Legal & Regulatory

Kingwest & Company (“Kingwest”) has developed a Business Continuity Plan to respond to events that significantly disrupt our business. Since the timing and impact of disasters and disruptions is unpredictable, we will have to be flexible in responding to actual events as they occur. With that in mind, we are providing you with this information.

Our priorities after a significant business disruption are to allow our clients to transact business, recover and resume business operations, safeguard our employees and property, make a financial and operational assessment, and protect the firm’s books and records. We will strive to resume operations as quickly as possible, given the scope and severity of the significant business disruption. if the significant business disruption is so severe that it prevents us from remaining in business, we will assure our clients prompt access to their funds and securities through the facilities of NBIN and other client custodial agents.

Our Business Continuity Plan addresses: data back up and recover; all mission critical systems; financial and operational assessments alternative communications with customers, employees, and regulators; alternate physical location of employees’ critical suppliers, bank, and counter-party impact; regulatory reporting; and assuring our clients prompt access to their funds and securities if we are unable to continue our business.

If, after a significant business disruption, you cannot contact us as you usually do, at (416) 927-7740, please visit this website.

Kingwest & Company (“Kingwest”) has procedures to handle both written and verbal complaints.

If you have a complaint, please submit the details, preferably in writing, to a Compliance Administrator either by email compliance@kingwest.com, by mail to Kingwest & Company, Compliance Administrator, 86 Avenue Rd, Toronto, Ontario M5R 2H2, or by fax to 416-927-9264.

For confidentiality reasons, we will only communicate with you or an individual who has your express written authorization to speak on your behalf.

Complaint Handling Procedure

Kingwest will acknowledge all complaints within five business days of receiving the complaint. Our acknowledgement letter will include the name, job title, and full contact information of the compliance officer designated to handle this matter. The letter will include a statement indicating that you should contact the designated compliance officer for any inquiries about the status of your complaint. We will provide you with a brochure outlining the options available to you should the resolution of your complaint be unsatisfactory.

We will review all complaints fairly after gathering the necessary information, and we will provide you with our findings in a substantive letter. We will make reasonable effort to respond to all complaints as soon as possible and no later than 90 calendar days from the date of receipt by Kingwest. If we are unable to provide you with the substantive letter within 90 days, and we will provide you with reasons for the delay.

Settlements

In our letter we will either offer to resolve the complaint or deny it. You may have to sign a release. If the case offers a financial settlement, they will be provided with information regarding alternative options including arbitration, litigation, CIRO or OBSI if they are unsatisfied with our response.

This document describes the material conflicts of interest that exist, or that we reasonably expect to arise, between you and Kingwest & Company (“Kingwest”), or between you and any individual acting on our behalf. For each one it sets out three things: what the conflict is, how it could affect you, and what we do about it.

We provide this document when you open an account, and we will tell you in a timely way if a new material conflict is identified afterward. It is an overview of a detailed subject. If you have questions about anything in it, please contact your Kingwest representative or compliance@kingwest.com.

About our business

Kingwest provides discretionary investment management to individuals, families, corporations, charitable foundations and endowments. We also act as investment fund manager and portfolio manager to the Kingwest Managed Funds and Kingwest Avenue Partners L.P.

Kingwest is an Introducing Broker. National Bank Independent Network (“NBIN”) acts as our Carrying Broker and is responsible for trade execution and settlement, custody of your cash and securities, preparation of trade confirmations and account statements, and financing of client account positions. Kingwest remains responsible for determining suitability and for supervising all trading activity in your account.

Kingwest is a Dealer Member of the Canadian Investment Regulatory Organization (“CIRO”) and is registered with provincial securities commissions. Further information on how Canadian securities regulation addresses conflicts of interest is available from CIRO and from the Canadian Securities Administrators.

What a conflict of interest is, and what we are required to do

A conflict of interest exists where the interests of different parties; for example, yours and ours; are inconsistent or divergent, where we may be influenced to put our interests ahead of yours, or where a benefit available to us may compromise the trust you place in us.

Securities regulation requires us to:take reasonable steps to identify existing and reasonably foreseeable material conflicts of interest between you and Kingwest, and between you and any individual acting on our behalf;

• address every material conflict in your best interest;

• avoid any material conflict that cannot be addressed in your best interest, even where that means giving up business or a form of revenue; and

• disclose material conflicts to you at account opening, or in a timely manner if identified later.

A conflict is material if it may reasonably be expected to affect your decisions in the circumstances, our recommendations or decisions in the circumstances, or both.

