Regulatory information

For a number of years, Canadian investment authorities and organizations have been working closely together to improve and standardize the information disclosed to clients.

This has led to the development of a set of new regulations called the Client Relationship Model, or CRM. These regulations were implemented in three phases.

Phase 1 (2014) – Transparency

Regulations introduced on July 15, 2014, require that certain information must be disclosed to clients, including benchmark information and fees, as well as annual returns and commissions for debt securities.

Phase 2 (2015) – Account Statements

Amendments to Phase 2 took effect in December 2015. Minor changes were made to the definition of book value in the Important Information section of your portfolio statement to comply with regulations.

Three footnotes (marked with an asterisk) may also appear in the Asset Details section with additional information on your securities.

Footnotes :

1. Price not available: This means that the price of a security was not available at the statement date. Once the market price becomes available, it will appear on the statement.

2. Redemption fees: This means that a security may be subject to back-end fees (e.g. investment fund with redemption fee). Depending on the length of time you hold the security, the issuer may charge you when you redeem it.

3. Book value based on market value: This means that the information we had on a security's book value was incomplete or unavailable, and so the market value was used to assess some or all of the book value, in compliance with regulations. This type of situation can occur in the event of a transfer.

You can adjust the book value of a security by completing form 27740. Do you have any questions? Check out the Book value section of our FAQ.

Phase 3 (2016) – New Annual Reports

As of 2016, two new annual reports must be issued to clients. These reports are sent in December with the annual portfolio statement.

New reports:

1. Investment Performance Report: This report provides an investor's returns (in dollars and percentages) based on contributions, withdrawals and fluctuations in market value. It allows you to check whether you're on the right track with your investments goals.

2. Fees and Compensation Report: This report sets out the amounts NBDB receives in a year from clients' direct brokerage accounts. It is divided in two:

• Amounts clients have paid to us directly
• Amounts received through a third party

More information on MRCC 2

For further information on these regulations, please visit the CIRO and CSA websites.

Find complete information on the Foreign Account Tax Compliance Act (U.S.) at nbc.ca.

As of May 2016, clients are sent a document called Fund Facts before they purchase an investment fund for the first time. Clients are responsible for reading this document thoroughly before making a decision.

This measure was put in place by the Canadian Securities Administrators (CSA).

Why was this change made?

Further to the changes made by the CSA, the Fund Facts document is sent to the client at an earlier stage in the transaction. Rather than sending it two days after a fund is purchased, it must now be sent before the investor makes a purchase.

This change was brought about to ensure investors have adequate time to read about a security before making a purchase.

How are Fund Facts sent?

If the transaction is carried out through our transactional website, the Fund Facts will be available online in PDF format before the transaction is confirmed.

If you carry out the transaction over the phone with one of our representatives, the Fund Facts document is sent by email, fax or mail, whichever you prefer.

The CSA confirmed that Fund Facts do not need to be sent to investors who have already received the most recent version. For clients with pre-authorized debits, the Fund Facts document will be sent when they first sign up.

What you need to do

You are responsible for reading the Fund Facts for investments you are interested in so you are familiar with their main features.

You'll receive Fund Facts when you buy an investment fund for the first time and whenever the Fund Facts are updated, which is at least once a year and when major changes occur. You will not be able to purchase fund units until you receive the Fund Facts.

What is the Fund Facts document?

The Fund Facts document contains important information on the fund you would like to invest in. There is a specific Fund Facts document for each investment fund with information on the securities it includes, returns, risks and fees.

For more information, you can view an interactive Fund Facts document provided by the Canadian Securities Administrators.

Questions?

Click on Contact us on our website or send an email to directbrokerage@nbc.ca. You can also call us at 1-800-363-3511, option 3

CSA publication

You can view the CSA document detailing all amendments to disclosure regulations when you sign up.

Click here for our Best Execution Public Disclosure Statement.

Referral agreements (incentive agreements)

National Bank Direct Brokerage and other National Bank subsidiaries occasionally refer clients to each other. These internal referrals are made when appropriate, for example if the first subsidiary does not offer all the services a client needs.

If a client is referred to a subsidiary registered under the Securities Act, such as NBDB, this subsidiary is responsible for completing compliance and supervision tasks.

Incentive commissions

The incentive referral agreements that National Bank Direct Brokerage enters into from time to time with another Member under which National Bank Direct Brokerage may refer its clients to or may receive referrals from are in exchange for the sharing of commissions. It is important to note that these referral agreements will not increase the costs or fees pertaining to the services provided to a client. Therefore, the client will not pay higher fees as a result of any referral agreements that are entered into by National Bank Direct Brokerage with another Member. However, the commissions shared by National Bank Direct Brokerage and the other Member gives National Bank Direct Brokerage and such other Member incentive to refer clients to each other. The commissions will vary depending on the other Member involved and whether the client is referred to or by National Bank Direct Brokerage.

