Scotia iTRADE^® policy on multiple marketplace trading and best execution

For trading on multiple marketplaces, the Principal Marketplace (as defined by securities regulatory authorities) for securities listed for trading on the Toronto Stock Exchange ("TSX") or Toronto Venture Exchange ("TSX-V") will be the TSX and TSX-V, respectively. The Principal Marketplace for securities listed for trading on the Canadian Securities Exchange will be the CSE. The Principal Marketplace for securities listed for trading on the CBOE Neo Exchange will be NEO..

References to the alternate marketplaces may include at this time: Canadian Securities Exchange (CSE/PURE, CSE2), MatchNOW, Nasdaq Canada (CXC, CX2, CXD), NEO Exchange-CBOE Canada (NEO-N, NEO-L, NEO-D, Tradelogic Markets (Omega ATS, Lynx ATS), TMX Group (TSX, TSX Alpha Exchange, TSX Venture, TSX DRK).

The principal marketplaces operate in a continuous session between 9:30 am (ET) and 4:00 pm, Monday through Friday, not including statutory Canadian holidays. The principal marketplaces, may offer extended hours from 4:15 pm to 5:00 pm. Alternate marketplaces may offer continuous trading between the hours of 9:00 am and 5:00 pm . All references to time in this document are references to Toronto local time which is Eastern Standard Time or Eastern Daylight Savings Time when in effect.

Unless notified otherwise by Scotia iTRADE, the "default" marketplace for all orders for securities listed will be on it’s Principal Marketplace as outlined above.

The Scotia iTRADE Customer Service Desk will be available for order execution during Principal Marketplace hours (including extended hours). Orders may be placed electronically through: (i) the Scotia iTRADE website and Trade Pro, the IVR and Scotia iTRADE mobile devices 24 hours-a-day.

The following (the "Standard Handling of Orders") applies to orders routed through Scotia iTRADE's SOR service:

• an order received prior to 9:30 am will be booked to the pre-opening of the Principal Marketplace for execution on the opening;

• an order that is received after 5:00 p.m. will be entered the next business day to the pre-opening of the Principal Marketplace

• in respect of an immediately executable order received after the opening of the Principal Marketplace and prior to 5:00 pm, Scotia iTRADE will make reasonable efforts to enter the order into the marketplace with the "best price" at the time of order entry ("trade-through protection"). This may involve routing the order between marketplaces to fill the portions of the order that are tradable at the time of order entry at the prevailing "best price". The marketplace with the "best price" is the marketplace that is accessible through the Scotia trading technologies network, provides pre-trade transparency, is fully automated, supports all attributes of the order, and at the time of order entry has the best bid (buy price) or ask (sell price) for the security being traded;

• any portion of an order that cannot be immediately filled will be booked to the default marketplace and will remain in that marketplace until the order is filled, expired, changed or cancelled;

• if an order booked to the default marketplace is changed, Scotia iTRADE will make reasonable efforts to seek the marketplace with the "best price" at the time the order is changed;

Certain types of orders have specific handling implications in a multiple marketplace environment. These have been addressed as set forth below:

• 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 Handling of Orders". All Day Orders expire, if not filled in full, at the end of the trading sessions of the Principal Marketplace (5:00 pm

• Good Til Date Orders
  Good Til Date ("GTD") orders are orders that will remain open until a specified date of expiry. These orders will be handled in accordance with the "Standard Handling of Orders". The balance of any unfilled GTD order will remain in the default marketplace until the order is executed, changed, cancelled, or expiry, whichever occurs first. GTD orders expire at 5:00 pm on the expiry date specified in the client's order. Changed GTD orders will be handled as described below.
  
  If a GTD order that is booked to the Principal Marketplace as described above is changed, Scotia iTRADE will make reasonable efforts to seek the marketplace with the "best price" at the time the order is changed. Any unfilled portion will be booked as a new order on the default marketplace, . The GTD order will expire on the specified date of expiry.

• Market Orders
  A Market Order is an order to buy or sell a security at whatever price is available in the marketplace. These orders will be filled in accordance with the "Standard Handling of Orders".

