This document is intended to provide required disclosure obligations for Meckelborg Financial Group Ltd (“MFG”, “we”, “us” or “our”) to our managed account clients. Please read through this document carefully and keep it with your investment management agreement.
When there is a material change to any of the information and disclosures detailed below, we will provide you with an updated copy of this document or direct you to our website at www.mfgltd.com for updated information.

 

A. Products and Services

MFG is registered as a Portfolio Manager in Saskatchewan (MFG’s home jurisdiction), Alberta, British Columbia, Manitoba & Ontario.
MFG is also registered as an Investment Fund Manager in the Province of Saskatchewan. Registration as an Investment Fund Manager is only required in MFG’s home jurisdiction, Saskatchewan. MFG is required to register as an Investment Fund Manager in other provinces if the firm conducts activities related to investment fund management from within that other province.

MFG is also registered as an Exempt Market Dealer in the provinces of Saskatchewan, Alberta, British Columbia and Manitoba.

MFG works with each client pursuant to the terms of an investment management agreement (the “Investment Management Agreement”). MFG provides discretionary portfolio management and investment counseling services to our discretionary managed account clients in accordance with the “know your client” (“KYC”) information that we collect from each client, as well as our understanding and assessment of the structure, risks and costs of investments on behalf of our clients, including investment products which we make available to our clients (referred to as “know your product” or “KYP” information).

KYC information includes information such as age, annual income, financial position, investment knowledge, investment objectives, risk profile and other relevant information. KYC information is used to confirm each client’s identity under anti-money laundering laws, and to help assess suitability of investments for each client in order to develop an investment policy for the client. MFG encourages each client to keep MFG informed of any changes to such KYC information to ensure that overall investment objectives remain consistent with each client’s individual circumstances.

MFG owes a duty to each client to act fairly, honestly and in each client’s best interests at all times. MFG actively manages each client’s discretionary managed account in accordance with the client’s KYC information. Investment management activities include selection of suitable securities and/or investment funds, investment portfolio structure, decisions as to purchase, sale, subscriptions, redemptions, rights and other matters relating to the client’s securities and/or investment funds, arranging with the custodian for disbursement or reinvestment of income, and providing periodic statements and meetings to review investment portfolio transactions and holdings. MFG may not have discretionary authority over certain investments held in a client’s account, in which case MFG will only transact on such investments based on a client’s instructions.

MFG does not hold physical custody of a client’s cash and investment assets. Cash and securities are held under custody by either National Bank Independent Network (“NBIN”) or Olympia Trust Company (“OTC”). NBIN, a division of NBF Inc., is a member of, and regulated by, the Investment Industry Regulatory Organization of Canada (IIROC). NBF Inc. is an indirect, wholly-owned subsidiary of National Bank of Canada, which is a federally chartered Schedule A bank and public company listed on the TSX. OTC, a division of Olympia Financial Group Inc., is licensed under the Loan and Trust Corporations Act (Alberta) to conduct trust activities and provide trustee services. Olympia Financial Group Inc. is a public company listed on the TSX. Client investment assets may be registered in the name of NBIN or OTC, but the client is the beneficial owner of such assets.
MFG clients who are invested in MFG mutual funds and pooled funds (the “Funds”) own units of the Funds and those units are recorded in the client’s name on the books and records of the Funds’ recordkeeper. Securities invested in by the Funds are registered in the name of the Funds’ custodian, NBIN.

Pursuant to the Investment Management Agreement MFG issues all instructions to NBIN on behalf of each MFG client for the purchase, sale and delivery of securities and cash held by NBIN for the client. MFG may also have access to a client’s investment assets held by NBIN where the client has provided written authorization of certain matters such as transferring assets between the client’s MFG investment accounts and withdrawal from the client’s account to pay MFG management fees and expenses.

