Conflicts of Interest Disclosure
Description of Firm
Raymond James Ltd. is what is referred to as an “integrated” investment firm since we provide a broad range of corporate finance, institutional trading and retail client services and products. Through our related entities, there is the potential for us to be susceptible to conflicts of interest since we can represent both sides to a transaction, namely, the buyer and the seller.
You can learn more about our firm at www.raymondjames.ca.
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.
Description of Role of an Investment Dealer and Underwriter
As an investment dealer, we are a financial intermediary. As is the common practice in the brokerage industry, sometimes the firm may be the party on the other side of a transaction (referred to as a “principal” trade) where we own the security we sell to you or buy the securities sold by 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 best to raise funds by selling securities, while at the same time recommending that our clients buy those securities.
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 be effectively addressed in the client’s best interest.
- Control: We manage actual and potential 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.
We are transparent in disclosing fees, commissions and other compensation to fully inform you in advance so that you know what you will be paying, and offer a wide variety of pricing options to choose from. Our advisors are compensated by charging a fee as a percentage of the total value of the account, which does not incentivize them to have you invested in any particular securities. These fees are also disclosed to you when your account is opened.
Should we refer you to another related or unrelated company, or when another related or unrelated company refers you to us, the referrer often receives compensation. It is important to note that a referral agreement should not result in an increase in the cost or fees of the services provided. Advisors must consider the benefits of the referral to the client, in addition to available alternatives, and should ensure that the benefit received by the client outweighs that of alternatives. Advisors must provide clients deemed suitable to engage in a referral arrangement with a disclosure prior to any transaction taking place.
Canada has comprehensive and extensive securities laws and regulations, many of which are directed at protecting client and investor interests, including dealing with conflicts of interest. If you would like more information on how Canadian securities regulations address conflicts of interest in order to safeguard the investing public, we suggest that you refer to the websites and publications of the provincial securities commissions through the Canadian Securities Administrators (CSA) (www.securities-administrators.ca).
Possible Conflicts and How They Are Managed
Examples of material conflicts of interest situations may include the following:
|Conflict of Interest||Address By||Management of Conflicts|
|Ongoing Conflict of Interest|
|We earn compensation by selling products and services to you for which you pay us.||Disclose
|We endeavor to be transparent in disclosing fees, commissions and other compensation to 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.|
|Please consult with your advisor to obtain our service fee brochure.|
|Different products and services have differing levels of compensation.||Disclose||
Our compensation is disclosed to you and we offer pricing alternatives intended to reduce the conflicts associated with commission-based pricing.
|Avoid||We are required by industry regulations and firm policy to make only “suitable” investment recommendations.|
|We may choose not to offer a complex product that carries a high commission.|
|We would like you to use more of our services and buy more of our products.||Avoid Control||We do not engage in “tied selling” which is prohibited by regulation in any event.|
|Control||We have policies and procedures prohibiting recommendations solely for the purpose of generating revenue for us without any benefit to you.|
|Control||Management has put in place compliance programs to monitor advisors to help identify and address concerns.|
|If you have a managed account, we have discretion or control over the transactions in your account.||Control||Regulations require that we disclose and obtain your specific approval to purchase securities of related and connected entities when we have discretionary power to do so.|
|Conflict of Interest May Occur|
|Our compensation, organizationally and individually, may involve commissions based on sales volume.||Disclose||We offer fee-based and managed accounts, as well as similar products such as no-load mutual funds, which have pricing structures designed to reduce commission incentives.|
|Commissions and fees for similar services may vary within the established fee schedule depending upon the amount you have negotiated with your advisor.||Disclose||Commissions and some of our fees may be negotiable and may vary based on independent discussions between you and your advisor.|
|Commissions and fees earned on some products that we distribute do not appear in your client statements. For example, Raymond James may earn revenue as commission on the spread between the price paid to the issuer of securities and the issue price paid by the purchaser of securities on new security issues||Disclose||Deferred Sales Charges for mutual funds are explained to you by your advisor and presented to you in the mutual fund prospectus.|
|Fees received for new issues are explained in the prospectus|
|We would like you to buy and use more of the services or products offered through related companies such as Eagle Asset Management Inc., Cougar Global Investments Limited, Raymond James Trust (Canada), and Raymond James Trust (Québec) Ltd.||Avoid Control Disclose||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.|
|We may sell you securities that we own (called principal trades) and profit by doing so.
