Relationship Disclosure Document
Relationship Disclosure Document
Introduction:
Independent Direct would like to sincerely welcome you as a client of our firm. We very much hope to build a relationship with you that you will find to be highly satisfactory.
As with any relationship, it is often useful to begin with a clear understanding of the roles and responsibilities that each party has in that relationship. The purpose of this Relationship Disclosure Document is to do just that – to help you understand the nature of the services that you can expect to receive from our firm, including the fees and charges associated with those services. We are also required by investment industry regulations to request certain information from you, and we will explain why and when we need that information.
This Relationship Disclosure Document will be provided to you at the time you open your account(s) with Independent Direct (the “Firm”, “we”, “us” or “our”). If there are significant changes to the information contained in this Relationship Disclosure Document, we will provide you with an updated version by referring you to our website at www.independentdirect.ca or in hardcopy upon your request. If you have any questions related to the contents of this Relationship Disclosure Document, please contact us at info@independentdirect.ca.
This Relationship Disclosure Document covers the following topics:
- About us;
- Our products and services;
- Account types that we offer;
- Risks to Consider;
- Our relationship and responsibilities;
- Fees;
- How we address conflicts of interest;
- How we respond to complaints;
- Placing of temporary holds;
- Account reporting that we will provide;
- Other important information.
About us:
Independent Direct is a division of Independent Trading Group (ITG) Inc. providing an order-execution-only service.
Independent Trading Group (ITG), Inc. (“ITG”) with our Head Office located in Toronto, Ontario, is an investment dealer, where we operate in the highly regulated Canadian securities industry. ITG is registered in and conducts business under the securities laws and regulations of British Columbia, Alberta, Saskatchewan, Manitoba, Ontario, Quebec, New Brunswick, Prince Edward Island, Nova Scotia and Yukon. To view our record as a registered investment dealer, please visit the Canadian Securities Administrators National Registration Search at info.securities-administrators.ca/nrsmobile/nrssearch.aspx.
As an Investment Dealer, we are a member of the Canadian Investment Regulatory Organization (“CIRO”), the national self-regulatory organization, which oversees all Investment Dealers and trading activity on debt and equity marketplaces in Canada. CIROs carries out its regulatory responsibilities through setting and enforcing rules regarding the proficiency, business and financial conduct of its member firms, and individuals who conduct business on behalf of those firms, and through setting and enforcing market integrity rules regarding trading activity on Canadian equity marketplaces. For more information about CIRO, please visit their website at www.ciro.ca.
ITG is a member of the Canadian Investor Protection Fund (“CIPF”). The CIPF provides insurance for clients of member firms in the highly unlikely event of a firm bankruptcy. Coverage of up to $1 million of cash and securities held by the firm is available for various account types and groups of accounts. For more information, please see more details below or visit CIPF’s website at Canadian Investor Protection Fund (cipf.ca). At their website, you can also confirm our standing as a CIPF member. In addition, when you open an account with us, you will receive a copy of a CIPF brochure that also provides a summary of CIPF and their coverage limits. ITG is also a participating member of the various exchanges and alternative trading systems operating in Canada.
Carrying Broker – Fidelity Clearing Canada ULC
ITG operates as a Type 3 Introducing Broker under CIRO rules. This means that we have contracted with another party, known as a Carrying Broker, to provide us with back-office services. ITG’s Carrying Broker is Fidelity Clearing Canada ULC (“FCC”). FCC is an indirect, wholly owned subsidiary of 483A Bay Street Holdings LP, which is a joint venture between FIL Limited and Fidelity Canada Investors LLC. FIL Limited is a private, employee-owned company providing investment management services including mutual funds, pension management and fund platforms to private and institutional investors worldwide.
FCC and its registered affiliate, Fidelity Investments Canada ULC, conduct business under the “Fidelity Investments” brand which is a trademark of Fidelity Investments Canada ULC and a registered business name of Fidelity Canada. Each of Fidelity Canada and FCC are separate legal entities and conduct business independently of each other.