 

B. Fees and Expenses

As consideration for managing the investments in your managed account MFG may receive a management fee. Aside from that management fee MFG does not charge additional fees to open, operate or maintain a MFG client account. MFG will provide at least 60 days’ written notice before any new or revised charge associated with the operation, transfer or termination of a MFG client account. However, you may also be charged certain fees or expenses by third parties who provide services in relation to your managed account. This includes fees or expenses charged by NBIN as custodian, as well as other investment brokers or dealers who may be engaged by MFG from time to time for the purpose of getting access to particular investments or to obtain better pricing for investments. These additional fees and expenses charged by these parties will vary from time to time and will be deducted from your managed account.

If MFG invests some or all of the assets of your managed account in the Funds or other types of investment funds, you will also bear a portion of the fees and other expenses paid by those funds. In addition, certain actions in relation to the purchase and redemption of your investment in an individual MFG Fund may be subject to further fees or expenses, a full description of which can be found in the MFG Fund information materials. However, if any of your assets are invested in MFG Funds MFG will ensure that the management fees paid in relation to your managed account do not duplicate any similar fees received by MFG from the MFG Funds. The fees received by MFG in connection with MFG’s role as manager of the MFG Funds are described in detail in the Fund information materials.

The details regarding fees and expenses for your managed account with MFG, including the management fee schedule and fee calculation process, are included in Schedule A of your Investment Management Agreement. Please contact your MFG representative for further information.

 

C. Account Statements

For any month that there is trading activity in your managed account, and at least quarterly, you will receive an account statement which will show all account activity including purchases and sales, contributions and withdrawals, dividends, interest earned and paid, transfers and any other transactions occurring during the applicable period. The statements will also list current holdings and the value of your portfolio as of the close of the last business day of the period. MFG will provide you with additional reports as and when required by securities legislation, including trade confirmations for nondiscretionary investment management accounts and distributions under MFG’s exempt market dealer license.

Please ensure that you review all account statements carefully and inform us of any inaccuracies or omissions within 60 days of the mailing date of the statement. If you do not contact us within that period, MFG will consider the account statement to be accurate and that you have authorized and accepted the transactions listed in your account.

 

D. Use of Performance Benchmarks

Comparing an investment portfolio’s performance to that of an appropriate benchmark is a useful exercise for monitoring purposes. Investment benchmarks are also helpful for developing realistic expectations about returns an investment portfolio can generate over the long term. Investment benchmarks usually provide a broad measure of the return generated by specific asset classes over a given period. A benchmark must replicate the security or portfolio you are monitoring as closely as possible for the comparison to be meaningful. For a portfolio composed of securities from several different asset classes the appropriate benchmark would be a blend of stock indices weighted according to the investment portfolio’s asset mix. Please contact your MFG representative for further information about comparing your portfolio’s return to a benchmark.

 

E. Consent to Electronic Communications

Under Canada’s anti-spam legislation (“CASL”) MFG is required to obtain your consent to send you emails and other electronic communications. MFG clients may provide applicable CASL consent to receive email and other electronic communications at the time the client’s MFG account is opened, or at any time thereafter. You may withdraw or amend such CASL consent at any time by notifying MFG by phone, mail or email.

 

F. Confidentiality and Privacy

The privacy and confidentiality of MFG client information is very important to us. We are committed to protecting MFG client information. In connection with our services we collect, maintain and may disclose personal information about MFG clients to meet legal, regulatory requirements, year-end tax preparation, and for any other purpose with your consent. Unless we are advised otherwise, by providing us with your personal information you have consented to MFG’s collection, use and disclosure of your information as provided herein.

Our core privacy principles are as follows: (i) All MFG staff are accountable for protecting personal information that MFG holds or alternatively transfers to a third party for processing; (ii) MFG will never sell your personal information; (iii) MFG limits the collection of personal information to only that which is required for the purposes identified; (iv) MFG uses or discloses personal information only for the purpose for which it was collected, unless you otherwise consent, or the use or disclosure is authorized or required by law; and (v) Personal information is kept as accurate, complete, and up to date as necessary, considering its intended use and your interests.

You may access your personal information held by MFG to verify its accuracy, to withdraw your consent to the collection, use or disclosure of such information, and to advise of any updates to such information. Note, your ability to participate in investments may require your continued consent to the collection, use and disclosure of your personal information.

