Relationship Disclosure Document

Transcription

1 Relatinship Disclsure Dcument Intrductin Lightyear Capital Inc. wuld like t welcme yu as a client f ur firm. We very much hpe t build a relatinship with yu that yu will find highly satisfactry. The purpse f this Relatinship Disclsure is t help yu better understand the nature f the services that Lightyear Capital Inc. ( Lightyear, the Firm, we, us r ur ) prvides and what yu can d t help ensure a satisfactry nging relatinship with us. We are als required by investment industry regulatins t request certain infrmatin frm yu and we will explain why and when we need that infrmatin. The Relatinship Disclsure Dcument will be prvided t yu at the time yu pen yur accunt(s) with Lightyear. If there are significant changes t the infrmatin cntained in this Relatinship Disclsure Dcument, we will prvide yu with an updated versin by referring yu t ur website at r in hardcpy upn yur request. If yu have any questins related t the cntents f this Relatinship Disclsure Dcument, please cntact yur Investment Advisr. This Relatinship Disclsure Dcument cvers the fllwing tpics: Abut us; The services and types f accunts we ffer; The type f prducts we ffer; Our relatinship and respnsibilities; Hw we assess suitability; Hw we address cnflicts; Hw we respnd t cmplaints; Accunt reprting that we will prvide; Fees and charges; Other imprtant infrmatin; and A checklist f dcuments t be prvided t yu. 1. Abut us Lightyear is an independent investment butique fcusing n small-mid cap cmpanies. The Firm ffers investment services t institutinal investrs and private clients and is an active underwriter fr, and financial advisr t, small cap cmpanies seeking private and/r public equity. Lightyear is what is referred t as an intrducing brker investment firm. Our client accunts are held in a custdy arrangement with ur carrying brker ( CB ), Haywd Securities Inc. The CB executes, settles and reprts all yur trade activity t yu and prvides Lightyear, (and cnsequently t yu) an indemnity assuring yu that the investments shwn n yur statements are held by them as custdian. If under any circumstance, any trade activity fr yur accunt is nt reprted n a trade cnfirmatin and yur mnthly statement, immediately reprt such missin t Lightyear Cmpliance. Lightyear is a member f the Investment Industry Regulatry Organizatin f Canada ( IIROC ) and the Canadian Investr Prtectin Fund ( CIPF ). The Firm is a participating member f the TSX Venture Exchange and is registered in Alberta, Ontari, British Clumbia, Saskatchewan and Manitba. 2. The services and types f accunts we ffer. Brkerage firms may be apprved t prvide varying levels f service t their clients based n the types f accunts available. This can include managed accunts, where a prtfli manager independently exercises authrity t make investment decisins within the framewrk f the agreed upn bjectives f the accunt, rder-executin nly Lightyear Capital Inc. Relatinship Disclsure Dcument July, 2014 Page 1 f 11

2 - 2 - accunts, where yu receive n advice frm an advisr at all and are entirely respnsible fr yur wn investment decisins, r advisry accunts, where an investment advisr makes recmmendatins t yu n investment ideas, upn which yu may r may nt decide t act. Lightyear ffers advisry accunt services nly. Yur Investment Advisr is respnsible fr prviding suitable and unbiased investment recmmendatins t yu based n the knw yur client ( KYC ) infrmatin yu prvide t us (see the Our relatinship and respnsibilities sectin f this Relatinship Disclsure Dcument fr details n KYC infrmatin), and yu may chse t act upn these recmmendatins r nt. In an advisry accunt, yu are ultimately respnsible fr yur investment decisins, althugh yu may rely n the advice prvided by yur Investment Advisr. The Investment Advisr is respnsible fr the advice prvided, and must meet an apprpriate standard f care in prviding that advice. We may ffer additinal prducts and services ver time and as they are develped. We will infrm yu f such new fferings thrugh cmmunicatins in yur statements r with yur Investment Advisr, and by keeping the mst current versin f this Relatinship Disclsure Dcument psted n ur website at Advisry accunts are cmmissin based accunts. A cmmissin based accunt is an accunt in which yu will be charged a cmmissin fr each transactin made fr yur accunt (buy r sell). Smetimes investments purchased n yur behalf may als pay us fees, such as trailer fees in the case f mutual funds and agent s fees in respect f new issue business. In such cases, it is uncmmn that yu wuld incur any ther additinal charges in cnnectin with the purchase r sale f these investments r similar prducts. Cmmissin rates are established by yu and yur Investment Advisr in accrdance with industry standards and the Firm s plicies. With yur advisry accunt, yu may pen ne r mre f the fllwing accunts: Cash accunts: invlve standard