FCC, a CIRO and CIPF member firm, is a leader in the Canadian financial services industry with knowledgeable professionals experienced in providing core services, including brokerage processing, clearing and custody services, fully paid securities lending, transfer of assets, retirement distributions, margin, and tax reporting, all uniquely tailored to the Canadian market. Through its uniFide™ digital services platform, FCC provides ITG with full-service investment dealer back-office capabilities, enabling us to focus our time and energies on collaborating with our customers to deliver maximum relationship value. Please review the Introducing Broker / Carrying Broker Disclosure Statement below for more information on FCC and the responsibilities of each firm.
Registered Plan Trustee – TSX Trust Company
FCC has partnered with TSX Trust Company (“TSX Trust”) to provide trustee services for our registered plans. TSX Trust is a federally regulated Trust Company and the largest Canadian-owned transfer agent and provider of corporate trust services. Assets you hold in registered plans, such as RSP, RIF, RESP or TFSA accounts are in the safe custody of TSX Trust. Registered accounts are also separately eligible for CIPF coverage. Details of how this affects your accounts can be found in the various Declarations of Trust which are provided to you by FCC when you open a registered account.
Our Products, services and account types
We offer the following order-execution only investment products and services:
- Cash and cash-type instruments
- Equity investments, including stocks and warrants
- Fixed income and debt securities
- Investment funds, such as mutual funds and exchange-traded funds
- Options on stocks, bonds and other investments
- Fully-Paid Securities Lending Program
One of our investment representatives can explain these investment products to you, as well as how they work, and their risks.
Selling Restrictions
Clients may experience selling restrictions related to Over The Counter (OTC) securities, which typically have less trade liquidity due to low volume. If you would like to know more about any liquidity restrictions for your securities, please contact our trading desk and speak to an investment representative.
Product Restrictions
Please be aware of the following product restrictions:
- Independent Direct does not allow purchases of mutual funds with deferred sales charges (“DSC”) or trailer fees.
- Securities that have been issued a Cease Trade Order (“CTO”) by a securities commission are prohibited from trading over a certain period of time.
- Clients that are insiders of a publicly listed corporation are not permitted to purchase Share CFDs.
Mutual fund trailer fee restrictions
The Canadian Securities Administrators (CSA) announced that effective June 1, 2022, order execution only firms like Independent Direct should no longer hold mutual funds that pay a trailer fee.
If you transfer-in a trailer-paying mutual fund to Independent Direct after June 1, 2022, one of these situations could occur:
- If available, Independent Direct will switch your mutual fund from a trailer-paying class or series to a non-trailer-paying class or series of the same mutual fund. The only difference is a lower management fee for the non-trailer-paying class or series. This is a like-to-like switch.
- If a like-to-like switch is not available, Independent Direct will switch your mutual fund from a trailer paying class or series to a non-trailer-paying class or series of the same mutual fund. The only difference for the non-trailer-paying class or series are a lower management fee and a different dividend distribution policy and/or currency. This is a like-to-similar switch.
- If neither switch is available, you may continue to hold a trailer-paying mutual fund in your account. In this case the IFM will provide a management fee rebate. This will typically be rebated in the form of additional units in the fund.
- If none of the above options is available for your mutual fund, or if your mutual fund remains subject to DSC fees, the trailer-paying fund will remain in your account, and you will receive a dealer rebate, equal to the full amount of the trailer fee, which will be paid in cash to your account quarterly.
Order-execution Only accounts:
We offer our clients Order-Execution Only (“OEO”) accounts, which are commonly known as discount online brokerage accounts. You will receive no advice and there will be no suitability assessment of investments you make.
If Independent Direct offers information or analysis tools to you to assist you in making investment decisions, it is not recommending any specific products, securities or trading strategies.
You are encouraged to keep abreast of all research and announcements related to your investments.
Independent Direct will not be responsible for making any suitability determinations nor consider your personal and financial circumstances, investment needs and objectives, investment knowledge, risk profile, investment time horizon, nor other similar factors. The determination and appropriateness of investment products and account types are at the sole discretion of the client.
Types of Accounts We Offer
Non-registered accounts
Cash account
A cash account is a convenient method for overseeing all of your investments. In this type of account, it is necessary to maintain or deposit specific amounts to cover your purchases. Account available in Canadian and US dollars.
