In the course of carrying out its business activities as securities dealer, NBDB may from time to time engage in the following activities in respect of National Bank or other related issuers of NBDB, and in the context of a distribution, in respect of the securities of National Bank and other connected issuers of NBDB:
	Sell such securities to or on behalf of clients of NBDB;
	Purchase such securities from or on behalf of clients of NBDB;
	Offer for sale securities, goods and services which include securities, goods or services issued or provided by National Bank of Canada or another related issuer, or cooperate with National Bank of Canada or another related issuer in the joint offering for the sale or purchase of securities, and goods or services.
It is the policy of NBDB to comply fully with all applicable securities legislation and to make all required disclosures where acting as advisor, dealer or underwriter in respect of the securities of National Bank of Canada and other related or connected issuers of NBDB, particularly in the following situations:
	In the context of the purchase or sale of securities of a related issuer, or in the course of a distribution, in respect of securities of a connected issuer, NBDB will have to inform the client in writing of the relationship or connection between NBDB and the issuer of the securities; and
	Where NBDB purchases securities from or sells securities to a subsidiary or affiliate, the dealing will be done on the basis that the transaction price for a given security together with the brokerage commission applicable to such trade, is as good as or better than that offered by an unaffiliated third party broker in an arms-length transaction.
As part of its business activities as investment dealer, NBDB may also be called upon to act as agent or principal at the time of buying or selling for or on behalf of its clients. In such instances, the services provided by NBDB in the normal course of business will be provided in accordance with its normal practices and procedures as well as the relevant legislation or regulations.

Related Dealers and Advisors

NBDB affiliation with National Bank of Canada and its subsidiaries makes it necessary to put in place certain policies aimed at dealing with any potential conflicts of interest and ensuring that the best interest of NBDB’s clients are preserved.

NBDB is duly registered as an investment dealer which gives no advice nor does it make any recommendations with respect to investments. Furthermore, National Bank of Canada, of which NBDB is indirectly wholly-owned subsidiary, is also the principal shareholder of the following dealers and advisors:

NBC Alternative Investments Inc.
CABN Investments Inc.
NBF Securities (USA) Corp. - in United States only
National Bank Financial Inc.
National Bank Financial Ltd.
Innocap Investment Management Inc.
Natcan Investment Management Inc.
Innocap Global Investment Management Ltd. - in Malta only
National Bank of Canada Financial Inc. - in United States only
NBCN Inc.
NBF International S.A. - in Switzerland only
National Bank Securities Inc.
Natcan Trust Company
National Bank Trust Inc.
Alpha ATS L.P.
PI Financial Corp.
Wellington West Financial Services Inc.
Wellington West Total Wealth Management Inc.
Maple Futures Corp.
Maple Securities Canada Limited
PI Financial (US) Corp. - in United States only

NBDB is therefore related to the above-mentioned dealers and advisors. Although there may be overlaps among the directors and officers of these companies, all of these companies are operated as separate legal entities.

These entities may, from time to time, cooperate in offering products and services for the benefit of our clients. It should be understood that in such cases, there is no exchange of client information among these companies without a client’s express prior written consent or unless the information is reasonably necessary in order to provide a specific product or service.

NBDB may obtain from or provide to the above-mentioned dealers or advisors management, administrative, referral and/or other services in connection with its ongoing business activities or the ongoing business activities of these other companies or transactions completed by it or these other companies. These relationships are subject to certain legislative and industry regulatory requirements which impose restrictions on dealing between related dealers or advisors intended to minimize the potential for conflict of interest resulting from these relationships. NBDB has also adopted internal policies and procedures which supplement these requirements, including its policies on confidentiality of information.


Other Companies Related to National Bank Direct Brokerage¹

Alpha Trading Systems Limited Partnership (hereinafter “Alpha ATS L.P.”) is a marketplace in Canada for the trading of securities.

