Schedule A to the Client Account Agreement
RELATIONSHIP DISCLOSURE
Coinsquare Capital Markets Ltd.
This Relationship Disclosure document (“RDD”) contains important information concerning the relationship between you and Coinsquare Capital Markets Ltd. (which is referred to throughout this document as “Coinsquare,” “we,” or “us”). It contains information about us, our affiliates, the services and products that we offer, the nature of the account(s) you have with us, the manner in which they are operated, and our responsibilities to you.
This RDD also describes conflicts of interest that arise, or may arise, between us and any individuals acting on our behalf and on behalf of our clients, or between the differing interests of two or more of our clients to whom we owe, in each case, a duty that a reasonable investor would expect to be informed of or that we believe is necessary to disclose to our clients to ensure they are adequately informed of matters that may affect the services we provide to them.
Additional important information you need to know about your relationship with us is contained in other documents we provide to you, such as the Client Account Agreement to which this RDD is attached (as Schedule A) and any information provided to you electronically at account opening, as well as trade confirmations, account statements, and the updates we provide to you, from time to time, about any changes that have occurred to the information that you have received from us. Specific documents that you may receive from us during the course of our relationship are discussed in section V (“Account Documentation”) and section XI (“How We Report to You About Your Accounts”) below.
This RDD is provided to you at the time when you open your account(s) with us, or before we begin providing trading services to you. If there is a significant change to the information contained in this RDD, we will provide you with the updated information in writing in a timely manner, either by providing an updated RDD or by including the updated information in a regular client communication, such as an account statement.
Coinsquare carries an order-execution only business that provides its clients with an electronic trading platform for digital assets. Coinsquare is a wholly-owned subsidiary of Coinsquare Ltd. (formerly known as GoNumerical Ltd.), whose parent company is WonderFi Technologies Inc., (a related and connected issuer) a B.C corporation listed on the TSX as WNDR. Coinsquare is also affiliated with the following additional companies directly or indirectly (with the jurisdiction of incorporation noted in parentheses):
In addition, Coinsquare Ltd. has an ownership stake (25% or more) in the following entities:
Please note that Coinsquare owns more than 25% of Tetra, and uses Tetra for cold storage custodial services to securely hold certain digital assets belonging to clients. Tetra received its Certificate of Registration from the Government of Alberta on July 5, 2021. Tetra is regulated by the Alberta Treasury Board and Finance (“ATBF”) Coinsquare is authorized to use Tetra as a digital asset custodian pursuant to exemptive relief from CIRO’s prescribed Acceptable Securities Location requirements to have minimum net worth of $100,000,000, on the condition that their custody is limited to regulated digital assets, they continue to meet ATBF’s custodian and oversight requirements, and these conditions are disclosed to clients.
Any future material conflicts will be added to this disclosure.
Coinsquare offers its clients order execution only accounts for trading digital assets. Depending on the size of your order, you may choose from several options offered by Coinsquare: Coinsquare Trade, Coinsquare Pro, and OTC. For a comparison of the unique features of each option, please consult the help center, which is available on the Coinsquare website
Coinsquare is not a full-service securities dealer. In order to trade digital assets, we enter into crypto currency contracts with clients which are subject to securities regulation because clients do not take immediate delivery of the underlying digital assets. We do not currently offer any trading of securities, such as fixed income securities, traditional exchange-listed equities, mutual funds, exchange traded funds, precious metals certificates, or options, but may offer trading in these products in the future. Moreover, we do not provide tax advice in respect of any of the services or products we offer. For more information about the products and services we offer, including a list of the specific digital assets available for trading through Coinsquare, please visit our website at www.coinsquare.com. Coinsquare cannot guarantee that a coin will be available for withdrawal. Certain coins may experience liquidity constraints affecting client positions. Additionally, certain coins may be discontinued with a limited time warning. Coinsquare will notify clients promptly of any discontinuance of coins so clients may take action.
Coinsquare will not provide any advice or investment recommendations to you, and will not conduct any suitability determination for your orders before accepting them for trading. You alone, as a client, are responsible for your own investment decisions, and Coinsquare will not consider any suitability factors, including, but not limited to, your financial situation, investment knowledge, investment objectives, time horizons, or risk tolerance when accepting orders from you.
Notwithstanding the above, as an order execution only firm, Coinsquare is expected to ensure the overall appropriateness of the account for you before opening it. To that end, as part of your new client account application materials:
If for any reason you now doubt or disagree with the above statements, or if any of the information you provided at account opening is now incomplete or inaccurate, you must notify us at once so that we can either suspend or close your account(s) or gather additional information to support a determination regarding the overall appropriateness of your account(s) for you.
All accounts held at Coinsquare are “cash” accounts; in other words, all Coinsquare accounts operate on a “fully funded” basis, and Coinsquare does not extend margin, nor do we in any other way loan fiat currency or digital assets to any of our clients.