Margin account
A margin account enables you to borrow against the market value of eligible securities that are already in your account. The Canadian Investment Regulatory Organization (CIRO) establishes the maximum loan amount for eligible securities. This amount is subject to change based on the security’s market value and the type of investment. We are able to establish a more stringent value than the maximum loan amount. In order to partially settle the transaction, you are required to provide a specific sum of money, known as the margin deposit. You are responsible for the payment of interest on any amount that we lend you. This account type enables you to sell securities that you do not currently possess with the intention of repurchasing them at a reduced price in the future and potentially earning a capital gain. This type of transaction may result in a loss if you are obligated to repurchase the security at a price that exceeds the original selling price, as security prices can fluctuate unexpectedly. You are responsible for the payment of interest on any amount that we lend you. Account available in Canadian and US dollars.
Registered accounts
Tax-Free Savings Account (TFSA)
The TFSA is a savings method that allows your money to grow tax-free. The federal government establishes the contribution ceiling for the TFSA, regardless of your earned income. You have the option to catch up on any unused contributions from 2009 to the present. Capital gains and investment income (such as dividends and interest) are not subject to taxation. Account available in Canadian and US dollars.
First Home Savings Account (TFHSA)
The FHSA is a registered plan that is designed for individuals who are purchasing their first home. The government authorities have established a maximum contribution amount that is applicable to all individuals, irrespective of their earned income. Additionally, it is possible to make up any unused contributions for each year since 2023. Contributions are tax-deductible, and withdrawals for the acquisition of a first home, as well as investment income (such as dividends and interest), are not subject to taxation. Account available in Canadian and US dollars.
Registered Retirement Savings Plan (RRSP)
The accumulation of retirement funds is tax-free with an RRSP, and the current income taxes paid are also reduced. Contributions to an RRSP are subtracted from your current taxable income, which enables you to postpone taxation until retirement, when your income and tax rate are typically lower. Your RRSP account must be converted into an RRIF by December 31 of the year in which you reach the age of 71. Account available in Canadian and US dollars.
Registered Education Savings Plan (RESP)
The RESP assists in the financing of the post-secondary education of the individuals you designate as beneficiaries, typically your children or grandchildren. The returns on your investments accumulate tax-free until they are withdrawn. The Canada Education Savings Grant (CESG) will increase the amount you contribute by 20% of the first $2,500 (or less) of annual contributions, up to $500 per beneficiary a year. Your family’s net income may be the basis for the award of additional grants. Account available in Canadian and US dollars.
Locked-in Retirement Account (LIRA)
The LIRA is a retirement savings vehicle that permits the deposit of only pension fund amounts that are subject to provincial jurisdiction. A Life Income Fund or a life annuity must be converted into an LIRA by December 31 of the year in which you reach the age of 71. Account available in Canadian and US dollars.
Retirement income accounts
Registered Retirement Income Fund (RRIF)
The year you reach the age of 71, you, like all investors, will be required to convert your RRSP into an RRIF. It is one of the most logical decisions you can make, as the RRIF is a natural extension of an RRSP. The RRIF enables you to defer income taxes on capital and income until the invested amounts are withdrawn, in addition to enabling you to withdraw retirement income on a monthly, quarterly, semi-annual, or annual basis. The withdrawal amounts are at your discretion, provided that they adhere to the government’s mandatory minimum. Account available in Canadian and US dollars.
Options Trading: You can trade in the following types of options and option strategies:
- Purchase Options
- Sell Covered Options
- Spread Option strategies
- Sell Uncovered Options.
In an Options Trading Account, you can Purchase Options and Sell Covered Options on stocks, bonds, and other investments. Eligible accounts can trade in Spread Option strategies or Sell Uncovered Options on margin.
The settlement terms to purchase Options or sell Covered Options are the same as a Cash Account – you must have the full amount of cash or securities of sufficient value deposited in your account no later than one business days after the Trade Date.
Fully-Paid Securities Lending Program
Eligible accounts have the opportunity to enhance the return on your portfolio by lending your fully-paid securities. To learn more about all the benefits and particularities of the program, your eligibility or how to enroll, please contact us at info@independentdirect.ca
Account Documents
The following documents will be provided to you at account opening and will be made available thereafter on our website and client portal:
- Account Agreements & Disclosure Documents
- Relationship Disclosure
- Privacy Policy
- Best Execution Policy
- CIRO brochures
- How CIRO protects investors
- Making a Complaint: A Guide for Investors (Part 1 of 2)
- How Can I Get My Money Back? (A Guide for Investors (Part 2 of 2)
- The Canadian Investor Protection Fund Official Brochure
When you receive your account documents from us, it is important for you to review them carefully to ensure you understand their contents. You may also receive other documents that are relevant to your particular account. If you have any questions related to the contents of these documents, please contact us at info@independentdirect.ca.
