Multiple Marketplaces & Best Execution Policy – July 2016

Orders for Canadian-listed securities may be executed on the Toronto Stock Exchange (“TSX”), the TSX Venture Exchange (“TSXV”), a number of alternative Canadian electronic marketplaces, or on a foreign organized regulated market.

PI Financial Corp. and its affiliates (collectively “PI”) are committed to use all reasonable efforts to ensure that our clients achieve “best execution” of their orders for securities that are quoted or traded on all marketplaces. This means that PI will diligently pursue the execution of each client order on the most advantageous execution terms reasonably available under the circumstances. More specifically it means that PI will take into consideration a number of general factors including but not limited to: a) the price at which the trade would occur; b) the speed of execution; c) the certainty of execution; and, d) the overall cost of the transaction.

In an effort to ensure best execution, PI uses an electronic “smart router” which will seek the best marketplace(s) at the time of entry. The “best marketplace” is the marketplace with the best bid (buy price) or ask (sell price) or where PI feels the order has the highest probability of being executed.

The following policies and procedures are intended to govern PI’s trading on multiple marketplaces and may affect the manner in which client trades are conducted:

1. Default Marketplace

Unless notified otherwise by PI, the Default Marketplaces for all securities listed on the TSX or TSXV, whether or not the security is trading on other alternate marketplaces, will be the TSX or TSXV. These exchanges operate between 9:30 am EST and 4:00 pm EST, Monday through Friday, not including statutory holidays in Ontario. All references to time in this document are references to Eastern Standard Time (including Eastern Daylight Savings Time).

 

2. Hours of Operation for Trading in Listed Canadian Securities

PI Investment Advisors, trading staff and systems will be available for order execution during Default Marketplace hours. Staff may be available outside of Default Marketplace hours; however, PI will not guarantee the ability to take client orders and/or effect trade execution outside of the hours of 9:30 am to 4:00 pm EST.

 

3. Standard Order Routing Conditions

All orders received for Canadian listed securities will be routed to either the Default Marketplaces or alternative marketplaces as follows:

  1. Orders received prior to Default Marketplace opening (9:30 am EST) are queued in the smart router and will be routed to the best marketplace(s) at the opening of the Default Marketplace that day.
  2. Similarly, Orders received after the Default Marketplace close (4:00 pm EST) are queued in the smart router and will be routed to the best marketplace(s) at the opening of the Default Marketplace on the following business day.
  3. An order received during the Default Marketplace operating hours is handled by the smart router, which will seek the best marketplace(s) at the time of entry.
  4. Any portion of an order that cannot be immediately filled will be entered on the Default Marketplace and will remain in the Default Marketplace order book until the order is filled, expired, changed or cancelled.
  5. Changes to an outstanding order, or portion of an outstanding order, will be handled the same as a new order received and will be treated according to routing conditions (a) through (d) above. In other words, it will be entered into the best marketplace(s) at the time of the change and then the unfilled balance will be entered on the Default Marketplace and will remain in the Default Marketplace order book until the order is filled, expired, changed or cancelled.

 

4. Order Execution

Certain types of orders have specific handling implications in a multiple marketplace environment as follows:

  1. Day Orders
    A Day Order is an order to trade that expires if it is not executed the day that it is booked to the marketplace. Day Orders will be handled in accordance with the “Standard Order Routing Conditions”. All Day Orders expire, if not filled in full, upon the close of the marketplace where the last portion of the order remains effective, unless otherwise agreed to between the client and the Investment Advisor.
  2. Good Til Cancelled (Open) Orders
    Open orders are orders that will remain valid until a specified date of expiry. These orders will be entered in the Default Marketplace if they are not immediately executable on an alternative marketplace at the time of entry. The order will remain in the Default Marketplace until executed or expiry, whichever comes first.
  3. Market Orders
    A Market Order is an order to buy or sell a security at whatever prices are available in the marketplace to help ensure a complete and full fill. Upon entry to the marketplace, these orders require immediate completion. Market Orders will be handled in accordance with the “Standard Order Routing Conditions”. These orders will expire, if not filled in full, on the marketplace where the last portion of the order remains live, at the close of the marketplace.
  4. Limit Orders
    A Limit Order is an order for a security at a specific minimum sale price or maximum purchase price that is not to be exceeded. Limit Orders will be handled in accordance with the “Standard Order Routing Conditions”. The order will expire, if not filled in full, upon the close of the marketplace where the last portion of the order remains live.
  5. Special Terms Orders
    Special Terms Orders are orders with specific terms, typically related to non-standard settlement terms, which are not executable in the regular marketplace. Special Terms Orders will be executed by PI’s trading desk and will only be entered to the Special Terms Market of the Default Marketplace, unless they are immediately executable on an alternative marketplace at the time of entry. Special Terms Orders will expire at the close of the Default Marketplace.
  6. Stop Loss Orders
    Stop Limit Orders are orders that become limit orders when a standard trading unit is traded at, or superior to, the stop loss price on the marketplace in which the order has been booked. These orders will only be entered in the Default Marketplace order book, and will remain there until they order is executed or expires, whichever comes first.
    Stop Loss Orders are orders which become market orders when a standard trading unit is traded at, or superior to, the stop loss price on the marketplace in which the order has been booked. Because of the negative impact which they can have on market integrity and because they may have a negative impact on the price our clients receive in volatile markets, PI does not accept Stop Loss Orders.

 

5. Foreign Organized Regulated Marketplaces

Under certain circumstances, PI may make a determination that, in order to achieve best execution, all or part of a client order must be transacted on a foreign organized regulated marketplace. In making this determination, PI may consider factors including but not limited to: a) the available liquidity displayed on a marketplace relative to the size of the client order; b) the extent of trading in the particular security on the foreign organized regulated marketplace; and, c) the extent of exposure to settlement risk or fluctuations in foreign currency exchange.

 

6. Extenuating Circumstances

In the event of technical or other issues that limit PI’s access to specific marketplaces, or limit access to routing automation, orders received will be directed to either the Default Marketplace or an alternative marketplace as circumstances warrant and as determined at the sole discretion of PI.

 

7. Disclosure of Marketplace

An order executed on one or more marketplace or alternative marketplace will be disclosed on the confirmation slip. The identity of the specific marketplace on which the order was filled is available on request.

 

8. Amendments

Changes to this policy may be made from time-to-time at the sole discretion of PI. Changes will be posted to PI’s website www.pifinancialcorp.com.

If you have any questions or concerns regarding these policies, please contact your Investment Advisor.