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 advice and personalized financial solutions that help you achieve your financial goals in order to retain your continued patronage.
Peters & Co. Limited is what is referred to as an “integrated” investment firm since we provide a broad range of corporate finance, research, 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.
You can learn more about our firm at www.petersco.com.
As an investment dealer, we are a financial intermediary. As is the 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 recommending that our clients buy those same securities.
A conflict of interest may arise where:
- the interests of different parties, such as the interest of a client and those of a registrant, are inconsistent or divergent;
- a registrant may be influenced to put their interests ahead of their client’s interests; or
- monetary or non-monetary benefits available to a registrant or potential detriments to which a registrant may be subject, may compromise the trust that a reasonable client has in their registrant.
A conflict of interest is considered material in the circumstances when it may be reasonably expected to affect either or both of i) the decisions of the client and ii) the recommendations or decisions of the registered individual.
Identifying, Addressing and Disclosing Material Conflicts of Interest
Our goal is to identify, address and disclose material conflicts of interest in a fair, equitable and transparent manner, and consistent with the best interest of our clients. We are committed to putting our clients’ interests first, ahead of our own interests and any other competing considerations. We will address material conflicts of interest by either avoiding those conflicts or by using internal controls and review processes to mitigate those conflicts sufficiently so that the conflict has been addressed in our clients’ best interest. Conflicts deemed too significant to be addressed through controls or disclosures must be avoided. Disclosures about conflicts of interest, will be made in a timely, meaningful and prominent manner.
The following information will provide more detail about how we manage existing and reasonably foreseeable material conflicts of interest to assist you in assessing them and understanding how we address them in your best interests. The following information is intended to assist you in understanding and assessing material potential and actual conflicts of interest, including how we address them. If you ever have any questions or concerns, whether they involve conflicts of interest or anything else, you should never hesitate to say so and ask your advisor for an explanation and more information.
Canada has comprehensive and extensive securities regulatory rules and regulations, many of which are directed at protecting client and investor interests, including dealing with conflicts of interest. We suggest that you refer to the websites and publications of the provincial securities commissions through the Canadian Securities Administrators (CSA) and Investment Industry Regulatory Organization of Canada (IIROC) for more information on how Canadian securities regulations address conflicts of interest in order to safeguard the investing public.
We document our core values and standards, including general standards for how we deal with conflicts of interest. These are outlined in the tables that follow. Our investment advisors are trained to identify existing and reasonably foreseeable material conflicts of interest between themselves and their client and how to address such material conflicts of interest in the best interest of their client. Should a material conflict of interest be identified after account opening, the conflict will be disclosed, in a timely manner, after it has been identified to ensure you are given a reasonable amount of time to assess the conflict before making any investment decisions.
Note that we currently have no related or connected issuers, as stated in our Statement of Related Issuers, as follows:
The securities laws of the Canadian Provinces require securities dealers and advisors, when they trade in or advise with respect to their own securities or securities of certain other issuers to which they or certain other parties related to them, are related or connected, to do so only in accordance with particular disclosure and other rules. These rules require dealers, and advisors, prior to trading with or advising their customers or clients, to inform them of the relevant relationships and connections with the issuer of the securities. Clients and customers should refer to the applicable provisions of these securities laws for the particulars of these rules and their rights or consult with a legal adviser. Peters & Co. Limited currently is not related or connected to any such issuer of securities.
This Statement of Related Issuers will be updated in the event that Peters & Co. Limited should ever become related or connected to any issuers requiring disclosure, and such documentation will be available on our website at www.petersco.com. This Conflicts of Interest Statement will be updated in that event, as well, to reflect the additional procedures adopted to address the resulting potential conflicts.
This document was last updated June 2021.
Existing or Reasonably Foreseeable Material Conflicts of Interest and
the Potential Impact
How Conflicts Will Be Addressed
Ongoing Conflict of Interest
We earn compensation by selling products and services to you for which you pay us.
Our investment advisors may be perceived to be motivated to make recommendations that provide them with better compensation.
Our compliance and supervisory staff may be perceived to be motivated to ignore certain circumstances that may not be compliant but may increase their compensation.