Currently, there is no referral agreement in effect between National Bank Direct Brokerage and other members of the National Bank group. Thus, no commission is paid or paid by National Bank Direct Brokerage to other members of the group.

Other important information

National Bank Direct Brokerage and other National Bank subsidiaries have adopted policies and procedures to identify and address any potential conflict of interest arising from these agreements. NBDB is not informed of transactions you complete through other National Bank subsidiaries except as regards commission, unless you have provided prior consent.

At National Bank Direct Brokerage we offer Canadian investors a complete, accessible and reliable direct brokerage solution, allowing you to negotiate, plan and take control of your investment decisions easily. This is achieved with the support of a team of dedicated specialists, advanced technology and sophisticated tools.

NBDB offers order execution only services. This means that our clients' orders are accepted and executed without us making any recommendations. Our team does not perform any validation as to the suitability of transactions with respect to the client's financial situation, investment knowledge, investment objectives and risk profile.

Manage your own portfolio

Our direct brokerage services allow you to carry out all the activities related to the management of your own investments from developing a strategy to carrying out your transactions. At NBDB, our trading platform combines flexibility and access to a lot of information and tools. This represents a very attractive solution if you are a self-directed investor.

Simply take control!

By choosing NBDB, you make sure you benefit from one of Canada's top direct brokerage firms. Whether you are a new or experienced investor, we have everything you need to help you reach your financial goals. We offer you access to all the services you need to independently manage your accounts: unparalleled customer service, investment accounts and investment solutions adapted to different types of investors, and powerful investment tools to support you in your investment decisions.

Please read our Relationship Disclosure Information document.

This document contains all the information you need to know about your account and your relationship with us. Take the time to read it, as it contains important information for you. Should you have any questions or comments, do not hesitate to contact us. Our opening hours are from Monday to Friday, 8:00 a.m. to 6:00 p.m. ET.

National Bank Direct Brokerage
800 Saint-Jacques Street
Montreal, QC H3C 1A3
Toll-free number: 1 800 363-3511
Fax:  514 394-8688
Email: directbrokerage@nbc.ca

Securities regulations in Canada require all investment dealers to comply with rules about conflicts of interest. It is important for you to know how we identify and respond to conflicts of interest, as well as how we minimize their impact.

We consider a potential conflict of interest to be any circumstance in which our interests, or the interests of our employees, could be inconsistent with or divergent from the interests of our clients or others who use our services. We take reasonable steps to identify all existing material conflicts of interest, as well as those that are reasonably foreseeable. We then assess the level of risk associated with each conflict.

We avoid any situation that would create a serious conflict of interest or represent too high a risk for you or for the integrity of financial markets. In any other situation, we take appropriate measures to address the conflict in your best interest. Where it cannot be avoided, we will notify you of any existing or reasonably foreseeable material conflict of interest situation as they arise.

For more information on our principles related to the management of conflicts of interest, please consult our document Relationship Disclosure Information, at section Information on situations that could create or be perceived as conflicts of interest.

As indicated in the Relationship Disclosure Information document, National Bank Direct Brokerage (“NBDB”) could in particular be in conflict of interest in its dealing with issuers of securities and related dealers and advisors. NBDB being a division of National Bank Financial Inc. (“NBF”), the issuers, dealers and advisors listed below are those related to NBF.

Issuers or Securities

National Bank of Canada: National Bank of Canada is a bank incorporated under the Bank Act (Canada) and is a reporting issuer that holds indirectly 100% of the voting and equity shares of National Bank Financial Inc.

Canadian Credit Card Trust II: This trust is a trust whose administrator is National Bank of Canada and whose securities are publicly distributed. Consequently, Canadian Credit Card Trust is deemed to be a related issuer.

NBI ETFs: National Bank Investments Inc. (“NBI”), a wholly-owned subsidiary of National Bank of Canada, is the investment fund manager of the NBI ETFs. National Bank Trust Inc. is the portfolio manager of the NBI ETFs. National Bank Financial Inc. acts as designated broker and broker of the NBI ETFs.

NBI Funds: National Bank Investments Inc., a wholly-owned subsidiary of National Bank of Canada, is the investment fund manager of all NBI Funds including, without limitation, the Meritage Portfolios and NBI Private Portfolios, as listed in the NBI Funds prospectus, updated annually. National Bank Trust Inc., acts as portfolio manager of multiple NBI Funds.

Related Dealers and Advisors

National Bank Investments Inc.

National Bank of Canada Financial Inc. 

NBC Financial Markets Asia Limited - in Hong Kong

NBC Global Finance Limited - in Ireland

Natcan Trust Company

National Bank Trust Inc.

NatWealth Management (USA) Inc.

Nest Wealth Asset Management Inc.

Last update: July 2024

You will find below information regarding the various tax slips and forms you may need to prepare your tax return as well as two guides detailing the tax slips we issue to our clients. 