cash settlement f transactins, three days after the day yur trades are executed; Margin accunts: ffer sme level f brrwing capacity, secured by the value f the securities held in yur accunt and based n bth regulatry lan value rates and ur mre stringent internal credit plicies (See the Leverage Risk Disclsure Statement in the Other imprtant infrmatin sectin f this Relatinship Disclsure Dcument); Cash-n-delivery ( COD ) accunts: the settlement f yur trades takes place between us and yur designated custdian n a delivery vs. payment basis; Registered retirement savings plans and incme fund accunts ( RRSP and RRIF ): these are accunts intended t hld yur eligible retirement savings investments and assets, in accrdance with the regulatins and restrictins n their peratin, as prescribed in the Canadian Incme Tax Act; Registered educatin savings plan accunts: these accunts are intended t hld funds fr yur child s pst-secndary educatin, in accrdance with the regulatins and restrictins n their peratin, as prescribed in the Canadian Incme Tax Act; and Tax free savings accunts ( TFSA ): these are accunts which allw yu t hld eligible savings investments and assets where the related incme and capital gains are earned n a tax-free basis, in accrdance with the regulatins and restrictins n their peratin, as prescribed in the Canadian Incme Tax Act. All accunts may be denminated in Canadian r US currency. Please cnsult yur Investment Advisr abut hw each f these accunts perate and which ne(s) best meet yur investment bjectives. Lightyear Capital Inc. Relatinship Disclsure (Advisry Accunts) July, 2014 Page 2 f 11

3 - 3 - The fees and charges related t the varius accunt types are addressed in the Fees and charges sectin f this Relatinship Disclsure Dcument. 3. The type f prducts we ffer. We ffer the fllwing investment prducts: Cash and cash-type instruments; Equity investments, including stcks, warrants, flw-thrugh shares and trust units; Fixed incme and debt securities; Investment funds, such as mutual funds and exchange-traded funds; and Mney market and high-yield savings investments. Yur investment advisr can explain these investment prducts t yu, as well as hw they wrk, their risks and ptential returns, and whether they are apprpriate fr yu. Fr mre infrmatin, yu can als read the plainlanguage investment explanatins in Investments at a Glance, a bklet prepared by the Canadian Securities Administratrs fr financial cnsumers like yu, which can be fund n their website at 4. Our relatinship and respnsibilities Clearly understanding ur respective respnsibilities is vital t the success f ur relatinship. In this sectin, we will dcument thse respnsibilities, help yu understand what KYC infrmatin is and why we require it, and prvide yu with sme guidelines n hw t establish and define yur verall bjectives. Respnsibilities Yur Investment Advisr s respnsibilities: Yur Investment Advisr is respnsible fr the advice prvided t yu and fr ensuring that it is unbiased, meets an apprpriate standard f care, and is suitable based n yur investment needs and bjectives. The Firm s respnsibilities: Lightyear is respnsible fr, amng ther things, prviding yu with this Relatinship Disclsure Dcument and related infrmatin, assessing the suitability f the investments in yur accunt(s), reprting yur accunt activity t yu thrugh trade cnfirmatins and accunt statements and varius ther disclsures and requirements, many f which are referred t elsewhere in this dcument. We are respnsible fr prviding yu with infrmatin abut the investments that yu make, including prspectuses, ffering dcuments and ther prduct infrmatin, where applicable. Lightyear is respnsible fr the supervisin f its Investment Advisrs and fr handling any cmplaints regarding its services in a fair and reasnable manner. Yur respnsibilities: Yu are ultimately respnsible fr making all investment decisins in respect f yur accunt(s). As such, yu are required t be an active participant in the relatinship by keeping infrmed and keeping us infrmed. In rder t achieve this, yu are respnsible fr: Prviding us with full and accurate KYC infrmatin including yur financial situatin, investment bjectives and risk tlerance, time hrizn and any ther infrmatin relevant t assisting yu in meeting yur investment gals. Prmptly infrming yur Investment Advisr f any material changes in life circumstances which may result in changes t the KYC infrmatin previusly prvided. This may include such things as a change f address, significant changes in financial situatin, emplyment changes, marital status, retirement plans, etc. Carefully and prmptly reviewing cpies f all KYC infrmatin we will prvide yu at the time f accunt pening and any time that infrmatin is updated, t ensure that we have recrded an accurate understanding f yur circumstances. Ensuring that yu understand the infrmatin cntained in this Relatinship Disclsure Dcument and asking questins f yur Investment Advisr where yu require further clarificatin. Lightyear Capital Inc. Relatinship Disclsure (Advisry Accunts) July, 2014 Page 3 f 11