We will inform you of fees, commissions and other compensation in advance so that you know what you will be paying.
We earn brokerage commissions on trades executed for you, and such commissions are negotiated between you and your investment advisor, subject to certain minimums. All commissions are disclosed on each trade confirmation.
We review the suitability of the securities held in your account when we make a recommendation or process a transaction on your behalf taking into consideration your stated investment needs and objectives. All trades are reviewed by our Chief Compliance Officer for suitability, fairness, reasonability and account appropriateness, considering your stated investment needs and objectives.
We have daily trading reviews reasonably designed to detect, among other things, conflicts of interest between your investment advisor and your trading activity, and unsuitable trading.
We have policies and procedures prohibiting recommendations solely for the purpose of generating revenues for us without any benefit to you.
The compensation of our compliance and supervisory staff is not tied to sales or revenue.
Trade instructions are only taken from individuals specifically authorized to provide them for each account.
The pricing for other services is documented in a fee schedule provided to you at the time of account opening, as well as any time there is a change in the fees related to any service.
We have a duty to act fairly and honestly in all dealings with you and in the marketplace in general, and to correct any errors that we may make.
We may receive compensation from securities issuers and other third parties based on their products we sell to you, such as “trailer fees” on mutual funds and commissions on securities offerings.
The trailer fees are not charged to you directly but these fees affect you as they reduce the amount of the fund’s return to you.
The products and services we provide are evaluated through a “know-your-product” process that does not consider potential compensation.
We disclose to you the situations and type of third-party compensation we may receive prior to placing any order on your behalf. In addition, securities regulations require issuers to provide specific disclosure of such arrangements and the compensation we will receive. These disclosures are generally found in the prospectus or other offering documents provided such as the Fund Facts of Mutual Funds offered.
Recommendations of such investments are based on the quality of the security without influence from any third-party compensation associated with the security.
All transactions are reviewed by the Chief Compliance Officer for suitability, pre-trade disclosure of fees to you, and to ensure fees are reasonable.
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.
These reduce the returns to you or increase your costs.
Various forms of other compensation we may receive are disclosed to you at account opening or at the time of the related transaction.
Spreads are monitored to ensure they are reasonable, fair and competitive.
We may sell to you securities which we own or buy securities from you (called principal trades) and profit by doing so.
It may be perceived that we would buy or sell at a price better than the current market price.
We will tell you whether we acted as principal or agent for each transaction on the trade confirmation.
Principal trades are reviewed to ensure you receive a price that is justified by the market and in your best interest.
In the case of fixed-income securities, (which we usually transact as principal) we provide you with a stated yield to maturity so you can assess the competitiveness of our pricing. Comparable prices/yields are obtained from two different sources to ensure your price is fair and reasonable.
Where a recommendation is being made by an investment advisor on a security in which they have an investment, this fact will be disclosed at the time of the recommendation.
We may need to select which clients will be offered certain securities if availability is limited.
When we are involved in the issuance of new securities, there may be a higher expression of interest from our clients than the amount of securities we were allocated for the offering.
We allocate investment opportunities among our clients fairly so as not to intentionally favour one client over another.
Such allocations may not be influenced by guarantees of future business.
Securities may be made available to clients based on certain conditions set by issuers, as well as regulatory requirements. Not all securities are available to all clients.
Suitability of the investment to any particular client, as well as client priority are fundamental considerations.
We execute trades in accordance with best execution requirements under applicable law. Any competing interests among clients are addressed fairly and transparently between clients by allocating on a pro rata basis, if required.
We endeavor to treat all clients on a basis that is fair and reasonable in the context of the nature of the particular transaction and the transaction costs.
We are paid by issuers of securities when we advise on or underwrite a new issue which we may recommend to you. In these instances, we are acting for the issuer that wants to obtain the highest price while recommending the investment to purchasers who are interested in obtaining the lowest price.
We may be perceived to be motivated to offer, buy or advise on securities for which we are receiving other fees from the issuer.