Your personal information may be disclosed to applicable securities regulators for the administration and enforcement of applicable securities laws. By participating in certain investments you are deemed to have consented to and authorized such disclosure as may be required by applicable securities regulators. Any questions regarding a securities regulator’s indirect collection of personal information can be addressed to such applicable regulator.

 

G. Investment Risks

Before making any investment decision it is important to consider your investment objectives, your level of risk tolerance and the risks associated with the investment you are considering. There can be a strong relationship between the amount of risk associated with a particular investment and its potential to increase in value in the long term. However, investments with greater risk also have the potential to lose significant value in short or long term. Investment risks vary depending on the type of investment. MFG encourages you to review investment risks carefully prior to any investments. There are many risks associated with different investments including, but not limited to, the following:

• General investment risk – Changes in interest rates, economic conditions, and market and company news will result in frequent and substantial changes in the value of investments.

• Liquidity risk – Some investments may not be readily saleable.

• Currency risk – Securities denominated in a currency other than Canadian dollars will be affected by changes in the value of the Canadian dollar in relation to the value of the currency in which the security is denominated.

• Interest rate risk – Investments are affected by interest rate fluctuations – e.g. an increase in interest rates may reduce the return on fixed income securities.

• Business risk – The risk inherent in the operations and results of the entity or industry in which you have invested, including the risk associated with the amount of leverage or debt that the entity in which you have invested used to finance assets.

• Leverage risk – Investments may be purchased using available cash or a combination of available cash and borrowed money. If available cash is used to pay for the investment then the percentage gain or loss will equal the percentage increase or decrease in the value of the purchased investment. Using borrowed money to purchase investments can magnify the gain or loss on the cash invested.

• Private company risk – Investing in non-publicly traded companies can be more risky than investing in publicly traded companies. There is not an available market for private company securities so it can be difficult to buy or sell such securities to capture gains or limit losses.

• Commodities risk – Movements in commodity prices impacts the value of investments held in such commodities or in companies involved in such commodities.

• Foreign investment risk – Standards of accounting, auditing and financial reporting in foreign jurisdictions may not be as stringent as in Canada. Changes in foreign government, economic policy, exchange controls and currency policy can impact foreign investments.

• Specialization risk – Clients may prefer exposure to investments concentrated in a specific industry or geographic area. Such specialization magnifies the portfolio impact of any events or developments affecting such industry or geographic area.

 

H. Conflicts of Interest

In the course of MFG’s activities we have the responsibility to deal fairly, honestly and in good faith with our clients, and to act in our clients’ best interests. Situations can arise where the interests of MFG and a client may diverge or conflict. A conflict of interest would arise in any situation where there is inconsistency between your interests and those of MFG or any of our employees. MFG has a regulatory obligation to identify and respond to existing and potential conflicts of interest. Accordingly, we have taken steps to help us identify potential conflicts of interest on an ongoing basis and have established policies to address any identified conflicts and provide the necessary disclosure regarding any such conflicts of interest.

Generally any existing and potential conflicts are dealt with as follows:

• Avoidance: MFG avoids conflicts which are prohibited by law, as well as conflicts which cannot be effectively managed.
• Control: MFG manages acceptable conflicts through internal controls and processes designed to restrict the risk of the conflict.
• Disclosure: By MFG providing you with information about existing and potential conflicts, you are able to independently assess such conflicts’ significance when evaluating our recommendations and the actions that we take.

In cases where a material conflict exists between MFG and our clients, and for material conflicts of interest that are reasonably foreseeable and not avoidable, MFG will address the conflict in the best interest of our clients, and disclose any such conflicts to our clients in a timely manner upon identification of the conflict. Specifically:

(i) Where a client and one or more of the other clients of MFG are engaged in the purchase or sale of the same security, the transaction will be effected on an equitable basis. MFG will allocate opportunities to make and dispose of investments equitably among clients with similar investment objectives having regard to whether the security is currently held in any of the relevant investment portfolios or accounts, the relative size and rate of growth of the client and the other clients under common management and such other factors as MFG may consider relevant in the circumstances.