4 - 4 - Carefully and prmptly reviewing all dcumentatin prvided t yu including trade cnfirmatins and accunt statements. Yu must reprt any errrs r inaccuracies within the time limits prescribed n the dcuments. Being infrmed by reviewing yur prtfli regularly, understanding the ptential risks and returns related t the investments in yur accunt(s), reviewing all sales literature and prduct related infrmatin prvided, being practive by asking questins abut specific transactins, investments and the relatinship in general whenever such questins may arise, and by cnsulting the apprpriate prfessinals as necessary, including accuntants r lawyers fr tax and/r legal advice. Ensuring that payment fr transactins is made by the settlement date. Cntacting the Firm if yu are dissatisfied with the handling f the affairs in yur accunt(s). Knw Yur Client -What is it and why d we need it? In an advisry accunt, while yu are ultimately respnsible fr yur investment decisins, yu may rely n the advice prvided by yur Investment Advisr. Yur Investment Advisr is required t ensure that the advice prvided and investments made in yur accunt(s) are suitable fr yu. In rder t assess suitability, we cnsider factrs such as yur investment bjectives and time hrizn, risk tlerances and yur persnal and financial circumstances, including yur age, annual incme, net wrth and investment knwledge. This Knw Yur Client infrmatin is what we refer t as KYC, and is cllected when yu cmplete yur New Client Applicatin Frm ( NCAF ). We must match yur needs and desires with yur investments and trading activities. Withut this understanding, it is nt pssible t make suitable recmmendatins. We knw that yu may be cncerned abut sharing sme f this infrmatin. Hwever, withut all the necessary infrmatin t knw yur fundamental circumstances, securities legislatin prhibits us frm prceeding with pening yur accunt. Please als refer t ur Privacy Plicy, included n ur website at regarding ur cmmitment t the cnfidentiality and privacy f yur infrmatin. Again, as described abve, yu are als respnsible fr ensuring the KYC infrmatin is up-t-date and infrming us f changes in yur life circumstances which may result in changes t the KYC infrmatin that we have in ur recrds. Further infrmatin n the varius KYC factrs is prvided belw: Persnal situatin: The persnal infrmatin we gather nt nly ensures that we are in cmpliance with anti-mney laundering/anti-terrrist financing regulatins mandating verificatin f identificatin but is als imprtant in ur understanding f yur persnal circumstances and hw they may affect the recmmendatins we make t yu. This includes basic name, residence address and ther cntact infrmatin, date f birth, scial insurance number, marital status, emplyment infrmatin, etc. Financial situatin: We need t understand yur net wrth, which includes yur financial assets (depsits, investments) and capital assets, net f yur liabilities (debts, mrtgage). We need t understand the surces f yur incme and the amunt f yur incme frm all surces. We will cnsider the size f any transactin relative t yur net wrth as part f ur suitability assessments. Investment knwledge: This reflects yur level f understanding f investing, investment prducts and their assciated risks. We will dcument yur level f investment knwledge as being sphisticated, gd, limited, r pr/nil. Further infrmatin n determining yur level f investment knwledge is prvided belw. Investment bjectives: Yur investment bjectives are yur specific financial gals. This infrmatin will help us determine hw t balance the desire t keep yur mney safe (nt lse principal), earn incme, and increase yur capital thrugh grwth in the market value f yur hldings/accunt(s). The investment that we recmmend shuld be cnsistent with yur investment bjectives. Further infrmatin n the types f bjectives yu may have is in the fllwing sectin. Lightyear Capital Inc. Relatinship Disclsure (Advisry Accunts) July, 2014 Page 4 f 11

5 - 5 - Time hrizn: This is the perid frm the time yu prvide us with this infrmatin t the time when yu expect t need yur financial assets, r a significant prtin theref, fr such things as purchasing a hme, paying fr yur educatin r yur children s educatin r retiring. In retirement, this may als include cnsideratin f tax requirements t withdraw minimum amunts. Risk tlerance: The level f risk tlerance is intended t dcument yur willingness t accept risk and yur ability t withstand declines in the value f yur prtfli, whether frm the perspective f cmfrt level r actual financial ability. Yur risk tlerance shuld reflect the relative weighting f the varius levels f risk f the investments that yu wish t hld in yur accunt(s). Further infrmatin n hw t define the varius levels f risk