||Disclose||We will tell you whether we acted as principal or agent for each transaction on the trade confirmation.|
|For non-institutional accounts, in the case of fixed income securities (which we often sell as principal), we provide you with a stated yield to maturity so you can assess the competitiveness of our pricing.|
|We may engage in trading of securities for our own account (called proprietary trading).||Control||We maintain information barriers between our corporate trading activities and Private Client 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.|
|We may sell you securities of companies that are related or connected to us.||Disclose||We inform you whether a transaction involved a related or connected security on the trade confirmation.|
|Disclose||We are a wholly-owned subsidiary of RJFI a public company listed on the New York Stock Exchange and as such our parent company is a related party. RJFI is also the parent company of Eagle Asset Management Inc., and Cougar Global Investments Limited, both of which are investment management firms providing model portfolios on our Partners Program. For other related party disclosure refer to the RJFI website: www.raymondjames.com. Both Raymond James (USA) Ltd. and Raymond James Financial Planning Ltd. are related parties as our wholly-owned subsidiaries. We may from time to time recommend that you trade, or provide you advice about a security issued by RJFI and other issuers or recommend the services provided by our subsidiary companies. If you have questions or want further information ask your advisor or our Chief Compliance Officer.|
|Control||Our advisors receive the same commission compensation payout as a percentage of gross revenue regardless of the product originator.|
|Disclose||We do not solicit the purchase of RJFI stock.|
|Some of our advisors receive compensation for referring you to another person either within or outside of the firm in order to conduct various transactions||Control Disclose||All Referral Arrangements where the advisor receives compensation from another party are formalized in writing and the fees are fully disclosed to you in writing.|
|We may need to select which clients will be offered certain securities if availability is limited.||Control||We have a “fair allocation” policy for managed accounts.|
|For non-discretionary accounts, trade allocation will be determined by us in accordance with internal procedures.|
|Advisors and other individuals within the firm may periodically receive gifts for business promotion reasons from individuals representing an issuer such as a mutual fund. Likewise, representatives from RJL may provide promotional gifts to issuers or other parties that have either engaged in business with us or we are in the process of prospecting for business purposes.||Avoid Control||Gifts and business promotions, either received or provided, are prohibited by industry regulations and firm policy from being either so extensive or frequent so as to cause them to be a conflict of interest.|
| We distribute investment research that is produced by third parties.
We may provide investment research on securities of companies that may have other business relationships with us.
|Control||We have and follow written procedures under IIROC regulations that govern the distribution of third party research.|
|Our research and recommendations are subject to extensive and detailed regulatory requirements and internal standards.|
|Each research report discloses all information regarding RJL’s and the analysts’ business with or relationship with the subject company that may involve a conflict of interest.|
|You can review the standards that our research analysts are required to comply with on the CFA
RJL is an investment dealer engaged in securities trading and brokerage activities and providing investment banking, investment management, financial and financial advisory services.
Clients include issuing companies, promoters, shareholders with block positions and other issuers. RJL and its affiliates may also provide a broad range of financial products and services to its customers (including, but not limited to, banking, credit derivative, hedging, insurance and foreign exchange products and services).
|Control||We comply with applicable securities laws as they relate to the trading of securities while in possession of material non-public information. Our institutional corporate finance and Private Client advisory businesses are segregated to prevent the sharing of non- public information.|
|Material facts about our relationship with the issuer are described in offering documents|
|We may permit certain individuals who are registered with us (including your advisor or account representative) to be employed by, participate in, or accept compensation from other persons or firms, outside the scope of his/her relationship with us||Control Disclose||These relationships are subject to industry and regulatory requirements that impose restrictions on dealings between related registered firms and/or individuals that are dually registered with a related registered firm. Such restrictions are intended to minimize the potential for conflicts of interest resulting from these relationships.|
|We have adopted internal policies and procedures that supplement the regulatory requirements, including policies on privacy and confidentiality of information.|
|Individuals registered with us may also be registered with another registered firm related to RJL and provide services to clients of that firm||Avoid Control||These relationships are subject to industry and regulatory requirements that impose restrictions on dealings between related registered firms and/or individuals that are dually registered with a related registered firm. Such restrictions are intended to minimize the potential for conflicts of interest resulting from these relationships.|
|We have adopted internal policies and procedures that supplement the regulatory requirements, including policies on privacy and confidentiality of information.|
|We are paid by issuers of securities and other services when we advise on or underwrite a new issue which we may recommend to you.||Control Disclose||We have structurally segregated our institutional corporate finance and Private Client advisory businesses, which prevents the sharing of non-public information by our institutional corporate finance business (with the relationship with the issuer) with our Private Client 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 underwrite a new issue, we have a duty to the issuer who is selling the securities at a fair and reasonable price and must balance that duty with our duty to investors who are purchasing the securities at a fair and reasonable price.||Control||We operate our corporate finance and Private Client advisory businesses separately and all relationships and other material facts about our relationship with the issuer are described in the offering documents.|
|We may receive compensation from securities issuers and other third parties based on their products we sell to you, such as “trailer fees” on mutual funds and commissions and “trailer fees” on segregated funds and insurance policies.||Disclose||We disclose to you the situations and type of third party compensation we may receive. Please refer to the prospectuses of the applicable products.|
|Securities regulations require issuers to provide specific disclosure in the offering document (e.g., prospectus) of such arrangements and the compensation we will receive.|
|If you hold a security of a public issuer that is involved in a takeover bid, corporate reorganization, solicitation of proxies and other corporate actions, we may receive compensation from issuers, offerors or others, to solicit your proxy or vote in their favour with respect to these actions.||Disclose||Securities regulations require specific disclosure by the issuer of such arrangements and the compensation we will receive in documents such as information circulars, takeover bid circulars and issuer bid circulars|
|We are compensated in other ways as a result of the business you may do with us, including interest spreads on uninvested cash deposits with us and foreign exchange spreads when you convert currencies.||Disclose||Various forms of other compensation we may receive are disclosed to you.|
|Please refer to other sections of this booklet and our fee schedule.|
| We may benefit by exercising certain securities as they approach expiry if you have elected not to exercise yourself. This is generally accomplished by exercising rights for securities aggregated from multiple accounts that other clients have also declined to exercise because the fees related to these transactions for each account would make them uneconomic.