Risks to Consider: Risks of borrowing
Using borrowed money to finance the purchase of securities involves greater risk than using cash resources only. If you borrow money to purchase securities, your responsibility to repay the loan and pay interest as required by its terms remains the same even if the value of the securities purchased have declined.
You should be comfortable about where your money is invested. This requires you to think about and understand your own risk tolerance and the risk level associated with your investments. It is important that you understand that your investment is not guaranteed. The greatest risk to you as an investor is that you could lose all or part of your investment. Unlike bank accounts or guaranteed investment certificates, stocks, bonds, money market securities and funds are not covered by the Canada Deposit Insurance Corporation or any other government deposit insurer. Please refer to your account opening documents to assess the risks and benefits of borrowing.
Our Relationship and Responsibilities:
Clearly understanding our respective responsibilities is vital to the success of our relationship. In this section, we will document those responsibilities, help you to understand what KYC information is and why we require it, and provide you with some guidelines on how to establish and define your overall objectives.
Responsibilities
The Firm’s responsibilities: Independent Direct is responsible for,
- Providing you with this Relationship Disclosure Document and related information.
- Reporting your account activity to you through trade confirmations, account statements and various other disclosures, many of which are referred to elsewhere in this document.
- Providing you with information about some investments that you make,such as prospectuses, offering documents and other product information
- Supervision of its Investment Representatives
- Handling any complaints regarding its services in a fair and reasonable manner.
Your responsibilities:
- You are ultimately responsible for making all investment decisions in respect of your account(s). As such, you are required to be an active participant in the relationship by keeping informed and keeping us informed. In order to achieve this, you are responsible for:
- Providing us with full and accurate KYC information
- Promptly informing the firm of any material changes to the KYC information previously provided. This may include such things as address or other contact information
- Carefully and promptly reviewing copies of all KYC information we will provide you at the time of account opening and any time that information is updated, to ensure that they are accurate.
- Ensuring that you understand the information contained in this Relationship Disclosure Document and asking questions of an Investment Representative where you require further clarification.
- Carefully and promptly reviewing all documentation provided to you including trade confirmations and account statements. You must report any errors or inaccuracies within the time limits prescribed on the documents.
- Being informed by reviewing your portfolio regularly, understanding the potential risks and returns related the investments in your account(s), reviewing all sales literature and product related information provided, being proactive by asking questions about specific transactions, investments and the relationship in general whenever such questions may arise, and by consulting the appropriate professionals as necessary, including accountants or lawyers for tax and/or legal advice.
- Ensuring that payment for transactions is made by the settlement date.
- Contacting the Firm if you are dissatisfied with the handling of the affairs in your account(s).
The Fees you will be paying and how they are calculated:
We offer you a choice of data packages, trading environments, and commission plans. We can help you choose the one that is appropriate for you based on how you expect to use the account and your personal preferences.
A list of our fees is provided on our website at: www.independentdirect.ca
The fees you will be pay for services we provide encompass the following:
- Costs of account operation and maintenance. These can include transfer fees, withdrawal fees, such as wire transfer and cheque fees, etc. Please find a list of administrative fees at www.independentdirect.ca
- Costs to buy, hold and sell investments. A list of our commissions, interest rates and fees is available at www.independentdirect.ca .
- Optional data package fees. Please find a list of our data package fees at www.independentdirect.ca .
- Fees charged to your account will negatively impact your performance which will lower your investment return over time.
- For information on Management Expense Ratios (MERs), related to your mutual fund or ETF purchase, please refer to the fund facts or ETF facts documents provided to you.
- Interest and Foreign Exchange
Notice of price changes
We will provide you with at least 60 days written notice of any new fee or changes in charges.
How we address conflicts of interest:
Actual, potential, and perceived conflicts of interest exist in almost all human interactions. Our relationship with you is no different. We have a legal responsibility to maximize economic benefit for our shareholders and other stakeholders, as well as an obligation to adhere to the highest ethical standards in our dealings with our clients. We believe the best way to achieve our goal is to provide you with trusted solutions that help you achieve your financial goals in order to retain your continued patronage and encourage you to recommend our services and products to others.
