of the market in questions. Below are a number of the most commonly
used duration types.

Day Orders
A Day order instructions the receiving marketplace to automatically expire the order if it
is not executed in the same trading day.

Good Till Cancel Orders – order entry systems GTC is for 56 days
Good Till Cancelled Orders (GTC) specify that the order remains active until the client
cancels the order, or until the order exceeds its set duration and thus expires.
NBF will only allow the entry of orders with a 30 calendar-day maximum GTC. It is the
client’s responsibility to ensure they know what the date of expire will be and to contact
their Investment Advisor on or before the order’s expiry date should they will the order to
be re-instated.

Good Till Date Orders
Good Till Date Orders have an order duration that specify that the order remains open
until it is either filled or until it expires at a specified date.

Special Terms Orders (STO)
For NBF STO are orders with specific terms which cannot be traded in the regular
marketplace. STO orders will only post to the special terms market on which they are
entered.
Please note that the use of special term orders can delay or decrease the chance of
execution, as the receiving market must ensure the “special terms” of the order are
satisfied prior to executing the order.

Market-on-Close Orders (MOC)
Market on Close is an order designation which specifies that the entire order is to be
executed at the official closing price of the marketplace it is entered upon. Not all
markets support this order type in their system.

Disclosure of Marketplace
An order executed on more than one marketplace or alternative marketplaces will be
reported to the client using a trade confirmation that will generally read “Traded on
Multiple Markets/Trans Plus Marches”.
All orders executed on more than one marketplace or ATS in Canada will receive a
confirmation listing the transactions on the different marketplaces.

Relationship with Alpha Trading Systems Limited Partnership

Alpha Trading Systems Limited Partnership (Alpha) is an ATS operating in Canada offering
a broad range of trading services and options. As part of NBF’S regulatory obligations to
secure best execution for al client orders, NBF is a subscriber to Alpha and our automated
trading systems probe its available liquidity on all orders.
NBF is a limited partner of Alpha and a shareholder of Alpha Trading Systems Inc., the
general partner of Alpha, and also has representation on the Board of Directors of Alpha.