Conflicts of Interest Statement
INTRODUCTION AND SCOPE
Applicable securities laws require us to provide you with the following document regarding conflicts of interest:
The rules of the Canadian Securities Regulators require us to take reasonable steps to identify and respond to material conflicts of interest in your best interest and to tell you about them, including how the conflicts might impact you and how we address them in your best interest. We must always seek to act fairly, honestly, and in good faith with you. When we act as your portfolio manager, investment fund manager or exempt market dealer, we have to act in your best interest and not put our interests ahead of yours.
Groundlayer Capital Inc. is a registered portfolio manager and exempt market dealer in Ontario and Alberta, and an investment fund manager in Ontario. We provide financial products and services to Ontario and Alberta investors. This document contains Groundlayer Capital Inc.’s (we, us or our) Conflicts of Interest Statement. The words you, your and yours mean the client and any other individuals with authority over the client’s account.
It is important for you to be informed about how we identify and respond to material conflicts of interest in order to minimize their impact on you. We consider a conflict of interest to be any situation where the interests of a client and those of Groundlayer Capital are inconsistent. Conflicts of interest may arise in a variety of circumstances, including where we may be influenced to put our interests ahead of your interests. Such conflicts exist in almost all human interactions and will arise from time to time:
- Between you and our firm,
- Between you and other clients
When determining whether a conflict of interest is material, we consider whether the conflict may be reasonably expected to affect either or both of the following:
Groundlayer and its representatives may have conflicts of interest in providing you with services. We discuss these more fully below. These conflicts may be actual conflicts of interest or you may perceive that we have a conflict of interest. There may also be conflicts which we determine are reasonably foreseeable based on the circumstances. We require our representatives to tell us about any conflict of interest or reasonably foreseeable conflict of interest, between themselves and clients and then to use their best efforts to avoid or mitigate any conflict of interest in rendering advice regarding investment opportunities. Our company must put our clients’ interest ahead of our own.
We have adopted policies and procedures to assist us in identifying and controlling any conflicts of interest that we may face. We avoid conflicts prohibited by law, as well as conflicts that we cannot effectively control to ensure that we resolve them in our client’s best interests.
Following is a discussion of the conflicts of interest that may arise.
Related and Connected Issuers
Groundlayer Capital Inc. manages three funds which are issued by a related or connected party. We manage these conflicts of interest by following a Fair Allocation Policy to ensure investment opportunities are shared fairly by all clients. We prohibit trading between the Funds. We disclose these related and connected issuers in our documentation and in our financial statements.
Groundlayer Capital Inc. only offers for sale proprietary products. We provide you with disclosure regarding these products, our relationship to them, and the costs associated with them. We do not consider the larger market of non-proprietary products to determine whether such products would be better, worse or equal in meeting your investment needs and objectives.
Groundlayer Capital Inc. does not enter into referral arrangements for which any charges or fees are paid or received.
Sales Practices, Internal Compensation and Incentive Practices
Groundlayer Capital Inc.’s compensation is comprised of fees fully disclosed in our offering material. Internal compensation of sales personnel is presently comprised largely of base salary. Our compensation program for sales personnel is subject to review and audit by individuals whose compensation is not tied to the results or outcomes of the review.
Trade Execution and Fair Allocation
Groundlayer executes trades with third party brokers. We direct our trades in accordance with our objective to achieve best execution. We do not have any arrangements that provide us with rebates or benefits for trade execution.
Trades are allocated in accordance with our Fairness Policy which is based on a pro-rata principal.
Outside Business Activities
Groundlayer Capital maintains a policy regarding outside business activities (OBA’s) that requires employees to report all OBA activities to the firm for prior approval to ensure no conflict of interest or the appearance of one. These activities may or may not be for additional compensation. Groundlayer Capital reserves the right to deny outside business activities should they present a material conflict of interest or impede the performance of an employee’s duty to Groundlayer and our clients.
Management level conflicts
Our Ultimate Designated Person (UDP) has oversight of revenue generation activities in addition to being the person ultimately responsible for compliance. This potential conflict is managed by the firm employing a Chief Compliance Officer who is responsible for implementing and enforcing policies and procedures that require client suitability assessments, and review of trading activity in respect of fund objectives and investment strategies parameters. Investment by principals alongside clients enhances our alignment of interests with those of our clients.
Our employees are subject to a personal trading policy designed to ensure that our employees act in accordance with applicable laws and to prevent them from engaging in personal securities transactions that are prohibited, such as insider trading. This requires them to seek approval prior to making trades in their personal securities accounts, and to provide review of those trades. We use a ‘restricted’ list to ensure no personal trades are entered in advance of client transactions.
Gifts and Entertainment
We may receive offers of gifts and/or entertainment from business partners. We could be perceived to be financially motivated to put our interests ahead of your interests because of the gifts and entertainment. To address this conflict of interest, we have a code which requires employees not to accept any gift or entertainment which is intended to improperly influence a business decision.
We avoid these conflicts by not permitting employees to lend money or other assets to clients, nor to borrow money or other assets from clients.
The products in which you invest through us charge fees. The fees that we charge you in connection with your account are set out in your offering documents. They consist of a management fee, and if applicable, an incentive fee. We do not earn fees from third parties on your account. We do not charge redemption fees.
Groundlayer Capital is a member of Ombudsman for Banking Services and Investments (OBSI). Our client complaints procedure is described in our account opening documents.