ITG is a proprietary trading firm that offers a broad range of corporate finance, institutional trading and retail client services and products. We recognize that, by definition, we are more susceptible to conflicts of interest than many other commercial activities since we may regularly represent both sides to a transaction, namely, the buyer and the seller.
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.
As an investment dealer, we are a financial intermediary. As is 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 offering those securities to our Independent Direct clients.
In general, we deal 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 their significance independently when evaluating our recommendations and any actions we take.
Our goal is to address conflicts in a fair, equitable and transparent manner, consistent with the best interest of our clients. We will try to avoid conflict where possible, and in all other cases either disclose the conflict, or manage it through internal controls and review processes. Conflicts deemed too significant to be addressed through controls or disclosures must be avoided. Disclosures will be made in a timely, meaningful and prominent manner.
Possible Conflicts and How They Are Managed
Conflict of Interest | How Conflicts Will Be Addressed |
We earn compensation by selling products and services to you for which you pay us. |
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We would like you to use more of our services and buy more of our products. |
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We would like you to use services offered by our referral business partners. We may enter into arrangements where we receive or pay a referral fee for referring you. |
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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. |
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We may sell you securities which we own (called principal trades) and profit by doing so. |
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We are paid by issuers of securities when we advise on or underwrite a new issue which we may offer to you. |
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When we advise on or underwrite a new issue, we are acting for the issuer that wants to obtain the highest price while offering the investment to purchasers who are interested in obtaining the lowest price. |
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If you hold an applicable security, we may be paid by issuers, offerors or others to solicit your proxy or vote in their favour with respect to takeover bids, corporate reorganizations, solicitation of proxies and other corporate actions. |
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As a result of business relationships with issuers of securities, we may know confidential information that we cannot disclose to you when we offer the securities to you, even if that information might lead us not to recommend buying the securities. |
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We may have access to commercially sensitive or inside information. |
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We engage in trading of securities for our own account (called proprietary trading). |
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Our employees may make permitted personal investments in private companies that manufacture investment products. |
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We may permit certain individuals who are registered with us to be employed by, participate in, or accept compensation from other persons or firms, outside the scope of his/her relationship with us. |
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Employees may be offered or receive a gift or entertainment from third parties, Which could be perceived to be financially motivated to put our interests ahead of your interest because of the gifts and entertainment |
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How we respond to complaints:
The fair and timely handling of client complaints is vital to the overall integrity of the investment industry. Independent Direct regards the handling of any client complaint as an essential element of servicing our client accounts and we have established written policies and procedures to ensure they are dealt with promptly and fairly. Any client complaints are handled by a designated Supervisor and filed immediately with ITG’s compliance department. CIRO Investor’s Guide to Making a Complaint is available on our website.
Placing of temporary holds:
Independent Direct will not place a temporary hold on a client’s account unless we have reasonable grounds to believe that the client does not have the mental capacity to make decisions involving financial matters. If a temporary hold is placed, we will document the facts and reasons that caused us to place the temporary hold and provide notice along with the reasons to the client as soon as possible. Independent Direct will, on a reasonably frequent basis, review the relevant facts as soon as possible after placing the temporary hold, to determine if continuing the hold is appropriate. Within 30 days of placing the temporary hold and, until the hold is revoked, within every subsequent 30- day period, do either of the following: a) revoke the temporary hold; b) provide the client with notice of our decision to continue the hold and the reasons for that decision.
Account reporting that we will provide:
Independent Direct will provide you with reporting to help you monitor your financial assets and performance through our carrying broker, Fidelity Clearing Canada. This reporting will come in the form of trade confirmations and account statements. While we do our utmost to avoid errors, misunderstandings and mistakes can happen. Accordingly, it is important that you review each trade confirmation and account statement promptly upon receipt and advise Independent Direct with the time limits disclosed on the documents if you believe there has been an error.
- Trade confirmations:
We will provide you with written confirmation of the details of every securities purchase or sale transaction that is processed in your account. These are generated and delivered electronically no more than two days after the transaction takes place.
