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conflict of interest disclosure

Pursuant to new securities regulations referred to as Client Focused Reforms, this Conflict of Interest Disclosure Document aims to provide enhanced disclosure of existing and reasonably foreseeable material conflicts of interest that may affect the interests of clients of Lincluden Investment Management Limited (“Lincluden”, ”we”, “us” or “our”). Lincluden is required to identify material conflicts of interest which would be expected to arise between clients and Lincluden (including each individual, acting on its behalf) in our capacity as a portfolio manager, investment fund manager and as an exempt market dealer. interest may arise when the interests of clients differ from those of Lincluden, or where Lincluden is perceived to put its interests ahead of its clients. A conflict is considered material if it may be reasonably expected to affect decisions of the client in the circumstances, or recommendations or decisions of Lincluden in the circumstances. In all cases where conflicts of interest are identified, they are reported to the Chief Compliance Officer and addressed through our Policies and Procedures. This disclosure document outlines the steps that Lincluden takes to address potential conflicts in the best interest of clients. When addressing material conflicts of interest Lincluden will put the interest of clients first, ahead of our own interests and any other competing considerations. Where conflicts of interest cannot be addressed in the best interest of clients, Lincluden will avoid the conflict.

This Conflict of Interest Disclosure Document replaces the disclosure that was previously provided in our Relationship Disclosure Document and will be provided to you at the time you open your account(s) with Lincluden. If additional material conflicts of interest are identified subsequently, we will provide you with an updated version on a timely basis. If you have any questions related to the contents of this Conflict of Interest Disclosure Document, please contact your relationship manager. You may also email us at or reach us toll-free at 1-844-373-4240.

The following are some of the material conflicts of interest that may affect the service we provide to you:

Referral Arrangements with Third Parties

Lincluden has referral arrangements with certain parties, pursuant to which that party may market, promote and introduce certain clients to Lincluden. Under these referral arrangements, the other party generally receives a referral fee from Lincluden for its referral services.

Lincluden manages this conflict of interest in the following manner:

  • In keeping with Canadian regulations, Lincluden will disclose the nature of such referral arrangements, including the fees Lincluden pays such parties
  • Clients will receive a copy of such disclosure prior to entering into an investment management agreement with Lincluden

Investment in Related or Connected Issuers

A related issuer means a person or a company that influences or is influenced by, through ownership, or direction and control over voting securities, another person or company. A person or company is connected to another person or company if, due to its relationship with such person, a prospective purchaser of securities of the person or company might question the other person or company’s independence from the first person or company. Lincluden is a private company held by the firm’s key employees and strategic partner Morguard. Through this relationship, the following issuers may be considered related issuers of Morguard, and potentially related issuers of Lincluden:

  • Morguard Corporation (MRC)
  • Morguard ReaMorguard Real Estate Investment Trust (MRT-U)
  • Morguard North American Residential Real Estate Investment Trust (MRG-U)
  • TWC Enterprises Limited (TWC)

Lincluden manages conflicts of interest in this area in the following manner:

  • Disclosure of this relationship is provided to clients at account opening
  • Lincluden is an independently operated entity with corporate decisions being made by the firm and its principals. As such we do not consider these entities to have meaningful influence over Lincluden

Investments in Certain Other Issuers

Partners, directors, officers, employees or agents of Lincluden could potentially also be partners, directors or officers of an issuer.

Lincluden manages this conflict of interest in the following manner:

  • Lincluden will not cause an investment portfolio managed by it, to invest in securities of such issuers without the prior written consent of the clients to do so after disclosure of the fact has been made or unless prior regulatory relief was obtained

Principal Transactions and Cross Trading Securities

Under Canadian regulations, Lincluden is subject to certain restrictions from engaging in principal transactions with or on behalf of its clients and from cross-trading securities between client accounts.

Lincluden manages this conflict of interest in the following manner:

  • Without exemptive relief from regulatory authorities, Lincluden will not knowingly cause any client investment portfolio managed by it to purchase or sell securities from or to i) Lincluden, ii) any directors, officers or associates of Lincluden, or (iii) any funds managed by Lincluden

Best Execution and Soft Dollars

In the capacity of providing discretionary investment management services we execute trades for client accounts. Lincluden may receive soft dollars in connection with trades in securities on behalf of clients. Soft dollars create a perceived or potential conflict of interest to the extent that (i) Lincluden may use soft dollars for services that benefit Lincluden and their other clients; and/or (ii) soft dollars generated by one client are used for the benefit of other client accounts.