(ii) Every director, officer or employee of MFG shall conduct themselves in a manner consistent with the highest ethical standards. They will avoid any action, whether for personal profit or otherwise, that results in an actual or potential conflict of interest with a client or which may be otherwise detrimental to the interests of a client.

(iii) When a director, officer or employee is on the opposite side of a transaction from a client (e.g., the client sells a security and a director, officer or employee is the purchaser, or the client buys a security and a director, officer or employee is the seller), the director, officer or employee may be considered to have an “adverse interest” in the transaction. The Chief Compliance Officer or the Ultimate Designated Person or its delegate will ensure that any transactions executed on behalf of a client are in the best interest of such client.

(iv) The client’s interest has precedence over any MFG director, officer or employee’s personal interest. While there is no standard that applies in every case, in general, directors, officers and/or employees will solicit client orders before entering orders for personal accounts in the same security.

(v) MFG will ensure that its clients are adequately informed about any conflicts of interest that may affect the services provided to them. MFG will disclose, in a timely manner, the nature and extent of the conflict of interest to the client. MFG will use its best judgment for the best way and time to inform clients about these conflicts in order to provide such clients a reasonable amount of time to assess such conflicts.

(vi) MFG acknowledges that disclosure may not be appropriate if a conflict of interest involves confidential or commercially sensitive information, or the information amounts to “inside information” under insider trading provisions in applicable securities laws. In these situations, MFG will assess whether there are other methods to adequately respond to the conflict of interest and, if not, MFG may have to decline to provide the service to avoid the conflict of interest.

(vii) MFG will only recommend an investment by a client in a “connected issuer” where disclosure of such fact has been provided to the client prior to the time of purchase and MFG is reasonably satisfied that an investment in the issuer would be suitable for the client based on information supplied to MFG by the client.

(viii) If a conflict of interest is sufficiently contrary to the interests of a client that MFG cannot use controls or disclosure to respond to them, MFG will avoid such conflict, stop providing the service or stop dealing with the client.

The principal business activity of MFG is to act as a portfolio manager for separately managed investment accounts of its clients and for funds that MFG manages. In providing trading or advisory services to our clients it is important that our clients understand MFG’s interests in the service or transaction. We must make certain disclosures where we (i) act as your exempt market dealer; (ii) advise you; or (iii) exercise discretion on your behalf, with respect to securities issued by us, by a related issuer or, in the course of a distribution, by a connected issuer.

A description of the current and potential material conflicts of interest that may arise in the course of our business and the manner in which we will respond to each conflict are described in the sections below:

 

a. Related and Connected Issuers

MFG holds licenses and registrations which allow MFG to advise on investments and issue our own securities. Securities regulations require MFG to make certain disclosures and conform to certain rules with respect to MFG’s own securities or securities of issuers which MFG, or MFG related parties, are related or connected. MFG only engages in activities as an adviser or exempt market dealer with respect to related or connected issuers in compliance with applicable regulations. Note, related or connected issuers may receive management fees and/or performance fees from, or in relation to, such issuers and may pay trailing commissions or other fees to MFG in respect of client investments.
Under applicable Canadian securities laws an issuer is considered to be a “related issuer” of MFG if the person or company is an influential security holder of MFG, or if MFG holds positions permitting it, through ownership or otherwise, to exercise a controlling influence over such issuer, and would also include all companies under a common controlling influence.

An issuer is considered to be a “connected issuer” of MFG if the issuer is indebted to MFG, or has another relationship with MFG or those “related” to MFG that may lead a reasonable prospective purchaser of securities to question if MFG and such issuer are independent of each other in connection with a distribution of securities of the issuer.
The list of issuers that are related or connected to MFG can be found in the Policy Concerning Conflicts of Interest With Related and Connected Issuers attached hereto. MFG maintains a current list of related and connected issuers which can be viewed at www.mfgltd.com or can be obtained upon request from your MFG representative.