- Account statements:
We will send you an account statement at least once per quarter, as long as there are cash and/or securities in your account. In any month where there has been activity in the account of any type, a monthly account statement will also be produced. Account statements include the details of all activity in your account including, among other things, all trades in securities (both those that settled in the period and those that are pending settlement at the statement date), deposits, withdrawals, transfers, dividends, interest, etc., as well as the opening and closing cash balance in the account. Your account statement will also provide you with a list of the current securities held in the account together with their book cost and market value.
Book cost on your statement is calculated in accordance with a regulatory definition and as such is not appropriate for tax purposes. Your statement includes detailed information regarding how book cost is calculated, as well as notations where part or all of a book cost amount has been determined using market value in lieu or is otherwise not determinable. In the event that we do not have an accurate book cost, you may update the information by providing us with appropriate documentation to support the book cost.
Our best efforts are made to obtain a market value for all securities; however, in some circumstances, we may be unable to obtain accurate or current valuations. For publicly traded securities, the market values generally reflect the last traded price on the primary market upon which the security trades, and are obtained from sources believed to be reliable, but we cannot guarantee their accuracy. For securities that are not listed on an exchange or that trade infrequently, the market value provided may be an estimate, which may not reflect the actual market value. For example, private, unlisted and restricted securities, with no quoted market value, may or may not be priced. Where a market value is reported for these securities, the price generally reflects the last traded price or the last issue price and may not necessarily reflect an accurate market value as of the statement date. As these securities are not readily marketable, Independent Direct cannot ensure the accuracy of such prices at any point in time. If a current market value is not available for a security, notations on your statement will identify whether the market value has been estimated or is deemed not determinable. Foreign exchange on US priced securities is calculated using the quoted closing spot rate for the statement date.
- Performance and other reporting:
Independent Direct will provide clients with an annual performance report for accounts with a debit or credit balance, or one or more security positions.
Tax reporting:
We will provide you with any required tax reporting, based on the type of account(s) and/or transactions within your account(s) each year. The most common of these are as follows:
- RRSP contributions;
- T4RSP – Statement of RRSP Income
- T4RIF – Statement of Income from a RRIF;
- T5 – Statement of Investment Income;
- T3 – Statement of Trust Income Allocations and Designations;
- T5013/T5013A – Statement of Partnership Income;
- NR4 – Statement of Amounts Paid or Credited to Non-Residents of Canada;
- Summary of Investment Income;
- Summary of Securities Transactions
There may be additional tax reporting as circumstances warrant. If you have any questions about the tax reporting you receive from Independent Direct you should contact an Investment Representative.
Other Important Information:
Disclosure of information to a Trusted Contact Person
All Independent Direct clients will be given the opportunity as part of the account opening process to provide the name and contact information of a trusted contact person along with the client’s consent to contact the trust contact person to confirm or make enquiries about any of the following:
Independent Direct’s concerns about possible financial exploitation of the client; Independent Direct’s concerns about the client’s mental capacity as it relates to the ability of the client to make decisions involving financial matters; the name and contact information of a legal representative of the client, if any; and the client’s contact information.
Performance Benchmarks and How to Use Them
You may assess the performance of your investments by comparing them to an investment performance benchmark. Benchmarks show the performance over time of a select group of securities. There are many different benchmarks. When choosing a benchmark, select one that reflects your investments. For example, the S&P/TSX Composite Index follows the share prices of the largest companies listed on the Toronto Stock Exchange. This index would be a good benchmark for assessing performance of a Canadian equity fund that invests only in large Canadian companies. It would be a poor benchmark if your investments are diversified in other products, sectors or geographic areas.
We do not provide benchmark comparisons in our account reporting.
Introducing Broker / Carrying Broker Disclosure Statement
Required by the Canadian Investment Regulatory Organization (“CIRO”). This statement contains important information. Please read it carefully and retain it for future reference.
Fidelity Clearing Canada ULC (“FCC”) is the Carrying Broker for the financial institution with whom you opened your securities account. Your financial institution (Independent Trading Group (ITG) Inc.) is independent of FCC and has retained FCC to provide certain recordkeeping and support services which will include some or all of the following:
- Custody of securities and cash
- Extension of credit on margin transactions
- Execution of trading
- Settlement of Securities transactions.