We have structurally segregated our corporate finance and retail advisory businesses, which prevents the sharing of non-public information by our corporate finance business (having the relationship with the issuer) with our retail advisory business (having the relationship with clients like you).
Pricing must consider current market conditions, market value and the specific securities being offered.
In all instances, the investments must be suitable for you, in line with your stated investment objectives and risk profile.
The offering documents provide full disclosure of all relationships we may have with the issuer, including the compensation arrangements related to the transaction.
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.
We may be perceived to be motivated to advise on securities or transactions for which we are receiving other fees from the issuer.
We disclose all compensation to you. Securities regulations require specific disclosure of such arrangements and the compensation we will receive in documents such as information circulars, takeover bid circulars and issuer bid circulars.
As a result of business relationships with issuers of securities, we may know confidential information that we cannot disclose to you when we recommend the securities to you, even if that information might lead us not to recommend buying the securities.
We may be unable to make recommendations to you in these situations.
We operate our corporate finance and retail advisory and other businesses separately so that such information is tightly controlled and not shared by corporate finance with our retail advisory and other businesses.
Our internal information barriers are designed to ensure regulatory requirements are complied with and retail advisory and other employees do not have access to any non-public information that may be available to our corporate finance businesses.
Our corporate finance business is obligated to maintain confidential any such non-public information obtained from issuers.
We may have access to commercially sensitive or inside information.
We may be unable to make recommendations to you in these situations.
We may decline to provide a service to avoid insider trading provisions in securities legislation.
We have specific procedures for responding to conflicts of interests that involve inside information and for complying with insider trading provisions.
Confidential information that cannot be publicly disclosed is protected through internal information barriers so that it is not shared and does not influence any retail advisory activities.
We provide investment research on securities of companies that may have other business relationships with us.
Research reports and recommendations are issued in an effort to ensure you are well informed to make knowledgeable investment decisions and not to promote any issuer we may cover in our research recommendations and/or reports.
Our research and recommendations are subject to extensive and detailed regulatory requirements and internal standards. These include controls over communications between our corporate finance and the research departments, issuers and the research department, detailed reviews and approvals of trading activity, particularly around the issuance of research reports, etc.
Extensive disclosures are made in our research reports to enable you to assess the risk of conflict on your own. These include compensation received related to both investment banking and non-investment banking services, ownership by the firm or the analyst, compensation of analysts, rating systems and distributions, including where corporate finance services have been provided, among other things.
You can review the standards our research analysts are required to comply with at www.iiroc.ca and search for Dealer Member Rule 3400 (Effective December 31, 2021 IIROC Rule 3600).
We engage in trading of securities for our own account (called proprietary trading).
We may be perceived to be putting our interests ahead of yours by transacting in our own accounts.
We maintain information barriers between our corporate trading activities and retail advisory and other business.
Firm and employee trades are identified as such and client trades are given priority to firm and employee trades in accordance with industry “client priority” regulations (taking into consideration the time and price of each order, etc.). The trade confirmation for each transaction will indicate whether we acted as principal.
Proprietary trading is subject to detailed reviews, controls, concentration limits, etc.
We may receive compensation by trading destinations, including electronic communication networks, market makers and exchanges in connection with trades on markets we direct to such destinations.
This may create a potential or perceived conflict of interest if we direct trades to a marketplace who provides us with benefits or rebates.
Industry regulations dictate our best price and best execution obligations to you.
We are not owners in any marketplaces, nor do we act as market maker in any securities.
Neither the fees we pay nor the rebates we receive are passed on to you. Our order routing strategies are not based on fees or rebates.
Individuals registered with us may also be registered with another registered firm related to Peters & Co. Limited and provide services to clients of that firm.
Our investment advisors may be perceived to be focusing on clients of one entity over the clients of the other entity or sharing information between the two entities.
This is not relevant to our private clients since our private client investment advisors are not dually registered.
These relationships are subject to legislative and industry regulatory requirements that impose restrictions on dealings between related registered firms and/or individuals that are dually registered with a related registered firm. Such restrictions are intended to minimize the potential for conflicts of interest resulting from these relationships.
We have adopted internal policies and procedures that supplement the regulatory requirements, including policies on privacy and confidentiality of information.