National Bank Financial Inc. is a limited partner of Alpha ATS L.P., which is a registered dealer with the Investment Industry Regulatory Organization of Canada, and a shareholder of Alpha Trading Systems Inc. (the general partner of Alpha ATS L.P.). The ownership interest of National Bank Financial Inc. and certain other limited partners of Alpha ATS L.P. is subject to a re-determination agreement, which provides that the ownership interest of certain limited partners (including National Bank Financial Inc.) will be adjusted on predetermined dates based on the market share of trades executed by the limited partners on Alpha ATS L.P.

NBDB may execute trades on your behalf on Alpha and may enter orders which are not immediately tradable into Alpha ATS L.P.’s order book. Notwithstanding the ownership interest of National Bank Financial Inc. in Alpha ATS L.P. or any of its rights under the re-determination agreement referred to above, NBDB is subject to a number of regulatory obligations, including the requirement to diligently pursue best price and best execution of each client order on the marketplace, obligations which override any interest of National Bank Financial Inc. in Alpha ATS L.P.


Conflicts of Interest of National Bank Direct Brokerage Employees

In the ordinary course of performing their duties, our officers, employees, representatives and agents could find themselves in situations where their personal interests may be in conflict with those of a client.

NBDB has equipped itself with a Code of Professional Conduct, a Compliance Manual and internal policies dealing with the situations related to its activities. Among other things, they reiterate that NBDB employees must never favour their own interests to the detriment of their responsibilities toward NBDB’s clientele and NBDB itself. Those documents set forth the basic principles by which its employees’ conduct is guided, particularly including the following:

a) Confidential information: It is prohibited to use confidential information acquired in the course of one’s duties, or exploit a situation for the purpose of obtaining an advantage of any kind;

b) Gifts, entertainment and compensation: It is prohibited to accept gifts, entertainment or compensation that could influence decisions to be taken in the course of performing one’s duties. In carrying out their duties, and to avoid any conflicts of interest situations, NBDB employees may not receive any other form of compensation than that paid by NBDB without the prior written approval of NBDB. In addition, NBDB ensures that its practices for compensating its representatives are not inconsistent with their obligations to its clients.

c) Other business activities: It is prohibited for NBDB employees to engage in activities that could interfere with or enter into conflict with their duties. NBDB has a policy respecting its employees’ other business activities. The policy is intended to detect and, where applicable, supervise, disclose or prohibit any conflicts of interest. Furthermore, employees wishing to act as directors of officers of a public or private company must declare their intentions and be duly authorized by NBDB. NBDB will not permit any of its employees to engage in activities outside the scope of their duties, including, but not limited to, serving as a director of a company or other entity, without first ensuring that such activities do not compromise the interests of NBDB’s clients.

d) Client priority rule: The interests of clients must always be given priority over those of NBDB and its employees. For this reason and to avoid conflicts of interest, between two orders for the same security at the same price (or a better price), the order coming from a client is always executed prior to the one from NBDB or one of its employees.

e) Policy respecting errors: A policy has been established to supervise trading errors made by employees. Employees may not correct their own errors and must forward them to their immediate supervisor to be analyzed and handled; and

f) Referrals: On occasion, clients may be referred by third parties to NBDB for the purpose of obtaining the products and services offered by NBDB. When such referrals involve a referral commission, they must comply with the existing regulations and be subject to the required disclosures to clients so referred. Such disclosures allow the clients concerned to make an informed decision with respect to the referral and to assess any potential conflicts of interest.

Other conflicts of interest

From time to time, other potential or actual conflicts of interest may arise. NBDB undertakes to continue taking the necessary steps to identify and respond to such situations fairly and reasonably, in keeping with the standard of care to which it is subject in its relationships with its clients. This Statement of Policies respecting conflicts of interest of NBDB will be updated should there be any evolution with respect to material conflicts of interest.



¹ Holding directly or indirectly more than 10% of any class or series of voting securities of these entities.