For NBT, a "related issuer" is an issuer of securities on which NBT exercises a decisive influence (e.g., due to the control or influence exercised by NBT on this issuer's securities with voting rights), or an issuer of securities that exercises a decisive influence on NBT. In this context, the term "influence" means to have direct or indirect authority to exercise a decisive influence on the management and policies of the company, either alone or with one or several individuals or companies. In certain jurisdictions, certain connected issuers can be considered related issuers.
For NBT, a "connected issuer" is an issuer or any other issuer related to it who has a debt toward NBT or another type of relationship with NBT, a related issuer of NBT, a director, officer or associate of NBT or a director, officer or associate of NBT, who, as part of the investment of securities of the issuer, is decisive for a potential buyer of securities. Consequently, an issuer is "connected" to NBT if, due to a debt or other type of relationship, a potential buyer of securities could challenge the fact that NBT is independent from the issuer.
As of March 31, 2021, the list of related issuers of NBT that are reporting issuers under Canadian securities laws is as follows. A brief description of the relationship between NBT and each of its related issuers is also provided:
- National Bank of Canada: National Bank of Canada (“NBC”) 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 Trust inc. (“NBT”).
- Canadian Credit Card Trust II: This trust is a trust whose administrator is NBC and whose securities are publicly distributed, which makes it 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. NBT is the portfolio manager of the NBI ETFs. National Bank Financial Inc. (“NBF”) acts as designated broker and broker of the NBI ETFs.
- NBI Funds: NBI, a wholly owned subsidiary of NBC, is the investment fund manager of all NBI Funds (including, without limitation, the Meritage Portfolios, as listed in the NBI Funds prospectus, dated June 17, 2021 and updated annually).
- Investment Grade Managed Duration Income Fund: NBF, which is one of the Agents and the Promoter, is an affiliate of a Canadian chartered bank which has been requested to provide the Fund with a loan facility or prime brokerage facility, the proceeds of which would be used by the Fund for various purposes, including purchasing additional securities for the Portfolio, effecting market purchases of Units, maintaining liquidity and funding redemptions. Thus, this Fund can be deemed to be an issuer related to NBT as per the securities regulations.
- U.S. Banks Income & Growth Fund: NBF, which is one of the Agents and the Promoter for this fund, is an affiliate of a Canadian chartered bank which has been requested to provide the Fund with a loan facility or prime brokerage facility the proceeds of which would be used by the Fund for various purposes, including purchasing additional securities for the Portfolio, effecting market purchases of Units, maintaining liquidity and funding redemptions. Consequently, the Fund may be considered a “connected issuer” of NBT under applicable securities legislation.
NBT has the relationship described above with these related issuers and with National Bank of Canada (“NBC”). NBT or its directors, officers or employees may, from time to time, recommend that you execute a transaction or provide you with advice about a security issued by associated or related issuers. If you would like additional information regarding the relationship between NBT and these associated or related issuers, please contact your NBT representative. For clients residing in Alberta, this is done annually.
In performing its duties as portfolio manager, NBT may:
a) with the client's prior written consent, exercise its discretionary power to buy or sell securities of NBC or other related or connected issuers;
b) formulate recommendations concerning securities of NBC or other related or connected issuers; and
c) sell securities issued by private mutual funds managed by NBT or corporations from the same group.
In addition, NBC or any other related entity may:
a) act as principal or agent for the securities bought or sold by or to NBT clients;
b) act as underwriter or agent for securities sold to NBT clients; and
c) be a secured creditor for securities held in the accounts of NBT clients, including units of private mutual funds managed by NBT.
NBT or its directors, officers or employees may therefore recommend that you carry out a transaction or provide you with advice regarding securities issued by connected or related issuers. Before advising you on the securities of a related issuer or participating in the distribution of securities of a connected issuer, we will inform you, verbally or in writing, of the relationship between the advisor and the issuer of the securities.
NBT's policy is to comply in all areas with applicable securities legislation and provide all required disclosures. In addition, it ensures that any securities transaction involving its related or connected issuers takes the client's situation into account. Should you require further information about the relationship between NBT and its connected or related issuers, please contact your NBT representative.