We provide you with various types of documentation in connection with your account. At the time of opening your account with us, you will receive a summary of your completed account “on-boarding” (application) form. This includes the information about you, referred to as “Know-Your-Client” information, which we collected from you (as explained in greater detail in section IX below), as well as the following documents:
As a client of Coinsquare, you will pay fees for the services provided by Coinsquare. Fees include those charged by Coinsquare for you to deposit or withdraw funds from your account and to withdraw digital assets from your account.
Coinsquare may also earn a “spread” on your transactions, i.e., remuneration that Coinsquare receives as a “mark-up” added to the price of a digital asset that you purchase, or a “mark-down” that is deducted from the price of a digital asset that you sell. When you initiate an order to buy or sell a digital asset with Coinsquare, the fee (spread) you pay will be added to the best observed price at which Coinsquare can buy that digital asset through its liquidity providers, or subtracted from the best observed price at which it can sell the digital asset through its liquidity providers. After you have initiated your order, Coinsquare will present this adjusted price to you as a price quote at which Coinsquare is willing to transact with you, absent unusual market conditions or technological problems. The quote will include a range within which the spread falls. If you find the price agreeable, you then accept the price and agree to the trade. In addition, Coinsquare may apply a foreign exchange spread in a transaction if you deposit Canadian dollars and request a purchase of a digital asset that trades in US dollars.
All fees are set out in the “Fee Schedule” available on our website at www.coinsquare.com. You will not incur any other fees or costs in respect of the operation of your account(s) with us.
All Coinsquare client accounts are held in US or Canadian dollars only.
As explained in greater detail in section IV above, we do not provide any suitability determination on an order-by-order basis for any order that you execute through our trading platform.
“Know-Your-Client” (or “KYC”) information is information about you that we must obtain from you (and in some cases, verify), as well as accurately maintain, pursuant to applicable Canadian anti-money laundering and securities laws and regulations. KYC information includes, but is not limited to, your:
Coinsquare provides you with a copy of the KYC information that we obtain from you and document at the time of your account opening and whenever there are significant changes to that information.
There are currently no generally accepted benchmarks for digital assets. As the marketplace for digital assets evolves and matures over time, one or more reliable benchmarks may emerge, at which point Coinsquare would consider making such benchmarks available to you so that you may assess the performance of your digital asset investments by comparison.
We will report to you about your accounts on an ongoing basis, primarily in the form of trade confirmations and account statements.
Trade confirmations
You will receive a trade confirmation from us promptly upon completion of each trade that occurs in your account, e.g., a purchase or sale of a digital security.
The trade confirmation will contain details about the trade including:
Account statements
You will receive an account statement from us on at least a quarterly and annual basis. You will also receive an account statement from us for each month during which any one or more transactions were effected in the account; such monthly account statements shall be sent during the month following the month in which the transaction(s) occurred.
The account statements that we provide to you will include details concerning the transaction(s) that occurred within your account during the reporting period, and will include the following information for the reporting period:
Client Responsibility
It is your responsibility to review each trade confirmation, account statement, and any other trade or business-related information that we send you about your account, and to inform us in a timely manner if you believe there is an error or omission, or if you otherwise do not agree with the information shown in these documents. (For further information about submitting a complaint to Coinsquare, see section XIV below.)
Coinsquare may engage in referral arrangements, in accordance with NI 31-103, in which existing or prospective clients are referred to or from another party. Referrals will be governed by a referral arrangement agreement, and the referral details will be provided to the client prior to the first trade.
While Coinsquare seeks to avoid or minimize conflicts where reasonably possible, some conflicts cannot be avoided. We have policies and procedures in place to manage the conflicts of interest that we believe are sufficient to protect the interests of our clients and fulfill our obligations to our clients. At a minimum, Coinsquare and its employees will avoid all existing and reasonably foreseeable material conflicts of interest, and if such conflicts cannot be avoided, they will be addressed in your best interest and will be disclosed, where required, to you in a timely manner, upon identification of the conflict.
All of our services will be carried on by us in accordance with our usual practices and procedures and in accordance with all applicable disclosure and other regulatory requirements. It is our policy to comply fully with all applicable securities laws regulations and to make all required disclosures.
The general types of conflicts of interest which can arise are:
As an investment dealer, Coinsquare is a financial intermediary. As is the common practice in the securities industry, sometimes Coinsquare is the party on the other side of an order you place (which, from the perspective of Coinsquare, is referred to as a “principal” trade), where Coinsquare owns the digital asset it sells to you. On other occasions, Coinsquare simply facilitates a transaction between you, as our client, and a third party on the other side of the transaction through an “agency” trade, where Coinsquare has no ownership interest in the security traded.
In general, we deal with and manage relevant conflicts as follows:
In particular, Coinsquare has identified a potential conflict between itself and its affiliated custody services provider, Tetra, resulting from (a) the corporate affiliation between the two through ownership (in different proportions) by the same parent and (b) the relationship between two entities as a result of the custody services provided by Tetra to Coinsquare. Therefore, it is conceivable that resourcing conflicts could arise, which could adversely impact Coinsquare’s clients. In order to minimize this potential conflict, Coinsquare’s service contract with Tetra contains detailed service-level standards and associated key performance indicators, which will be closely monitored by Coinsquare’s senior management; this will ensure that acceptable standards of service in the best interests of Coinsquare’s clients are maintained at all times.