is in the fllwing sectin. When yu are cnsidering these KYC factrs and yur wn persnal circumstances, yu must d s n an accuntby-accunt basis, rather than fr all f yur accunts r fr yu as an investr verall, as each accunt r type f accunt may have different investment bjectives, risk tlerance levels, etc. Fr example, yu may wish t keep yur retirement savings in lwer risk investments with lnger term return bjectives, but hld mre speculative investments in a cash accunt. Clearly the risks and bjectives are different in thse tw cases. Fr this reasn, we will review suitability n an accunt-by-accunt basis. Guidance fr cnsidering investment knwledge T assist yu in describing yur level f investment knwledge, the fllwing guidelines are set ut. It is expected that ver a perid f time, with increasing expsure t varius investment prducts, yur level f experience culd increase. Sphisticated experience wuld include thse individuals wh have traded in mst types f investment securities. This wuld include knwledge f ptins, cmmdities, speculative and shrt selling strategies and an appreciatin f the risks and rewards invlved in trading these securities. Gd experience wuld include thse individuals wh have either traded in r have sme knwledge f the basic characteristics f bth fixed incme securities and cmmn shares, as well as basic understanding f the degree f risk and reward inherent in these types f securities. Limited experience wuld include thse individuals wh have had sme investment experience but may nt have a full understanding f the basic characteristics f the varius types f securities and the degree f risk assciated with sme securities. Pr/Nil experience wuld include thse individuals wh have very limited r n knwledge f the basic attributes f securities r the wrkings f the markets. Guidance fr cnsidering investment bjectives The investments in yur accunt(s) shuld be cnsistent with yur investment bjectives. Yur bjectives are classified and dcumented as being incme related, lng-term capital appreciatin, r shrt-term capital appreciatin/ speculative trading, and may be any cmbinatin f these. These categries are general guidelines nly, intended t assist us in meeting yur verall investment bjectives. It is recgnized that yur bjectives may change frm time t time, and what yu prvide at the time f accunt pening represent yur basic bjectives at that time. In the event that changes t yur persnal circumstances result in changes t yur verall investment bjectives, yu are respnsible fr discussing and updating that infrmatin with yur Investment Advisr. T assist yu in determining yur bjectives, we ffer the fllwing guidelines as t the nature f the investments and activities intended by each f the fur categries. Please remember that the list f securities in each categry is nt intended t be exhaustive and yur wn situatin may require further clarificatin. It is als imprtant t recgnize that the selectin f investment bjectives may nt be synnymus with the selectin f accunt risk factrs as described in the sectin belw. Incme: This categry includes securities whse primary characteristics are regular incme with little ptential fr capital gain. Fr example, this categry wuld usually include mney market securities, investment grade bnds and high quality preferred shares, but culd als include high-yield bnds, Lightyear Capital Inc. Relatinship Disclsure (Advisry Accunts) July, 2014 Page 5 f 11

6 - 6 - ryalty trust units and lwer quality preferred shares, where there is a greater risk f cessatin f incme flw and capital lss, depending n the accunt risk factrs. High yielding, stable, dividend-paying cmmn shares culd, but wuld nt nrmally, be included in this categry. Lng-term capital appreciatin: This categry includes securities, such as cmmn shares, whse primary characteristics are t prvide the investr with the ptential fr lng-term capital gain, while assuming sme risk f capital lss. This categry wuld nrmally include the cmmn shares f established cmpanies which have experienced sme reasnable perid f perating histry, including a recrd f past prfitability. Shrt-term capital appreciatin: This categry includes the cmmn shares r ther equity related securities f mre junir cmpanies r securities which are generally f higher risk than thse securities which wuld be captured under the lng-term grwth categry. Trading activity in warrants r stck ptins wuld be included in this categry. This categry wuld als encmpass securities nrmally included under the incme r lng-term capital appreciatin categries if: The investment hrizn was mre shrt-term riented and the intended trading activity was, therefre, f mre frequent nature, r A significant percentage f margin was regularly utilized in the accunt. Speculative trading: This categry includes high-risk venture type f investments that are generally less liquid. Often, these may be investments thrugh private placements r