 

b. Referral Arrangements

We may establish referral arrangements and offer (or accept) payments to (or from) any third parties for the introduction of potential clients. If such an arrangement is ever put in place, we are required to detail the terms of the arrangement in a written agreement between MFG and the person or company that is making the referral. We also have to ensure that certain prescribed details regarding the nature of the referral arrangement are provided to any client that is referred to us prior to providing any services that result from the referral. MFG has adopted policies and procedures to identify and address any conflicts of interest that may arise from its participation in referral arrangements.

 

c. Broker Selection, Best Execution and Soft Dollar Disclosure For Managed Account Clients

When we execute a trade on behalf of a managed account, a brokerage commission is typically paid to the broker or dealer (“Dealer”). Brokerage commissions are paid for out of, or charged to, the client’s managed account (including the accounts of any investment funds managed by MFG). These commissions are treated as a cost to the managed account client when securities are traded. MFG has the ability to direct client brokerage transactions and the related commissions to a particular Dealer in return for order execution or research goods or services that assist us with investment or trading decisions, or with effecting securities transactions, on behalf of MFG clients. It is our objective to ensure that, over time, all MFG clients receive equal benefit from brokerage commissions paid to all Dealers. We will also make a good faith determination that each Dealer provides a reasonable benefit considering the trade execution provided along with our use of the goods or services provided by the Dealer relative to the amount of client brokerage commissions received by the Dealer.

This determination is made by reviewing commission summary reports along with trade cost analysis calculations made after a block trade is executed by each Dealer and by considering the quality and frequency of material provided to MFG that assist our portfolio managers in their investment decision‐making process.

We consider several factors when selecting a Dealer to execute a trade order. These factors include the Dealer’s ability to execute the order in a timely manner and communicate with MFG’s operations team as well as its ability to maintain confidentiality while completing the order in the marketplace. We also consider the Dealer’s trading expertise, reputation, integrity, financial stability, historical trading experience with MFG and its ability to charge commission rates which, when combined with all other services that it provides, offer the best execution for the given circumstances. “Best Execution” means the best overall qualitative execution, not necessarily the lowest possible commission cost.

Some Dealers with which MFG executes brokerage transactions provide research goods and services that include issuer‐specific research reports, industry summaries, economic commentary and access to meetings with company management or industry analysts that are associated with investment opportunities that MFG is considering. One Dealer provides access to software that allows MFG to execute trades in the marketplace in real time using a direct market access system.

 

d. Fair Allocation of Investment Opportunities

We manage accounts for both pooled investment funds and segregated client accounts (collectively referred to as “Accounts” or individually as an “Account”). It is our policy to ensure that we deal fairly, honestly and in good faith when allocating investment opportunities (which includes securities traded on public exchanges, private equity issues or participation in an initial public offering) across all Accounts so that no single Account or type of Account will receive preference in the allocation of investment opportunities.

The principal determination when allocating investment opportunities among client Accounts is the suitability of the transaction given each client’s particular investment mandate. When transactions are completed that will affect more than one Account, they will be bulked together and executed as one block trade. Once the block trade is completed, or partially completed if the order needs to be executed over more than one trading day, each Account will be given its pro‐rata share of the order so that all Accounts transact at the same price and pay the same rate of commission. If a block trade is completed using more than one Dealer, which results in materially different prices and/or different commission rates, then Accounts will be allocated their pro‐rata share from each of the separate trades.

Where it is not possible to apply a rigid pro‐rata formula when allocating a partially filled block order (for example, if the Dealer is only able to complete a very small portion of the total order) then other criteria will be considered in an attempt to ensure the allocations are fair and reasonable. Such considerations may include: (i) the proportion of the portfolio that the traded security represents; (ii) the overall weighting of the asset class or industry sector for the traded security in the Account; and (iii) the cash reserve position of the Account or the target weighting for the security in relation to the total size of the Account. If, for any reason, an investment opportunity cannot be allocated using a pro‐rata formula that can be applied to all participating Accounts then every effort will be made to address trading inequities at the next opportunity so that every Account will, over time, receive equitable treatment in the allocation of investment opportunities.