An Introducing/Carrying Broker Agreement has been established between FCC and your financial institution. The responsibilities of each of your financial institutions and FCC are outlined below. This brochure is not meant to be a complete summary of responsibilities but is meant to be a general disclosure.
Independent Direct’s Responsibilities
- Independent Direct has specific responsibility for the supervision and service of our securities account. It has its own personnel and has established its own policies and procedures and is responsible for abiding by all applicable laws and regulations.
- Independent Direct is solely responsible for obtaining the necessary documentation and subsequently approving the opening of your securities account(s). It is also solely responsible for knowing and understanding your investment objectives.
- Independent Direct is solely responsible for the acceptance, and in most cases, the execution of your securities transactions. It is also solely responsible for knowing all the necessary facts about any orders for securities for your account.
- Independent Direct is solely responsible for supervising the activities of any person or persons involved with you and your account, for the continued relationship with you and for promptly resolving any complaints you may have regarding the handling of your account.
- Independent Direct is solely responsible for correctly identifying and promptly forwarding to FCC any cash or securities it may come into possession of, on your behalf. FCC assumes no responsibility and has no involvement in any of the above matters.
FCC’s Responsibilities
- FCC is only responsible for those services it has been contracted to provide to your financial institution, as outlined in the Introducing/Carrying Broker Agreement.
- FCC will process orders to purchase, sell and/or transfer securities to or from your account with Independent Direct as it directs FCC. FCC is never obliged to accept orders directly from you, and will do so only in exceptional circumstances, and only once it has been specifically requested to do so by Independent Direct. It also reserves the right to refuse any order or account at its sole discretion.
- FCC will receive and deliver cash and securities for your account and will record this receipt or delivery on its books and records using the information provided to it by yourself or Independent Direct.
- FCC is responsible for the custody of your cash and securities only once they come into its physical control. It will provide custody services for your securities and cash, and will perform any voting, reorganization or collection or disbursement of dividends and interest necessary in relation to the securities we hold in custody for you.
- If, in discussion with Independent Direct, you choose to open a margin account, FCC or Independent Direct will loan you money for the purpose of purchasing, or selling short, securities in your account, in accordance with the terms of your account, Independent Direct’s margin account agreement, regulatory margin requirements and FCC or Independent Direct ‘s margin policies, which may be more restrictive than regulatory requirements.
- FCC will provide Independent Direct with reports summarizing all transactions processed on your behalf to enable it to fulfill its responsibilities under the Introducing Carrying Broker Agreement. In addition, FCC will assist you and Independent Direct in resolving any discrepancies and errors that may occur in the day-to-day operation of your account.
- FCC will prepare, and in most cases transmit to you, any trade confirmations for transactions undertaken in your account. In addition, it will provide periodic (at least quarterly if securities or cash are maintained in the account) account statements which will summarize transactions processed for or by you for your account.
- In providing the services to your financial institution, FCC may use the services of certain third-party service providers for such services as automatic data processing, clearing, settlement and custody, transfer, proxy voting services, and other similar services.
FCC does not control, audit, or otherwise supervise the activities of Independent Direct or its employees.
FCC Disclosure Statement
The safety and protection of your assets are of the utmost importance to FCC. FCC is a member of the CIPF. Customers’ accounts are protected for losses arising from the insolvency of a member firm for up to $1 million. An explanatory brochure is available upon request from your financial institution or directly from the CIPF website at www.cipf.ca.
Canadian Investor Protection Fund
The CIPF was created by the investment industry to ensure that client assets are protected, within defined limits, in the event of the insolvency of an investment dealer, who is a member of CIPF. All CIRO dealer members are required to be members of CIPF , and are subject to assessments for required contributions to the CIPF. The coverage limit is $1,000,000 for any combination of cash and securities within each separate account. Many investors will have two separate accounts, a general account and a retirement account, that are each eligible for the $1,000,000 of coverage. If an investor has several general accounts (cash, margin, US$ account, etc.) or several retirement accounts (RRSP, RRIF, etc.), these will be combined, respectively, into two separate accounts for purposes of CIPF coverage. The coverage amount applies to any shortfall in your account which may exist following the dealer insolvency, which, in most cases, will be substantially less than the value of your account(s).
CIPF does NOT cover losses from market fluctuations.
For more information on CIPF coverage, please visit their website at www.cipf.ca or contact us for an informational brochure.