Conflict of Interest Analysis Matrix
| # | Conflict and Source (NI 31-103, other) | Materiality Level (High, Medium, Low or N/A) | Potential/Actual Impact | Control (demonstrate it has been addressed in the best interest of the client) |
|---|---|---|---|---|
| 1 | "Conflicts arising from third-party compensation s.13.4.1 NI 31-103" | High | It is an inherent conflict of interest for FCSL to receive third-party compensation (typically the issuer) | Control: Fees are negotiated for each specific mandate with oversight by COO and CCO Disclosure: All fees and charges are disclosed in KYC and Client Agreement that is signed by the Client. Dealing Representatives will also disclose the potential material impact (if any) that such conflict could pose to the client. |
| 2 | "Addressing conflicts between clients s.13.4.1 NI 31-103" | Medium | FCSL has internal systems to evaluate and document the balancing of competing client interests. FCSL allocates trades across client accounts and does not cross trade any securities between accounts. | Control: FCSL has a Fairness in Allocations Policy which provides that in the event that securities are purchased for the accounts of more than one client and an insufficient number of securities are available to satisfy the purchase order, the securities available will be allocated to the extent possible pro rata to the size of the clients' accounts. Disclosure: RDI discloses FCSL’s Fairness in Allocations Policy |
| 3 | "Individuals who serve on the board of directors or other Outside Activity s.13.4.1 NI 31-103" | Low | Material conflicts of interest arise if an individual acts as a director of a non-affiliated FCSL entity or acts as a director of an issuer. | Control: All outside business-related roles or relationships, such as directorships or trusteeships or any kind, or paid or unpaid roles with charitable organizations, must be approved by FCSL. Disclosure: FCSL discloses whether any applicable outside business activity related to any particular Issuer. Dealing Representatives will also disclose the potential impact (if any) that such conflict could pose to the client. |
| 4 | Owners/employees owning same securities as clients | Low | When individuals at FCSL invest in the same securities clients of FCSL, there is a perceived or potential conflict of interest that such individuals at FCSL may benefit from opportunities at the expense of FCSL’s clients. | Control: Owners and employees of FCSL do own the same securities as clients. We believe this provides aligned interests between the FCSL and the client. Dealing Representatives will also disclose the potential impact (if any) that such conflict could pose to the client. Control: As part of FCSL’s PPM, employees are subject to Code of Ethics and Conduct Policies requiring pre-authorizations prior to trading (for individual trades). Employees provide annual acknowledgement of compliance. |
| 5 | Fee arrangements make certain clients more profitable than others Other | Low | A material conflict of interest can arise should the FCSL charge a fee outside of or in excess of the fee schedule disclosed in the client’s KYC. | Control: Regardless of order size, each client is treated in a consistent manner. All fee arrangements that are specific to clients are disclosed in the KYC Disclosure: All fees and charges are disclosed in KYC. Dealing Representatives will also disclose the potential impact (if any) that such conflict could pose to the client. |
| 6 | Conflicts related to referral arrangements s.13.4.1 NI 31-103 | Low | Paid referral arrangements are inherent conflicts of interest which are almost always material conflicts of interest. | Disclosure: FCSL discloses whether it collects or pays any fees to another person, FCSL or corporation. Dealing Representatives will also disclose the potential impact (if any) that such conflict could pose to the client. Control: All referral arrangements are reviewed by the CCO and COO |
#: 1
Conflict and Source (NI 31-103, other) : "Conflicts arising from third-party compensation s.13.4.1 NI 31-103"
Materiality Level (High, Medium, Low or N/A): High
Potential/Actual Impact: It is an inherent conflict of interest for FCSL to receive third-party compensation (typically the issuer)
Control (demonstrate it has been addressed in the best interest of the client): Control: Fees are negotiated for each specific mandate with oversight by COO and CCO Disclosure: All fees and charges are disclosed in KYC and Client Agreement that is signed by the Client. Dealing Representatives will also disclose the potential material impact (if any) that such conflict could pose to the client.
#: 2
Conflict and Source (NI 31-103, other) : "Addressing conflicts between clients s.13.4.1 NI 31-103"
Materiality Level (High, Medium, Low or N/A): Medium
Potential/Actual Impact: FCSL has internal systems to evaluate and document the balancing of competing client interests. FCSL allocates trades across client accounts and does not cross trade any securities between accounts.
Control (demonstrate it has been addressed in the best interest of the client): Control: FCSL has a Fairness in Allocations Policy which provides that in the event that securities are purchased for the accounts of more than one client and an insufficient number of securities are available to satisfy the purchase order, the securities available will be allocated to the extent possible pro rata to the size of the clients' accounts. Disclosure: RDI discloses FCSL’s Fairness in Allocations Policy
#: 3
Conflict and Source (NI 31-103, other) : "Individuals who serve on the board of directors or other Outside Activity s.13.4.1 NI 31-103"
Materiality Level (High, Medium, Low or N/A): Low
Potential/Actual Impact: Material conflicts of interest arise if an individual acts as a director of a non-affiliated FCSL entity or acts as a director of an issuer.
Control (demonstrate it has been addressed in the best interest of the client): Control: All outside business-related roles or relationships, such as directorships or trusteeships or any kind, or paid or unpaid roles with charitable organizations, must be approved by FCSL. Disclosure: FCSL discloses whether any applicable outside business activity related to any particular Issuer. Dealing Representatives will also disclose the potential impact (if any) that such conflict could pose to the client.
#: 4
Conflict and Source (NI 31-103, other) : Owners/employees owning same securities as clients
Materiality Level (High, Medium, Low or N/A): Low
Potential/Actual Impact: When individuals at FCSL invest in the same securities clients of FCSL, there is a perceived or potential conflict of interest that such individuals at FCSL may benefit from opportunities at the expense of FCSL’s clients.
Control (demonstrate it has been addressed in the best interest of the client): Control: Owners and employees of FCSL do own the same securities as clients. We believe this provides aligned interests between the FCSL and the client. Dealing Representatives will also disclose the potential impact (if any) that such conflict could pose to the client. Control: As part of FCSL’s PPM, employees are subject to Code of Ethics and Conduct Policies requiring pre-authorizations prior to trading (for individual trades). Employees provide annual acknowledgement of compliance.
#: 5
Conflict and Source (NI 31-103, other) : Fee arrangements make certain clients more profitable than others Other
Materiality Level (High, Medium, Low or N/A): Low
Potential/Actual Impact: A material conflict of interest can arise should the FCSL charge a fee outside of or in excess of the fee schedule disclosed in the client’s KYC.
Control (demonstrate it has been addressed in the best interest of the client): Control: Regardless of order size, each client is treated in a consistent manner. All fee arrangements that are specific to clients are disclosed in the KYC Disclosure: All fees and charges are disclosed in KYC. Dealing Representatives will also disclose the potential impact (if any) that such conflict could pose to the client.
#: 6
Conflict and Source (NI 31-103, other) : Conflicts related to referral arrangements s.13.4.1 NI 31-103
Materiality Level (High, Medium, Low or N/A): Low
Potential/Actual Impact: Paid referral arrangements are inherent conflicts of interest which are almost always material conflicts of interest.
Control (demonstrate it has been addressed in the best interest of the client): Disclosure: FCSL discloses whether it collects or pays any fees to another person, FCSL or corporation. Dealing Representatives will also disclose the potential impact (if any) that such conflict could pose to the client. Control: All referral arrangements are reviewed by the CCO and COO