Coinsquare maintains several additional safeguards in accordance with its Dealer Conflict of Interest Policies and Procedures manual (which is available on the Coinsquare website at www.coinsquare.com), including the separation of its physical premises from those of its corporate affiliates, including Tetra, and a strict prohibition on sharing confidential client information with Tetra or any other affiliated or unaffiliated service provider.
Coinsquare also has regulatory approval to operate a marketplace that is an alternative trading system (or “ATS”), which it operates as a separate business entity. When providing services to you as a retail client, Coinsquare is operating as a dealer; in contrast, the services of the ATS are only offered to other CIRO dealers and large institutional investor firms. While the dealer and ATS businesses are both operated through a single corporate entity (which is a wholly-owned subsidiary of Coinsquare Ltd.), each business unit has its own employees, and trading information is never shared between the two business units. Moreover, the Coinsquare dealer will never receive any preferential treatment as compared to other dealers that may trade on the Coinsquare ATS. For additional details on how Coinsquare has addressed all potential conflicts between its dealer and ATS businesses, please see the Coinsquare ATS’s Conflict of Interest Policies and Procedures, which is available on the Coinsquare website at www.coinsquare.com.
This information is intended to assist you in understanding and assessing material potential and actual conflicts of interest, including how we address them. This is an overview of a complex subject. Despite that, we believe the simplest control is the most effective: your continued satisfaction and patronage. If you ever have any questions or concerns, whether they involve conflicts of interest or anything else, you should never hesitate to say so and ask Coinsquare Customer Success for more information or an explanation.
The Coinsquare Code of Business Conduct and Ethics documents our core values and standards, including general standards for how we deal with conflicts of interest; it is available on our website at www.coinsquare.com. You should also refer to the Client Account Agreement (to which this RDD is attached as Schedule A).
For more information describing some of the specific conflicts of interest we may face, as well as the methods we have for responding to those conflicts, please see Appendix A.
Our goal is to provide quality service to every client. We value your business and are dedicated to building strong and rewarding relationships with all of our clients.
However, should you have a complaint concerning our services, the following summarizes our complaint handling procedures. In addition, when you open your account(s) with us, we will provide you with copies of two CIRO brochures concerning the complaint handling process entitled Making a Complaint – A Guide for Investors (Part 1 of 2). These brochures (and additional information) are available on the following pages of the CIRO website:
A complaint is your expression of dissatisfaction, either verbally or in writing, regarding your account, the service provided to you by Coinsquare, or any other aspect of our business relationship, and should be submitted directly to Coinsquare by you or by someone who is authorized to act on your behalf.
Depending on the nature of the complaint, as a first step, you may wish to contact a Customer Success team representative who may be able to provide you with a quick resolution to your matter. Should you be dissatisfied with the resolution provided to you, or in the event of a more significant complaint, you may forward your complaint in writing directly to:
Chief Compliance Officer
Coinsquare Capital Markets Ltd.
110 Cumberland St, Unit 342
Toronto, ON, Canada M5R-3V5
Email: compliance@coinsquare.com
Timelines
Within five (5) business days of our receipt of your complaint, you will be provided with an acknowledgement letter confirming the name and contact information of the Coinsquare employee handling the review of your complaint. Additionally, we will enclose the two CIRO approved complaint handling process brochures referred to above (i.e., Making a Complaint – A Guide for Investors (Part 1 of 2) and How Can I Get My Money Back? A Guide for Investors (Part 2 of 2)).
In conducting the review, we may contact you or your authorized agent to request additional information which may be required to resolve the complaint.
Within ninety (90) calendar days, you will be provided with either our substantive response to your complaint or correspondence acknowledging that we require additional time or information in order to complete our review.
Our substantive response letter will provide an outline of your complaint, Coinsquare’s decision on the complaint, and the reason for this decision. You will also be provided with additional information regarding your options to escalate your concerns further in the event that you are not satisfied with the outcome of the review. This includes contact information for the Ombudsman for Banking Services and Investments (“OBSI”) and CIRO.
For residents of Quebec, we also wish to inform you that, if you are dissatisfied with our review of your complaint or the outcome of this review, you may request that your complaint file be transferred to the Autorité des marchés financiers (the “AMF”). To do so, you must wait for our final decision or the expiry of the time limit of 90 days, and your request must be submitted no later than one year after the date you have obtained our final response. Following the transfer of your complaint to the AMF, the latter will proceed with their own investigation.
Have questions? Please contact us at compliance@coinsquare.com
APPENDIX A: SPECIFIC CONFLICTS OF INTEREST
Conflict of Interests and Primary Methods we use to Manage the Conflict
We earn compensation by selling products and services to you for which you pay us.
We may sell you securities which we own (called principal trades) and profit by doing so.
Coinberry utilizes a white-labeled instance of the Bitbuy tech platform
Twenty One Digital (21D) participates as a registered user of the Bitbuy Platform’s API.