 

e. Personal Trading

MFG personnel may trade in the same securities as our clients. While some personnel invest directly in the Pooled Fund, others hold securities in Accounts that are segregated and therefore trades for these Accounts will be executed in the same individual securities held by MFG’s managed account clients. Where this is the case, every attempt is made to have MFG personnel trade right alongside clients so that all Accounts are treated fairly.

We have created a personal trading policy that MFG personnel must adhere to when executing trade orders for any Accounts where they, or an immediate family member, are a beneficial owner or where the MFG personnel influences control over the Account (the “Trading Policy”). The Trading Policy requires preclearance for all trades and enforces a blackout period where trading is prohibited under certain circumstances. MFG personnel are also obligated to attest on an annual basis to a full and complete list of all Accounts that would be subject to this policy.

 

f. MFG Code of Conduct

MFG personnel may at times find themselves in a situation where there is a conflict between their own personal interests and those of a client. In order to address these situations MFG has established specific policies and procedures that personnel must abide by (the “Code of Conduct”). MFG personnel must also attest to their knowledge and understanding of the Code of Conduct on an annual basis.
The Code of Conduct covers a number of potential conflicts; among them are situations involving outside business activities, accepting gifts and entertainment from service providers and the use of confidential information.

 

g. Complaint Process

We maintain detailed policies and procedures for handling client complaints which are outlined below. The Canadian Securities Administrators require all registered firms to ensure that the Ombudsman for Banking Services and Investments (“OBSI”) is made available as an independent dispute resolution or mediation service for all clients that have an eligible complaint. MFG is registered as a Participating Firm with the OBSI.

Any complaints with respect to the services provided by MFG should first be directed to a representative of MFG at:

Meckelborg Financial Group Ltd
300 – 728 Spadina Cres East
Saskatoon, SK S7K 3H2
Phone: 306-933-9993
Fax: 306-933-9975

When registering a complaint, please tell us what went wrong, when it happened and what you expect (for example: money back, an apology, an account correction).

We will acknowledge your complaint in writing, as soon as possible, but no later than five business days after receiving your complaint. We may ask you to provide clarification or more information to help us resolve your complaint. In order to help us respond as quickly as possible you should make your complaint as soon as possible after the event that causes the complaint occurs, reply promptly if we ask you for more information and keep copies of all relevant documents, such as letters, emails and notes of conversations with us.

We will provide written notice of our decision within 90 days of receiving your complaint which will include:

• A summary of the complaint
• The results of our investigation
• Our decision to make an offer to resolve the complaint or deny it. We will also include an explanation of our decision.

In the event that we cannot provide you with our decision within 90 days, we will inform you of the delay, in writing, as well as explain why our decision is delayed and give you a new date for our decision. If you are satisfied with our offer to resolve the complaint, we will proceed with our decision and the matter will be closed. However, if you are not satisfied with our decision you may be eligible for the OBSI’s dispute resolution service. You have the right to use OSBI’s service if:

• your complaint relates to a trading or advising activity of MFG or by a representative of our firm
• you brought your complaint to us within 6 years from the time that you first knew, or ought to have known, about the event that caused the complaint, and you file your complaint with OBSI according to one of these time limits:
o If we do not provide you with our decision within 90 days, you can take your complaint to OBSI any time after the 90‐day period has ended.
o If you are not satisfied with our decision, you have up to 180 days after we provide you with our decision to take your complaint to OBSI.

OBSI can recommend compensation of up to $350,000 and their service is available free of charge to clients of MFG. This does not restrict your ability to take a complaint to a dispute resolution service of your choosing at your own expense, or to bring an action in court, keeping in mind the time limits for legal action.

OBSI can best assist with your complaint if you promptly provide them with the following information:

• Your contact information, as well as contact information for MFG
• The name and contact information of any MFG representative involved with your complaint
• Details of your complaint
• All relevant documents, including any correspondence and notes of discussions with MFG.

OBSI works confidentially and in an informal manner. It is not like going to court and you do not need a lawyer. During its investigation, OBSI may interview you and representatives from MFG. We are required to cooperate in OBSI’s investigation.