Prior to filing your return, please make sure that you have received all your tax slips to avoid having to submit an amended tax return. Please note that these documents reflect the transactions or the income recorded during the year and that some tax slips may not pertain to your situation. Given the Canadian tax system’s complexity, we recommend that you hire a specialist to prepare your tax return if your situation warrants it.

• Your 2024 tax return
  
• Tax and Investment Guide 2023 (Canada except Quebec)
• Tax and Investment Guide 2023 (Quebec)

What is the dealer rebate?

The dealer rebate represents the amount that an order execution only (OEO) dealer, such as NBDB, will give a client for investment funds with trailing commissions held in an account without advice. This amount will be the amount of trailing commission that the investment fund manager (IFM) will pay the dealer, as long as the client holds the fund.

For what reasons will NBDB grant such a rebate?

In order to ensure a transition in connection with the prohibition on the payment of trailing commissions resulting from the amendments to National Instrument 81-105 Mutual Fund Sales Practices (NI 81-105), which came into effect on June 1st, 2022, the Canadian Securities Administrators have authorized the implementation of dealer rebates granted by the dealer. Accordingly, NBDB will grant a rebate for funds with trailing commissions in certain circumstances.

Under what circumstance will I receive a rebate?

You will receive a rebate from NBDB if you hold an investment fund with trailing commissions in your account, and no redemption for that fund is possible, and no management fee rebate is granted by the IFM.

How will the rebate amount be calculated?

The amount of the rebate granted by NBDB, which will be paid to you, will correspond to the amount of trailing commissions that NBDB will receive from the IFM, for the units held in your account.

How will the rebate payment be made?

NBDB will proceed with the payment of the rebate, by depositing in cash the amount thereof, in the account in which you hold the fund.

What will be the payment frequency?

NBDB will deposit the rebate in your account, as soon as possible, after receipt of the trailing commissions, paid by the IFM. As a guideline, most IFMs make monthly payments to dealers. Therefore, the rebate granted by NBDB will often be made monthly.

Where can I view the rebate payment?

You will be able to see the deposit of the rebate in your account activity history, via the online brokerage platform, the day after the deposit. This transaction will also appear on your next portfolio statement in the “Cash Flow Summary” and the “Activity Details” sections.

What will be the tax impact of this rebate?

We remind you that NBDB does not provide tax advice. Consequently, we invite you to consult a tax specialist or any other expert as to the tax treatment applicable to this rebate. Please note that no tax slip will be issued for this rebate.

What happens if I transfer an account that includes a fund with trailing commissions?

It should be noted that the prohibition on the payment of trailing commissions resulting from the amendments to NI 81-105 means that funds with trailing commissions should not be transferred to accounts without advice.

• If a switch to a series of the same fund with no trailing commissions is not possible, and no management fee rebate is granted by the IFM, you will receive a rebate from NBDB as indicated above.
  
  
• If a series of the same fund with no trailing commissions is available and the fund has no redemption fee¹, NBDB will switch your fund within days of the transfer:
  
  
  • Trade confirmations will be issued for the sale of the trailing commission series of the fund and the purchase of the equivalent series of the non-trailing commission series, as soon as possible;
  • These transactions will be reflected on your account activity history as well as in your next portfolio statement;
  • You will be able to view all the information about the series of the fund without trailing commission on the Fund Facts that will accompany the trade confirmation of the purchase transaction.
     
• If a series of the same fund with no trailing commissions is available but the fund is subject to a redemption fee:
  
  
  • If applicable, NBDB will switch the units of the fund that are no longer subject to the redemption fee within one month of the transfer. You will then receive a rebate for the portion of the units that could not be switched²; or
    
  • NBDB will pay you a rebate for all units held if no switch can be made, i.e. no units have reached the maturity date allowing a free redemption³.
    
  • If NBDB makes a partial switch, you will be informed via the trade confirmations, the account activity history and the next portfolio statement, as noted above.
     
• In any case, you will not be able to purchase any additional units of the fund with trailing commissions that you held, following the transfer of your account with NBDB.

If you have any questions, please do not hesitate to contact our team Monday to Friday, 8 a.m. to 6 p.m. ET at 1-800-363-3511.

¹ Effective June 1, 2022, CSA regulations prohibit redemption fees for investment funds. Some funds purchased prior to this prohibition have a redemption fee (deferred sales charge) that investors must pay when they sell units of the fund. Some funds allow the redemption of an annual pre-established percentage of units at no charge, usually 10%. This redemption fee decreases progressively based on the number of years the units were held.

² Please note that as a result of this partial switch, you will hold two (2) series of the same fund in your account: one series with trailing commissions and one series without trailing commissions.

³ Please note that NBDB will be validating the maturity dates of the redemption fees on a recurring basis. Therefore, it is possible that a switch of a portion of your fund may be made by BNCD during the year. As indicated in Note 2, following a partial switch, you will hold two (2) series of the same fund in your account.