How we address conflicts

We use three mechanisms:

• Avoidance. We avoid conflicts prohibited by law, and any conflict we cannot address in your best interest.

• Controls. We apply controls before and after the fact; pre-trade controls, post-trade reviews, supervision, written policies and procedures, training, and compliance monitoring.

• Disclosure. We tell you about conflicts that are not avoided, so you can assess their significance.

Disclosure on its own is never treated as sufficient. Controls are used together with disclosure in every case.

Employees are subject to the Kingwest Code of Ethics and must report any conflict they identify to Compliance promptly, as it arises. Every employee certifies annually that they have read, understand and have complied with the Code. We review our conflicts of interest inventory, the controls attached to each conflict, and this disclosure statement at least once a year, and whenever our business, products or services change.

The material conflicts we have identified

1. We offer primarily our own proprietary products

What it is. Your portfolio may hold units of the Kingwest Managed Funds or Kingwest Avenue Partners L.P. Kingwest manages those funds, distributes their securities, and is paid management fees based on their net asset values. Each is therefore a “related” and “connected” issuer of Kingwest under securities legislation. Our product offering is primarily proprietary; we do not operate an open shelf of third-party products.

How it could affect you. We have a financial incentive to place your assets in a Kingwest fund rather than in a third-party product that might be cheaper or better suited to you. Without controls, you could also pay fees at both the fund level and the account level on the same assets.

What we do about it.

• Fees charged in respect of the portion of your portfolio invested in a Kingwest fund form part of the total fees you pay to Kingwest.

• We maintain documented client profiles describing the types of investors for whom each mandate is appropriate, and we decline prospective clients who do not fit those profiles.

• We periodically compare our funds against comparable products available in the market that we do not manage, on performance, fees, costs, returns and risk, and we document that comparison and its conclusions.

• Our funds are subject to the same product due diligence, selection criteria and ongoing performance monitoring we would apply to any product.

• No employee receives any monetary or non-monetary benefit for placing your assets in a Kingwest fund rather than elsewhere.

• We monitor the use and level of proprietary product across client portfolios.

• We obtain an independent assessment of how effectively these controls work.

• Fund offering documents are provided to you as required.

2. Competing interests between clients — allocating investment opportunities

What it is. We manage concentrated portfolios and frequently buy or sell the same security for many accounts at the same time. Where an order is only partly filled, or a security is thinly traded, allocation decisions determine who receives what, and at what price.

How it could affect you. You could receive a smaller allocation, or a worse price, than another client, a Kingwest fund, or an account belonging to a Kingwest employee.

What we do about it. We maintain a written Fairness Allocation Policy. Under it:

• the intended allocation is determined and recorded before an order is entered;

• orders are blocked where possible, and partial fills are allocated pro rata at an average price;

• allocations are not changed after execution; any exception requires documented approval by Compliance;

• client orders take priority over accounts belonging to Kingwest, its employees and their related persons, which do not trade in a security until client orders are complete; and

• allocations and price dispersion between accounts are reviewed after the fact, with exceptions reported.

A copy of the Fairness Allocation Policy is available on request.

3. The fees you pay

What it is. Your fee is set out in Schedule B of your Investment Management Agreement. Fees may differ between clients, and in some circumstances are negotiable.

How it could affect you. You could pay more than another client receiving the same or substantially similar services, and we have an incentive to retain assets rather than to recommend that you reduce or withdraw them.

What we do about it. Our standard fee schedule is based on measurable criteria — including account size, the mandate selected and the level of service provided. We maintain written criteria for when a deviation from the standard schedule is permitted, and any deviation requires prior approval by Compliance or senior management, with the reason recorded. We are prepared to negotiate fees in the circumstances described in our fee schedule; please ask if you would like to discuss this. We provide documents setting out all fees, commissions and other costs before they are incurred, and an annual report of the charges you paid.

4. How we compensate our employees

What it is. Kingwest employees are not compensated on trading activity, and our compensation structure does not favour one product or service over another. A portion of compensation is linked to investment results.

How it could affect you. Compensation linked to investment results generally aligns our interests with yours. It can also create an incentive to take more risk than your mandate calls for in order to improve results. More broadly, a firm whose revenue depends on assets under management has an incentive to gather and retain assets.

What we do about it. Compensation does not differ by product, service, account type or client type, and includes no sales or revenue targets. Portfolio decisions are made against the stated mandate and monitored for consistency with it. Compensation arrangements are reviewed annually by senior management and the compliance committee, including a review for any pattern suggesting an individual placed their interests ahead of a client’s. Individual compensation is not set by the individual who receives it.