||Disclose||As expiry dates approach for certain types of securities we attempt to contact investors to determine if they want to exercise their rights before the securities expire.|
|Individuals who are registered or employed with us may participate in non- brokered private placements in advance of the shares being available on public markets.||Control||Professionals participating in these transactions are required to report their investment to the firm and they are prohibited from selling their securities for 6 months after a public offering by the issuer where RJL is the underwriter.|
|We review and preapprove transactions in non- brokered private placements and we may place shares belonging to individuals employed at the firm in escrow if there is a potential conflict with our clients.|
|Members of the committees overseeing Non-Brokered private placements are either prohibited from personally participating in these deals or not allowed to participate in the approval process if they plan to participate in the deal under consideration.|
|We may receive compensation from trading destinations, including electronic communication networks, market makers and exchanges in connection with trades we direct to such destinations through affiliates or directly.||Avoid Disclose||Industry regulations dictate our best price and best execution obligations to you.|
|We disclose to you any ownership interest we may have in marketplaces and our policies and procedures for order routing|
|We may permit certain individuals who are registered with us (including your advisor or account representative) to be employed by, participate in, or accept compensation from other persons or firms, outside the scope of his/her relationship with us.||Avoid||Securities legislation prohibits an individual from serving as a director of another registered firm that is not an affiliate of our firm.|
|Control||Industry regulations require individuals to disclose their outside business activities for approval.|
|Disclose||We prohibit participation in activity that competes with the firm’s business and discourage anyone from knowingly soliciting unrelated business with clients holding accounts at RJL. In the event that an advisor, associate or agent does solicit outside business they will advise you that the business is not related to RJL and that we are not liable for that business. If you have any questions or concerns contact our firm’s Compliance department directly.|
|We have discretion or control over transactions in your account if it is a managed account.||Control||Regulations require that we disclose and obtain your specific approval to purchase securities of related and connected entities when we have discretionary power to do so.|
|Avoid||Investment funds are subject to stringent conflict of interest requirements and oversight mechanisms.|
|We are required by securities legislation to prohibit transactions where the individual advisor may have an interest or have influence or control|
|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.||Control||Confidential information that cannot be publicly disclosed is protected through internal information barriers so that it is not shared and does not influence any Private Client advisory activities.|
| As a result of business relationships with issuers of securities, we may know confidential information that we cannot disclose to you when we recommend the securities to you, even if that information might lead us not to recommend buying the securities. We may at times be aware of material, non-public information about certain securities that we may be prevented by securities regulations or otherwise from using for the benefit of your
|Control||We operate our corporate finance, Private Client and Institutional Sales businesses separately so that such information is tightly controlled and not shared by corporate finance with our Institutional and Private Client advisory businesses.|
|Our internal information barriers are designed to ensure regulatory requirements are complied with and
Institutional and Private Client advisory employees do not have access to any non-public information that may be available to our corporate finance businesses.
|We may buy and sell securities for your managed account separately or as part of a larger transaction for you and others, including us. In doing so, we may be the buyer or seller either for ourselves or for any of our other clients. We do not have to initiate or recommend a purchase or sale for your managed account of any security or other asset that we or our affiliates may purchase, hold or sell for our own account or for accounts of our other clients.||Disclose||Potential conflicts are disclosed to you so that, when you evaluate our recommendations and actions, you can assess independently whether conflicts are significant for you.|
|We may have access to commercially sensitive or inside information.||Avoid||We may decline to provide a service to avoid insider trading provisions in securities legislation.|
|Control||We may have specific procedures for responding to conflicts of interests that involve inside information and for complying with insider trading provisions.|
|The investment managers creating model portfolios in the Partners Program account, and other entities with which they may be affiliated may have portfolio management, model portfolio, and/or advisory responsibilities to other persons or companies. One or more of the investment managers may make investment decisions for, or provide advice to, other persons or companies that differ from investment decisions made for, or advice given to, RJL or you through the model portfolio mandates even though the investment mandate in respect of such other persons or companies may be the same as, or similar to, the model portfolio mandate investment advisory services provided to RJL by the investment manager. The investment manager must act in good faith and make investment decisions with reference to the interests of its clients and its fairness policies. The investment manager will be executing transactions for discretionary, non- directed account clients of the investment manager (i.e. accounts over which the investment manager retains trading and brokerage authority) prior to updating and providing the model portfolio mandate to RJL.|| Disclose
|Investment Managers are required to manage the holdings in a model portfolio mandate to the stated mandate and must make investment decisions in the best interest of the clients.|
|Management has put in place compliance programs to monitor advisors to help identify and address concerns.|
|Potential conflicts are disclosed to you so that, when you evaluate our recommendations and actions, you can assess independently whether conflicts are significant for you.|