sme ther frm f investment in start-up r emerging entities. Guidance fr cnsidering risk tlerance Investing in securities is inherently risky, as the value f individual securities is nt guaranteed and can fluctuate significantly. The risks yur investments may face include, amng ther things, issuer specific risks (type f prduct, business, sectr r industry risk), general market risk, macrecnmic cnditins, interest and exchange rate risk and liquidity. Yu culd lse a prtin f, r even all f, yur riginal investment. The investments in yur accunt(s) shuld be cnsistent with the level f risk yu are willing t accept in yur accunt(s). Yur risk tlerance may be affected by such factrs as yur age, yur family situatin (marital status, dependents), yur net wrth and yur incme expectatins. Yu shuld apprximate yur risk tlerance n a percentage basis between high, medium and lw risk. There will likely be sme crrelatin between yur risk tlerance and yur investment bjectives. Fr example, there shuld be a high crrelatin between the degree f high-risk tlerance, and the prtin f the bjectives that represent shrt-term capital appreciatin and/r speculative trading. An accunt in the 100% lw-risk categry wuld be very limited in the investment pprtunities available t it, whereas ne that has sme allcatin t the medium-risk r high-risk categries wuld have a much greater degree f flexibility in chsing investments. Lw risk investments experience lw vlatility, and generally ffer lwer returns in exchange fr greater prtectin f capital. This categry wuld include investments such as gvernment issued securities and mney market mutual funds. Medium risk investments experience a medium level f vlatility, and are mre likely t ffer mderate grwth ver a lnger perid f time. These investments can certainly fluctuate in value, but are generally higher quality. This categry wuld include mst publicly-traded securities, particularly thse upn which the Firm wuld be willing t extend margin. High risk investments can exhibit significant vlatility, and are best suited t investrs wh are willing t accept the risk f shrt-term fluctuatins in exchange fr the ptential fr higher lng-term returns. Accepting this level f risk is accepting the risk that the entire investment culd be lst. This categry wuld include vlatile, start-up r lwer value publicly traded securities, speculative investments and emerging cmpany type investments with lw liquidity. These are securities upn which the Firm is nt willing r able t extend margin. 5. Hw we assess suitability. Befre we will prvide yu with an investment recmmendatin we will first determine if ur recmmendatin is suitable fr yu accrding t ur understanding f the KYC infrmatin yu have given us when yu cmpleted r Lightyear Capital Inc. Relatinship Disclsure (Advisry Accunts) July, 2014 Page 6 f 11

7 - 7 - last updated yur accunt dcumentatin. That is why keeping yur KYC Infrmatin up-t-date and accurate is very imprtant. Withut current and accurate KYC Infrmatin we cannt give yu suitable recmmendatins r reliable investment advice. Yur Investment Advisr will cnduct a suitability assessment, n an accunt-by-accunt basis, as fllws: Each time a recmmendatin is made t yu; Each time a trade is accepted frm yu (including thse prpsed by yu); When securities are depsited r transferred int yur accunt(s); When the Investment Advisr respnsible fr the accunt changes; and/r When there has been a material change in yur persnal r financial circumstances r bjectives. T ensure that the psitins held in yur accunt(s) remain suitable fr yu as time passes, ur gal is t review the suitability f the investments in yur accunt(s), and yur hldings as a whle, at least every ther year in cnjunctin with an update f yur KYC infrmatin. Given the lng-term nature f investing fr mst clients, we d nt autmatically review the suitability f the investments in yur accunt(s) when there are market fluctuatins, even large fluctuatins. Yur Investment Advisr is ready t discuss the effect f market fluctuatins n yur prtfli with yu when yu request. A suitability assessment invlves a cmparisn f the verall cmpsitin f yur accunt(s) at a pint in time t the weighting f the varius levels f risk and investment bjectives as set ut in yur KYC infrmatin. When cnsidering the suitability f a transactin, we cnsider hw that transactin affects thse weightings in yur accunt(s). During an assessment, if an investment is cnsidered t be unsuitable, yur Investment Advisr will discuss the situatin with yu and may advise against the purchase, r suggest that yu sell any unsuitable investments already in yur accunt. Yur Investment Advisr may als recmmend that yu make changes t the ther investments in yur accunt t ensure the verall suitability f yur hldings relative t yur stated investment bjectives and risk tlerance. If during ur suitability determinatin we identify any cncerns, we will discuss them with yu and dcument ur discussins. If we are strngly cncerned abut any transactin yu request f us which differs frm what we determine t be a suitable transactin, we may chse t refuse t execute a transactin r even terminate ur accunt relatinship. 