5. Our lead Portfolio Manager also holds our senior compliance roles

What it is. Richard Fogler is our lead Portfolio Manager and also serves as the firm’s Ultimate Designated Person and Chief Compliance Officer.

How it could affect you. The person responsible for managing portfolios is also responsible for compliance oversight of that function, and has an ownership interest in the firm’s revenue. Decisions that are right for you but reduce revenue; limiting the size of a strategy, declining a prospective client, adjusting a fee are made by someone who bears that cost personally. There is a risk that an issue is not detected or escalated as it would be at a firm where these roles are held by different people.

What we do about it. Compliance testing, account supervision and personal trading surveillance are carried out by staff outside the investment function. An alternate compliance officer, independent of the investment function, makes every compliance decision in which Mr. Fogler is the subject; including approval of his personal trades, any outside activity, and any fee exception, and may escalate directly to the compliance committee. Our compliance controls are reviewed periodically by an external party independent of the firm, which reports to the compliance committee.

6. Our relationship with our Carrying Broker, and cash held in your account

What it is. NBIN holds your cash and securities and finances account positions. Cash balances in your account may earn interest, and the arrangements between Kingwest and NBIN determine how any such interest is treated.

How it could affect you. If a portion of the interest earned on your cash is retained by the carrying broker or shared with us, you receive less than the full yield on your own money.

What we do about it. Kingwest engages in a net interest revenue split with NBIN. We review cash levels in your portfolio as part of ongoing portfolio management, and we review the rates credited on cash balances periodically.

7. Margin accounts and borrowing to invest

What it is. Kingwest’s general policy is not to carry margin accounts. We do so only in special circumstances at a client’s request, and only with Compliance and Ultimate Designated Person approval.

How it could affect you. Borrowing to invest increases both your assets under management and the interest revenue earned on the account, while increasing your risk. Your obligation to repay the loan and pay interest does not change if the value of your securities falls, so losses are magnified.

What we do about it. Margin is not recommended as part of our investment approach. Each margin account requires approval by Compliance and the Ultimate Designated Person, and the rationale is recorded. Kingwest does not receive compensation tied to the amount you borrow.

8. Personal trading by our employees

What it is. Kingwest employees may invest personally in the same securities we buy for clients.

How it could affect you. An employee could trade ahead of, alongside or against your account, obtaining a better price or a larger position at your expense.

What we do about it. Every employee must obtain prior written approval for trades in personal accounts and accounts in which they have a beneficial interest or control, including those of related persons and immediate family. Compliance maintains a restricted list of securities under research, purchase or sale, and applies blackout periods around client trading. Employees may not trade opposite a client position, and may not participate in a limited opportunity until client orders are complete. Trading records are collected and reconciled against brokerage statements and approvals monthly, and employee trade dates and prices are compared against client trades in the same securities. Breaches are escalated to the Ultimate Designated Person and carry consequences up to termination.

9. Personal financial dealings between employees and clients

What it is. An employee could enter into a financial arrangement with a client, or take on control over a client’s financial affairs.

How it could affect you. An employee’s personal financial interest could be placed ahead of your interests, and the risk is greatest where a client is elderly or otherwise vulnerable.

What we do about it. Personal financial dealings between employees and clients are prohibited. We prohibit personal loans between employees and clients except between immediate family members; we prohibit employees from acting as power of attorney, executor or trustee for a client, and from being named a beneficiary on a client account, except where the client is an immediate family member. Employees may not accept compensation from anyone other than Kingwest for activities carried out on a client’s behalf, and may not settle with a client or cover account losses personally without the firm’s prior written consent. Arrangements involving family members are reviewed and supervised by qualified compliance staff. Gifts or bequests from clients must be reported and approved. We maintain trusted contact person and temporary hold procedures to help protect vulnerable clients.

10. Outside activities and directorships

What it is. An outside activity is any activity or association outside Kingwest in which an employee is involved, whether or not they are paid for it — including serving on the board of directors of a company.

How it could affect you. An outside activity could reduce the time and attention an employee gives to your account, could create confusion about what is and is not a Kingwest service, or could influence which securities are recommended. A directorship is more serious still: a director owes duties to that company at the same time as owing duties to you, and may come into possession of confidential information that restricts our ability to trade a security.