Lincluden manages these conflicts of interest in the following manner:

  • When placing orders on behalf of a client’s account, Lincluden will select those brokers and dealers from whom they reasonably expect to obtain the best execution (after considering all transaction costs and research or other benefits)
  • Lincluden complies with regulatory rules on acceptable soft dollar practices. The types of goods or services that may be paid by soft dollars include, without limitation, rating agencies, credit research service and research tools designed to aid Lincluden in making an investment or trading decision and order execution services
  • On an annual basis, Lincluden reviews and analyzes the brokerage transactions that involve client brokerage commissions to a dealer to ensure that a good faith determination is made and that the client(s) receive reasonable benefit considering both the use of goods or services and the amount of client brokerage commissions paid

Proprietary Products, Marketing, Promotion and Sale of Securities

As an asset manager, we primarily offer discretionary investment management services to our clients which includes investment capabilities and investment styles across all major traditional and alternative asset classes, including units of the Lincluden Balanced Fund and the Lincluden Pooled Funds (together, the “Funds”). Lincluden’s services as a portfolio manager and exempt market dealer are integrated and generally not separable from each other when we act as a dealer on a trade in securities of our funds. In addition, Lincluden may from time to time solicit orders from its clients and trade securities of funds on behalf of its clients.

Lincluden manages this conflict of interest in the following manner:

  • Where Lincluden acts as a portfolio manager and exempt market dealer, we do not receive any separate compensation for acting as a dealer on the trade. Lincluden’s interest is in the fees paid to it by the client for the investment management services that we provide to the client
  • Where Lincluden solicits orders from clients, Lincluden does not receive any commission or similar selling compensation for acting as a dealer on such trades
  • Lincluden considers the suitability of investment funds for clients solely in the context of the available funds with which it is acquainted

Fair Allocation amongst Clients

In our capacity to act as portfolio manager, we may aggregate orders for a number of client accounts for the purchase of a particular security. At times, Lincluden may make the same investment for one or more of its clients or amongst its clients. This may create a conflict of interest if there is only a limited amount of the investment or if the investment is purchased at different prices.

Lincluden manages this conflict of interest in the following manner:

  • Lincluden has adopted trading policies which are designed to ensure fair allocation of securities amongst client accounts. A copy of our fair allocation policy will be provided upon request

Pricing and Account Errors

Lincluden may have a potential conflict of interest when determining when and how, to deal with a pricing error or other type of unitholder account error, due to the time, processing cost and reimbursement of investors involved.

Lincluden manages this conflict of interest in the following manner:

  • Lincluden uses third party service providers to calculate net asset values of and to record client transactions. Lincluden has a written policy that establishes standards for the correction of discrepancies in the calculation of net asset value in a consistent manner across clients and is in accordance with industry guidelines. Lincluden looks to the service providers to process corrections and monitors the service providers in the performance of their duties

Proxy Voting and Other Corporate Actions

Lincluden is required to vote (or decide to refrain from voting) all shares or other voting securities for its client’s accounts in accordance with its best judgment. In doing so, it will consider each such proposal on its merits in light of the best interests of the client’s accounts.

Lincluden manages these conflicts of interest in the following manner:

  • Where there is a conflict between the best interests of one client’s account, and the best interest of Lincluden with respect to any matter on which Lincluden is to vote the portfolio securities of the client account, Lincluden will put the interest of the client ahead of its own
  • Lincluden has developed Policies and Procedures that govern proxy voting. A copy of Lincluden’s proxy voting policies is available upon request

Personal Trading, Gifts and Business Entertainment

When individual portfolio managers and other personnel of Lincluden invest in the same securities as clients of Lincluden, there is a perceived or potential conflict of interest that the portfolio manager or other personnel may benefit from opportunities at the expense of clients. When employees of Lincluden give or accept gifts or business entertainment of more than minimal value in connection with services provided to clients, there is also a perceived or potential conflict of interest.

Lincluden manages this conflict of interest in the following manner:

  • Lincluden has a Code of Conduct that sets forth standards of business conduct intended to prevent possible conflicts of interest, diversions of corporate opportunity or appearances of impropriety and has established policies and procedures for monitoring personal trades of employees, officers and directors who have access to information regarding the portfolios of clients
  • Lincluden has a Code of Conduct for the provision and acceptance of gifts and business entertainment to or from persons or entities with which Lincluden has an existing or potential business relationship and regularly monitors employees’ adherence to such standards

Outside Business Activities

When employees engage in certain activities, interests or associations outside Lincluden, a conflict of interest may arise between the employee’s personal interests and those of Lincluden and its clients.

Lincluden manages this conflict of interest in the following manner:

  • Lincluden has developed Policies and Procedures that govern employees’ outside business activities and to which all employees must adhere. In few circumstances, an employee of Lincluden may serve on the board of directors or other governing body of a publicly traded company
  • Lincluden has implemented a notification and pre-approval process to restrict any outside business activity that would interfere or give the appearance of interfering with an employee’s ability to act in the best interests of, or perform work