6. Hw we address cnflicts f interest. In the curse f ur usual activities, we assume a respnsibility t act fairly, hnestly and in gd faith with ur clients. Given the nature f ur business, cnflicts f interests may arise between yu and ur firm, its emplyees r ur ther clients. We have plicies and prcedures in place t address the handling f cnflicts f interests. Under these plicies and prcedures we avid material cnflicts prhibited by law as well as cnflicts that we cannt effectively cntrl. In all ther situatins where ur interests may cmpete with yurs, yur interest is always given pririty by ur acting in ne f tw ways: We cntrl r manage acceptable cnflicts by taking such actins r instituting prcedures that will adequately cntrl r manage the cnflict f interest. We disclse infrmatin abut any remaining cnflicts in rder that yu can assess independently the materiality f the disclsed cnflict(s) when yu evaluate ur recmmendatins and actins. Lightyear Capital Inc. Relatinship Disclsure (Advisry Accunts) July, 2014 Page 7 f 11

8 - 8 - A mre detailed explanatin f ur Cnflicts f Interest Statement may be fund in the Client Agreement and Ntices menu n the hme page f ur website at 7. Hw we respnd t cmplaints The fair and timely handling f client cmplaints is vital t the verall integrity f the investment industry. Lightyear regards the handling f any client cmplaint as an essential element f servicing ur client accunts and we have established written plicies and prcedures t ensure they are dealt with prmptly and fairly. A mre detailed explanatin f ur Client Cmplaint Prcess may be fund in the Client Agreement and Ntices menu n the hme page f ur website at 8. Accunt reprting we will prvide Lightyear will prvide yu with reprting t help yu mnitr yur financial assets and perfrmance. This reprting will cme in the frm f trade cnfirmatins and accunt statements. While we d ur utmst t avid errrs, misunderstandings and mistakes can happen. Accrdingly, it is imprtant that yu review each trade cnfirmatin and accunt statement prmptly upn receipt and advise Lightyear within the time limits disclsed n the dcuments if yu believe there has been an errr. Cnfirmatin f transactins: We will prvide yu with written cnfirmatin f the details f every purchase and sale made fr yur accunt(s) and frward t yu by mail. Accunt statements: Fr yur accunt(s), a statement will be prvided fr each mnth there is any accunt activity and in any event, n a quarterly basis, as lng as there are cash and/r securities in the accunt. Yur accunt statement cnfirms all accunt activity, including purchases and sales f securities, cntributins and withdrawals, dividends, interest earned and paid, transfers, and any ther transactins that have ccurred in yur accunt(s) ver the previus perid. Accunt statements als list yur current hldings and the value f yur prtfli. The value f mst securities yu hld is calculated with reference t the clsing price f the last day f the mnth in the reprting perid f the statement. In the case f securities that have ceased trading, where the cmpany is bankrupt, r in ther circumstances where a reliable market value cannt be ascertained, n valuatin is given. Perfrmance and ther reprting: Lightyear des nt currently prvide any frmal perfrmance reprting, percentage return infrmatin r separate fees and charges reprting. We intend t clsely mnitr the develpment f new rules and requirements in this area and will be prepared t cmply with thse at such time as they cme int effect. T remain up t date n any changes we make in ur reprting t yu, please watch yur statements fr updates, ask yur Investment Advisr r review the updated versin f this Relatinship Disclsure Dcument as psted n ur website at Tax reprting: We will prvide yu with any required tax reprting, based n the type f accunt(s) and/r transactins within yur accunt(s) each year. The mst cmmn f these are as fllws: RRSP cntributins; T4RSP-Statement f RRSP Incme and/r T4RIF-Statement f Incme frm a RRIF; T5-Statement f Investment Incme; T3-Statement f Trust Incme Allcatins and Designatins; T5013/T5013A-Statement f Partnership Incme; and/r Summary f Investment Incme. A Summary f securities transactins is available upn request. Lightyear Capital Inc. Relatinship Disclsure (Advisry Accunts) July, 2014 Page 8 f 11