What we do about it. We limit the outside activities in which employees may participate. Every outside activity must be disclosed and approved in writing by a qualified compliance supervisor before it begins, and is reported to regulators as required. Approvals are reviewed and reassessed annually. Directorships of companies held or researched in client portfolios are not permitted except in exceptional circumstances, and only with controls including recusal from decisions involving that company, placement of the company on our restricted list, monitoring by Compliance, and disclosure of the role to clients. Where a conflict arising from a directorship cannot be addressed in clients’ best interest, the employee is required to resign the position.

11. Referral arrangements

What it is. We may pay a fee to another party for referring clients to us, or receive a fee for referring a client to another party. A benefit does not have to be cash, and a mutual referral arrangement between two firms is itself a form of referral fee.

How it could affect you. A referral could be made for the fee rather than because it is right for you, and referred clients could receive different treatment from other clients.

What we do about it. All referral arrangements are in writing and approved at head office, and the details are disclosed to you before services are provided. A referral fee never increases the fee you pay, and referred clients are not charged more than other clients for the same services. Before referring you to another party we assess whether the referral is in your best interest, and conduct due diligence on that party; including registration status, qualifications, disciplinary and regulatory history and complaints — which we document and keep current. We monitor referral arrangements on an ongoing basis to confirm that referred and non-referred clients are treated alike and that all registerable activity remains with Kingwest.

12. Gifts and entertainment

What it is. Employees may be offered gifts, entertainment or hospitality by product providers, service providers or others we do business with, and Kingwest may provide hospitality to others.

How it could affect you. Hospitality could influence which products or service providers we favour.

What we do about it. Employees may not accept gifts, entertainment or compensation that could influence decisions taken in the course of their duties. Monetary gifts are prohibited.

13. Confidential and inside information

What it is. Our research involves direct contact with the management of companies we own or study.

How it could affect you. If we receive material information that is not public, we may be restricted from trading a security in your account until it becomes public.

What we do about it. Employees may not use confidential information acquired in connection with their duties. Any potentially material non-public information must be reported to Compliance immediately; the security is placed on our restricted list and trading is frozen for client, fund and employee accounts alike until the information is public or no longer material. Employees receive training on these obligations at hiring and annually.

14. Proxy voting

What it is. We vote proxies on the securities held in your portfolio. Occasionally we will hold a security in a company with which Kingwest or an employee has some other relationship.

How it could affect you. A vote could be influenced by something other than the economic interest of your portfolio.

What we do about it. We vote solely in the economic interest of client portfolios, under a written proxy voting policy. Where a conflict exists, the vote is escalated to Compliance and recorded, and we may abstain or follow the recommendation of an independent proxy advisory service. Our voting record is available to you on request.

Conflicts we avoid entirely

Some conflicts cannot be addressed in your best interest with any control we could put in place. We avoid these rather than manage them. They include:

• accepting any gift, entertainment or payment from a product provider in exchange for placing client assets in its product;

• entering into any arrangement under which we would be paid more for recommending one security over another;

• trading between client accounts other than as expressly permitted, at an independent price and with documented approval;

• borrowing from or lending to clients, other than between immediate family members; and

• any outside activity or directorship whose conflicts cannot be controlled.

Keeping this current, and how to reach us

We review this statement and the conflicts inventory behind it at least annually and whenever our business, products or services change. If a new material conflict is identified, we will tell affected clients in a timely way; and in time for you to consider it before it affects a transaction in your account.

If you have a question or a concern about anything in this document, or about your account, contact your Kingwest representative or compliance@kingwest.com. If you are not satisfied with our response, you may escalate your complaint; our complaint handling procedures explain how, including your right to take the matter to the Ombudsman for Banking Services and Investments. The conflicts of interest statement can be found on our website at https://www.kingwest.com/legal_regulatory

The units of the Kingwest Managed Portfolios are intended exclusively for Canadian residents. This document is provided for information purposes only to clients or potential clients of Kingwest & Company (“Kingwest”).

All dollar references herein are in Canadian dollars. Performance data set forth herein is gross of all management fees, unless otherwise stated. The performance data provided assumes reinvestment of distributions only and does not take into account sales, redemptions, distributions, optional charges or income taxes payable by any security holder that would have reduced returns. Management fees, commissions and expenses may all be associated with pooled fund investments such as an investment in units of the Kingwest Managed Portfolios. Pooled fund investments are not covered by the Canada Deposit Insurance Corporation or by any other government deposit insurer.