For sake of clarity, the only registered affiliate of Peters & Co. Limited is its subsidiary, Peters & Co. Equities Inc., registered in the USA with the Financial Industry Regulatory Authority and the U.S. Securities and Exchange Commission. As this business is structured to deal with US institutional customers only, no retail advisors of Peters & Co. Limited are registered through that entity.
We may permit certain individuals who are registered with us (including, potentially, your investment advisor or account representative) to be employed by, participate in, or accept compensation from other persons or firms, outside the scope of his/her relationship with us.
Conflicts may arise when an investment advisor is involved in outside business activities either because of the compensation they receive for these activities or because of the nature of the relationship between the investment advisor and the outside entity.
Outside business activities could cause the investment advisor to put such interests ahead of yours.
No business activities outside of the scope of our business are permitted for any retail advisors where conflict or perceived conflicts may exit, where there is any risk of disruption to client services or any confusion as to who is providing a client service, or any such business viewed as disreputable or inappropriate.
All employees must disclose to us and obtain our approval of all outside business activities prior to the activities commencing. Approval may be granted after a review of these activities confirms they would not impair the employee’s ability to provide adequate client service. Any existing and reasonably foreseeable material conflicts of interest would be identified, and appropriate steps taken to address such conflicts in the best interest of our clients.
Approval will be granted only if these activities do not involve activities that are inconsistent with securities legislation or IIROC requirements, and do not interfere with the investment advisor’s ability to remain current on securities law and product knowledge.
All outside activities must be consistent with the investment advisor’s duty to deal fairly, honestly and in good faith with their clients.
All outside business activities of our registered employees are disclosed to our regulator and the regulator must be satisfied they do not create a material conflict of interest.
Conflicts of interest can arise where an investment advisor has personal financial dealings with you, including where they are appointed as a trustee or granted a power of attorney and have control or authority over your financial affairs, or where the investment advisor acquires assets from you outside of our investing relationship.
These dealings could cause the investment advisor to put their interest ahead of yours in taking any investment action.
We have policies and procedures in place, in compliance with securities regulations, which prohibit employees and investment advisors from directly or indirectly engaging in any personal financial dealings with clients who are not family members.
To do so is considered inappropriate conduct, a material conflict of interest and a violation of the general business conduct standards.
We obtain certifications from each employee at the time of their hiring and annually thereafter to control this potential conflict.
Individuals may serve on a board of directors or take on other activities that could take time or attention away from your account.
This may result in conflicting duties owed to the company and to our firm or to you, possible receipt of inside information, and conflicting demands on the employee’s time, as well as inherent conflicts where the company is an issuer of securities that we may recommend to you.
Securities legislation prohibits a registered individual from serving as a director of another registered firm that is not an affiliate of our firm.
Our employees are prohibited from engaging in activities that would interfere or create conflict with their duties. We have policies in place to detect and, where applicable, supervise, disclose or prohibit any conflicts of interest.
Employees wishing to act as directors or officers of a public or private company must receive prior approval from us and, if approved, will be reported as an outside business activity to our regulator.
When an employee sits on a board of directors in any substantive way, they are subject to regulatory guidance on the disclosure and approval of outside business activities.
We have adopted internal policies and procedures that supplement the regulatory requirements. As a general rule, we prohibit employees from acting as directors of any company we cover.
We obtain and possess personal non-public information about you and the securities you hold in your account.
It may be perceived that our employees, including your investment advisor, could use non-public information about you and the securities you hold in your account for their own personal trading and benefit.
All trading activity, including our employee trading, is reviewed on a daily basis by our Chief Compliance Officer.
Individuals may receive or give gifts, gratuities or entertainment opportunities as a result of their relationships with clients.
Such actions may be perceived as compromising our independence and/or putting our own interests ahead of yours.
Our policies prohibit employees from accepting or giving any gift or entertainment opportunity which is intended to improperly influence a business decision. We have strict guidelines and limits on what are appropriate and acceptable gift and entertainment practices, including review and approval processes relative to these.
June 30, 2021
Back to Top ∧