9 - 9 - There may be additinal tax reprting as circumstances warrant. If yu have any questins abut tax reprting yu receive frm Lightyear, yu shuld cntact yur Investment Advisr. 9. Fees and charges Yu may incur varius fees and charges in relatin t the peratin f yur accunt(s) at Lightyear. Mst f these will be charged directly by Lightyear, hwever, sme f them may be charged elsewhere and by ther parties. The different types f fees and charges are described belw. Cmmissins: Lightyear will charge yu cmmissins n all securities transactins in yur accunt(s). These cmmissins represent the cmpensatin yu pay Lightyear fr the services we prvide yu in the executin and cmpletin f yur trades. Fr equity securities, these cmmissins are either added t yur ttal purchase price r deducted frm yur sales prceeds, and are disclsed t yu n yur trade cnfirmatin. The amunt f cmmissin that yu pay will vary depending n, amng ther things, the security being traded, where it trades and the value f the trade. The amunt f cmmissin is negtiated between yu and yur Investment Advisr at the time yu place yur rder, subject t sme general guidelines t which he r she must adhere. Cmmissins are mst cmmnly based n a percentage f the trade value. Fr debt and ther fixed incme securities, the cmmissin is generally built int the price yu pay r receive fr the security in yur transactin. Our CB retains a prtin f the price yu pay r receive, and this is the cmmissin r spread that is earned n these transactins. Lightyear des nt share in the spread earned by the CB n debt r fixed incme securities. Mutual funds: In the case f mutual funds, the related fees are generally charged t yu thrugh the mutual fund manager r prduct manufacturer. Mutual fund managers typically charge a percentage fee called a management expense rati ( MER ), as well as ther transactin csts, by deducting these charges frm the value f the fund. Frm the MER, the Firm is paid nging cmmissins, cmmnly referred t as trailer fees, fr the services we prvide. Prduct manufacturers may als charge yu a cmmissin at the time f purchase, which is deducted frm the amunt delivered fr investment in the fund. Prduct manufacturers may als charge yu a deferred sales charge ( DSC ) in the event that yu redeem yur fund investment prir t the expiry f a set schedule. As all f these amunt (MERs, trailer fees, cmmissins and DSC s) can vary frm fund t fund, we encurage yu t review the infrmatin yu are prvided regarding the fund in which yu are investing (such as the prspectus ffering dcument r fund fact sheet) and discuss any questins yu may have with yur Investment Advisr. Interest and freign exchange: T the extent that yu maintain a debit balance in yur accunt, yu will be charged debit interest. The CB may charge a higher rate t yu than it pays t brrw funds itself, thus earning the spread between the tw rates. T the extent that yu maintain a credit balance in yur accunt, yu will be paid credit interest. The CB may credit yur accunt at a lwer rate that it earns n its wn cash balances, thus earning the spread n the tw rates. Lightyear and the CB share the spread equally. The current interest rates are as fllws: Canadian dllar debit balances: yu pay the Canadian prime rate plus 3.0% US dllar debit balances: yu pay the US prime rate plus 3.25% Canadian dllar credit balances: yu earn the Canadian prime rate less 3.0% US dllar credit balances: yu earn the US prime rate less 3.25% When we are required t buy r sell US dllars n yur behalf, the CB earns a cmmissin as well. This cmmissin is built int the exchange rate that yu are quted. The CB retains a prtin f the rate yu pay r receive fr yur US dllars, thus earning the exchange rate spread n these transactins. Lightyear des nt share the freign exchange spread with the CB. Accunt peratin fees and charges: Yu may als be subject t varius ther fees and charges in cnnectin with the peratin and maintenance f yur accunt(s). These may include, amng ther things: Lightyear Capital Inc. Relatinship Disclsure (Advisry Accunts) July, 2014 Page 9 f 11

10 accunt transfer; deregistratin and withdrawal fees; physical certificates and re-registratin fees; wire transfer; fees related t private cmpany and ther restricted securities; administratin fees and mre. Other charges: There may be ther csts yu incur that are nt part f ur service fferings, but which are levied by third parties and are required t ensure prper peratin f yur accunt(s) with us. Fr example, yu may be required t pay fr valuatins and legal pinins as t the eligibility f certain private investments that yu wish t hld in a registered accunt. Knwing abut and planning fr these csts is yur respnsibility. Generally speaking, yur Investment Advisr will make every effrt t advise yu f all pssible fees and charges relating t a specific transactin in advance f accepting instructins frm yu. Hwever, it is yur respnsibility t be familiar with ur Administratin Fee Schedule lcated in the Client Agreement and Ntices menu n the hme page f ur website at We will prvide yu with a minimum f 60 days written ntice f any changes t the Administrative Fee Schedule, generally cmmunicated t yu as a statement message directing yu t the mst current versin f the Relatinship Disclsure Dcument, as psted n ur website. 