Once OBSI has completed its investigation, it will provide its recommendations to you and us. OBSI’s recommendations are not binding on either party.

Contact information to file a complaint with OBSI:
By email at ombudsman@obsi.ca
By telephone: 1‐888‐451‐4519 or 416‐287‐2877 in Toronto
For more information about OBSI, visit www.obsi.com

 

POLICY CONCERNING CONFLICTS OF INTEREST
WITH RELATED AND CONNECTED ISSUERS

Under certain circumstances MFG may advise you in respect of securities transactions where the issuer of the securities or the other party to the transaction is a person having an ownership or business relationship with MFG. Since these transactions may create a conflict between MFG’s interests and yours, when we trade in or advise with respect to securities of related or connected issuers MFG will only do so in accordance with particular disclosure and other rules under applicable securities laws. Those rules require us to inform you of the relevant relationships and connections with the issuer of the securities prior to trading with or advising you.

Under applicable Canadian securities laws an issuer is considered to be a “related issuer” of MFG if the person or company is an influential security holder of MFG, or if MFG holds positions permitting it, through ownership or otherwise, to exercise a controlling influence over such issuer, and would also include all companies under a common controlling influence.

An issuer is considered to be a “connected issuer” of MFG if the issuer is indebted to MFG, or has another relationship with MFG or those “related” to MFG that may lead a reasonable prospective purchaser of securities to question if MFG and such issuer are independent of each other in connection with a distribution of securities of the issuer.

Before MFG advises you with respect to the purchase or sale of any securities of a related issuer, or in the course of a distribution of securities of a connected issuer, we will disclose the relationship to you prior to giving advice.

Before entering into a contract for the sale or purchase of the securities of a related issuer, and before accepting payment in connection with any such trade, MFG’s relationship with the related issuer will be specifically disclosed to you.
If you have given MFG the authority to exercise discretion in the purchase or sale of securities for your managed account we will not exercise that discretion for the types of transactions described above unless we have disclosed the relevant relationship to you and you have given your specific written consent.

The confirmation which is prepared and sent to you for the trade of any securities of a related issuer will contain the required disclosure.

In connection with investments by or on behalf of MFG clients in any related or connected issuers:

(i) MFG may receive management and incentive fees from such issuer.

(ii) MFG may benefit by virtue of our equity ownership in such issuer, as may be applicable, from its pro rata share of any profits earned by such issuer in connection with its management of the issuer.

(iii) MFG may benefit from its pro rata share of any profits earned by such issuer resulting, in part, from investments made by such issuer in another related or connected issuer.

A further potential conflict can arise due to the potential benefits to MFG described above from investments in such related or connected issuers which may create an incentive for MFG to make or recommend investments in such issuers rather than other investments which have been approved for purchase by or on behalf of MFG clients.

To address these conflicts of interest MFG has adopted policies and procedures which are designed to manage the conflict in a manner that places your interests as a MFG client ahead of MFG’s interests. Specifically, we have adopted the following policies to manage the conflicts of interest relating to investments by or on behalf of MFG clients in securities of such related and/or connected issuers:

(i) the decision to make an investment in a related and/or connected issuer on behalf of a MFG client shall be based solely on a determination that such investment is:
a. suitable for the MFG client based on the KYC information obtained from you and the KYP information we collect pursuant to our obligations under applicable securities laws; and
b. at least as suitable as other available investments that have been approved by MFG for investment by MFG clients; and

(ii) MFG will take steps to ensure that there is no duplication of fees payable by or on behalf of MFG clients in connection with investments in the securities of a related and connected issuer.
A list of related and/or connected issuers can be found in the attached Appendix A. MFG maintains a current list of related and connected issuers which can be viewed at www.mfgltd.com or can be obtained upon request from your MFG representative.