Past performance is not necessarily a guide to future performance. Unit values change frequently and past performance may not be repeated. The payment of distributions is not guaranteed and may fluctuate. The value of investments and income from them can fall and rise. Investments denominated in foreign currencies are subject to fluctuations in exchange rates, which may have an adverse affect on the value of the investments, sale proceeds and on income.

Units of the Kingwest Managed Portfolios are prospectus-exempt products, and are being offered on a continuous private placement basis in accordance with applicable securities legislation to investors who either invest a regulatory minimum of $150,000, or who meet the definition of “accredited investor” under the applicable Canadian securities legislation.

The S&P/TSX Composite Index Total Return has provided investors with a premier indicator of market activity for Canadian equity markets since its launch in 1977. With approximately 95% coverage of the Canadian equities market, it is the primary gauge for Canadian-based, Toronto Stock Exchange listed companies.

The S&P/TSX Composite Index Total Return is designed to offer the representation of a broad benchmark index.

The Total Return Index Value is based on the aggregate, float quoted market value of the index constituents (Stock Price Index Value) plus their paid dividends/distributions. The S&P 500, or the Standard & Poor’s 500, is an American stock market index based on the market capitalizations of 500 large companies having common stock listed on the NYSE or NASDAQ. It is one of the most commonly followed equity indices, and many consider it one of the best representations of the U.S. stock market.

All content on this website is owned and controlled by Kingwest & Company (“Kingwest”) and certain of the information is protected by copyright laws. You may download content only for your personal use for non-commercial purposes but no modification or further reproduction of the content is permitted. The content may otherwise not be copied or used in any way.

Kingwest will use reasonable efforts to include up-to-date and accurate information on this website, but makes no representations, warranties, or assurances as to the accuracy, currency, or completeness of the information provided. Kingwest shall not be liable for any damages or injury resulting from your access to, or inability to access, this website, or from your reliance on any information provided on this website.

Internet software or transmission problems could produce inaccurate or incomplete copies of various documents when downloaded and displayed on a user's computer.

The information and documents available on this website are not intended to provide specific legal, accounting, investment/financial or tax advice to any user.

This website is intended for use by residents of Canada. This website may provide links or references to other websites. Kingwest makes no representations, warranties or assurances as to any information on such websites and has no responsibility for the content of such other websites and shall not be liable for any damages or injury arising from such content. Any links to other websites are provided as merely a convenience to the users of this website.

The trademarks, service marks, trade names, trade dress and products on this website are protected internationally. No use of any of these may be made without the prior, written authorization of Kingwest, except to identify the products or services of Kingwest.
The sender of any communications to this website or otherwise to Kingwest shall be responsible for the content and information contained therein, including its truthfulness and accuracy.

This website is provided as a service to its visitors. Kingwest reserves the right to delete, modify or supplement the content of this site at any time for any reason without notification to anyone.

Canada’s federal privacy law, the Personal Information Protection and Electronic Documents Act (“PIPEDA”), effective January 1, 2004, requires that Kingwest & Company (“Kingwest”) obtain from all existing, new and prospective clients knowledgeable consent for the collection, use and/or disclosure of his or her personal information.

At Kingwest we have always maintained and used your personal information in the strictest of confidence. To this end Kingwest has policies and procedures that must be followed by all staff. Your personal information is collected, used and disclosed only where it is needed to service your account. This includes:

• Collecting your name, address, telephone number, social insurance number, date of birth and beneficiary information;

• Using information for preparing financial plans and for placing security trades;

• Sharing information with NBIN in order to execute trades on your behalf;

• Sharing information with other companies in order to service your needs such as account transfers, registered transfers and verifying your personal identity.

As well, for regulatory purposes, self-regulatory organizations (“SROs”), including the Investment Dealers Association of Canada to which Kingwest belongs, require access to personal information of current and former clients, employees, agents, directors, officers, partners and others that has been collected or used by Kingwest. SROs collect, use or disclose such personal information obtains from Kingwest for regulatory purposes, including:

• Surveillance of trading-related activity

• Sales, financial compliance, trade desk review and other regulatory audits

• Investigation of potential regulatory and statutory violations

• Regulatory databases

• Enforcement or disciplinary proceedings

• Reporting to securities regulators; and

• Information-sharing with securities regulatory authorities, regulated marketplaces, other self-regulatory organizations and law enforcement agencies in any jurisdiction in connection with any of the foregoing.

If you have any questions regarding how Kingwest collects, uses and discloses your personal information, or if you do not wish to receive information about our services or products, please contact our Privacy Policy Compliance Administrator at privacy@kingwest.com or at (416) 927-7740 or 1 (800) 850-6393.