10. Other imprtant infrmatin. Leverage Risk Disclsure Statement The regulatry authrities require member firms t prvide their clients with a Leverage Risk Disclsure Statement. This disclsure statement is intended t remind clients f the inherent greater risks invlved in brrwing mney t purchase securities, and is as fllws: Using brrwed mney t finance the purchase f securities invlves greater risk than using cash resurces nly. If yu brrw mney t purchase securities, yur respnsibility t repay the lan and pay interest as required by its terms remains the same even if the value f the securities purchased declines. Perfrmance Benchmarks and Hw t Use Them Yu may assess the perfrmance f yur investments by cmparing them t an investment perfrmance benchmark. Benchmarks shw the perfrmance ver tie f a select grup f securities. There are many different benchmarks. When chsing a benchmark, pick ne that reflects yur investments. Fr example, the S&P/TSX Cmpsite Index fllws the share prices f the largest cmpanies listed n the Trnt Stck Exchange. This index wuld be a gd benchmark fr assessing perfrmance f a Canadian equity fund that invests nly in large Canadian cmpanies. It wuld be a pr benchmark if yur investments are diversified in ther prducts, sectrs r gegraphic areas. We d nt prvide benchmark cmparisns in ur mnthly accunt reprting, hwever cmparisns t the majr Nrth American cmpsite indices are available upn request and may be peridically prvided t yu by yur Investment Advisr. Please speak t yur Investment Advisr if yu have any questins abut the perfrmance f yur prtfli. Canadian Investr Prtectin Fund ( CIPF ) The CIPF was created by the investment industry t ensure that client assets are prtected, within defined limits, in the event f the inslvency f an investment dealer, wh is a member f CIPF. All IIROC dealer members are required t be members f CIPF, and are subject t assessments fr required cntributins t CIPF. The cverage limit is $1,000,000 fr any cmbinatin f cash and securities within each separate accunt. Many investrs will have tw separate accunts, a general accunt and a retirement accunt, that are each eligible fr the $1,000,000 f cverage. If an investr has several general accunts (cash, margin, US $ accunt, etc.) r several retirement accunts (RRSP, RRIF, etc.), these will be cmbined, respectively, int tw separate accunts fr purpses f CIPF cverage. The cverage amunt applies t any shrtfall in yur accunt which may exist fllwing the dealer inslvency, which, in mst cases will be substantially less than the value f yur accunt(s). It is imprtant t nte that CIPF des NOT cver lsses arising frm market fluctuatins. Lightyear Capital Inc. Relatinship Disclsure (Advisry Accunts) July, 2014 Page 10 f 11

11 Fr mre infrmatin n CIPF cverage, please visit their website at r cntact yur Investment Advisr fr an infrmatinal brchure. Warning re: Electrnically Delivered Orders Althugh Lightyear des nt specifically reject rders t buy r sell securities received frm its clients via r vic , it is imprtant t be aware that such delivery f an rder is at risk f nt being received, and accrdingly executed, in a timely fashin. Please cnsider systems prblems, equipment malfunctins, internal mail systems, and ther related issues which may delay receipt f such an rder by the apprpriate individual within a reasnable time frame. Accrdingly, we recmmend that in these cases, yu make a fllw up phne call t ensure the rder was, in fact, received. We prvide this general warning s that yu are aware f the ptential risks. 11. A checklist f dcuments t be prvided t yu. In cnnectin with yur new (updated) accunt(s) the fllwing dcuments are available t yu n request and sme are available n the hme page f ur website at Fr All Accunts Client Agreement Relatinship Disclsure Dcument Cnflict f Interest Statement Administratin Fee Schedule Multiple Marketplaces Trading Plicy Keeping Yu Infrmed (Regulatry Disclsure) Privacy and Prtectin f Persnal Infrmatin Plicy Cmmunicatin with Beneficial Owners f Securities Multiple Marketplaces Trading Plicy Institutinal Trading Matching Statement Business Cntinuity Plan Handling Cmplaints Client Cmplaint Prcess IIROC Guide - An Investr's Guide t Making a Cmplaint Ombudsman fr Banking Services and Investments - Investr Brchure After yur NCAF has been frmally apprved and prcessed, a cpy f yur cmpleted NCAF alng with a Welcme Letter will be mailed t yu. 1 Please carefully review the cmpleted NCAF t ensure that the KYC Infrmatin accurately reflects yur investment bjectives and risk tlerance. Thank yu fr chsing Lightyear Capital Inc. 1 If yu have pened a Tax Free Savings Accunt, Registered Educatin Savings Plan Accunt r Self-Directed Disability Savings Plan, cpies f the applicatin and Declaratin f Trust will be included in the Welcme Letter Lightyear Capital Inc. Relatinship Disclsure (Advisry Accunts) July, 2014 Page 11 f 11