 

APPENDIX A
MFG RELATED AND CONNECTED ISSUERS

Related and Connected Issuers:

• Meckelborg Financial Group Funds – MFG is the manager and portfolio adviser of the Meckelborg Financial Group Funds, including the MFG Diversified Strategy Fund, MFG Top Picks Fund, MFG Global Equity Fund and MFG Alternative Strategies Fund, which are open-ended mutual fund trusts established under the laws of Saskatchewan and may, in the future, be the manager and portfolio adviser of other mutual funds, unit trusts or investment funds managed, administered or promoted by MFG (collectively, the “Related Funds”). MFG may from time to time exercise discretion to purchase and redeem units of the Related Funds for your managed account. If we invest the assets of your account in the Related Funds we will ensure that the management fees paid to MFG by you do not duplicate any similar fees received by MFG from the Related Fund. MFG will only engage in these types of transactions where they are permitted under applicable securities laws and where MFG believes they are in your best interests in the applicable circumstances. In most cases our connection to these Related Funds will be obvious to you because the names of the Related Funds will be sufficiently similar to MFG’s name. For example, in most cases the names of the Related Funds will include the word “MFG”. If we believe that the name of any Related Fund is not similar enough to convey the fund’s relationship to MFG, we will provide you with specific disclosure regarding that relationship at the appropriate time. All MFG personnel are subject to our Trading Policy which requires that all trades in non-exempt securities are reviewed and approved by our Compliance Team prior to execution. If any proposed trades could potentially be a conflict with our clients, the client’s interest will take priority.

• NorthPoint Global Partners Fund – NorthPoint Global Partners Fund (the “NorthPoint Fund”) is an open-ended mutual fund trust established under the laws of Ontario. MFG owns an 80% equity interest in NorthPoint Investment Partners Limited (“NorthPoint”), which is the investment manager and adviser of the NorthPoint Fund. Mark Teal, a Partner and Advising Representative of MFG, acts as the Chief Executive Officer, Ultimate Designated Person and a director of NorthPoint. Mark Meckelborg, a Partner and Advising Representative of MFG, acts as a director of NorthPoint.

Connected Issuers:

• Alignvest Student Housing Real Estate Investment Trust – Alignvest Student Housing Real Estate Investment Trust (“ASH REIT”) is an open-ended mutual fund trust established under the laws of Ontario. ASH REIT invests all or substantially all of its assets in the Canadian Student Living Group Limited Partnership (“CSL LP”) which, in turn, invests in and manages student housing accommodations in Canada. MFG holds shares of Canadian Student Housing Management Ltd., which is a minority shareholder of Alignvest Student Housing Inc. (“CSL GP”). CSL GP acts as the general partner of CSL LP. Mark Teal, a Partner and Advising Representative of MFG, acts as an observer and attends meetings of the Investment Committee of CSL GP as representative of Canadian Student Housing Management Ltd.

• StoreWest Limited Partnerships – MFG invests in certain self-storage and carwash projects in development and operation by StoreWest (the “StoreWest LPs”). The StoreWest LPs purchase existing self-storage and carwash facilities, as well as acquire property for development of new self-storage and carwash facilities, and operate and develop, as applicable, those existing and new self-storage and carwash facilities. MFG is a minority shareholder of the general partner corporations for each of the StoreWest LPs (each a “StoreWest GP”). Mark Meckelborg, a Partner and Advising Representative of MFG, acts as a director of each StoreWest GP. In most cases our connection to the StoreWest LPs will be obvious to you because the names of the issuer will include StoreWest. However, if we believe that the name of any StoreWest LP is not similar enough or the name is not obvious to convey the StoreWest LP’s relationship to MFG, we will provide you with specific disclosure regarding that relationship at the appropriate time.

• Member-Partners Solar Energy Limited Partnership – The business of Member-Partners Solar Energy Limited Partnership (“Solar LP”) includes investment and holding of commercial solar photovoltaic projects through its ownership interest in Fovere Glenbarra Energy Fund II Limited Partnership. 101299883 Saskatchewan Ltd. is the general partner of Solar LP, and Solar LP’s business is managed by 101299884 Saskatchewan Ltd. Mark Meckelborg, a Partner and Advising Representative of MFG, is the sole director and shareholder of 101299883 Saskatchewan Ltd. and 101299884 Saskatchewan Ltd.