• Limit Orders
  A Limit Order is an order for a security at a specific minimum sale price or maximum purchase price. These orders will be filled in accordance with the "Standard Handling of Orders".

• Special Terms
  Special terms orders are orders with special terms that are not executable in the regular market. The special terms orders supported by Scotia iTRADE are Odd Lot orders. Odd lots only trade as “All or None” which means partial fills are not accepted.

• Short Orders
  These orders will be filled in accordance with the "Standard Handling of Orders".

• Short Exempt Orders
  These orders will be filled in accordance with the "Standard Handling of Orders". 

• Stop Limit and Stop Market Orders
  Stop Limit (Sell) orders are orders that become booked limit orders when a board lot is traded at or below the trigger price on the marketplace to which the order has been booked. 
  
  Stop Limit (Buy) orders are orders that become booked limit orders when a board lot is traded at or above the trigger price on the marketplace to which the order has been booked. 
  
  Since these orders are not immediately executable on order entry, when these orders are booked to the marketplace they will be booked to the Principal Marketplace for execution and will remain on the Principal Marketplace until cancelled, executed, or expiry. Once booked to the Principal Marketplace, if these orders are changed, they will be handled in accordance with the Standard Handling of Orders. 
  
  Stop (Sell) orders are orders that become booked market orders when a board lot is traded at or below the trigger price on the marketplace to which the order has been booked. 
  
  Stop (Buy) orders are orders that become booked market orders when a board lot is traded at or above the trigger price on the marketplace to which the order has been booked. 
  
  When a Stop (Sell) order or Stop (Buy) order is triggered, the order initially becomes a Limit order on the Principal Marketplace. Scotia iTRADE automatically cancels the Limit order and submits a new Market order which is subject to the Standard Handling of Orders. 
  
  Since these orders are not immediately executable on order entry, when these orders are booked to the marketplace they will be booked to the Principal Marketplace for execution and will remain on the Principal Marketplace until cancelled, executed, or expiry. Once booked to the Principal Marketplace, if these orders are changed, they will be handled in accordance with the Standard Handling of Orders.

• Extenuating Circumstances 
  In the event that all ATS marketplaces are down, Scotia iTRADE will route all orders directly to the Principal Marketplace for execution. In such circumstances, and solely at the client's direction, Scotia iTRADE will make reasonable efforts manually to cancel any live orders previously booked to an ATS but remains unfilled. Until the alternate marketplaces are restored, the retail client will not receive any fills, renounced fills, trade corrections, or unsolicited cancels on these orders, nor will the retail client have the ability electronically to change or cancel these orders. Until ATS connectivity is restored, orders subject to "Standard Handling of Orders" will be executed on the Principal Marketplace. 
  
  In the event that the Principal Marketplace is down, all orders for it’s listed securities will be rejected. In these circumstances, and solely at the client's direction, Scotia iTRADE will make reasonable efforts manually to cancel any live orders previously booked to the Primary Marketplace but remaining unfilled. Until the Principal Marketplace is restored, the retail client will not receive any fills, renounced fills, trade corrections, or unsolicited cancels on these orders, nor will the client have the ability to electronically change or cancel these orders. 
  
  In the event that one ATS is down but not all, all orders for securities will be handled as above with only the active markets considered for best price execution. In these circumstances, and solely at the client's direction, Scotia iTRADE will make reasonable efforts manually to cancel any live orders previously booked to the down marketplace but remaining unfilled. Until the down marketplace is restored, the retail client will not receive any fills, renounced fills, trade corrections, or unsolicited cancels on these orders, nor will the client have the ability to electronically change or cancel these orders. 
  
  In the event the SOR service becomes inaccessible for any reason, Scotia iTRADE will route all orders directly to the Principal Marketplace for execution. In such circumstances, and solely at the client's direction, Scotia iTRADE will make reasonable efforts manually to cancel any live orders previously booked through SOR but remaining unfilled. Until the SOR service is restored, the retail client will not receive any fills, renounced fills, trade corrections, or unsolicited cancels on these orders, nor will the client have the ability electronically to change or cancel these orders.

An order executed on more than one marketplace will be reported to the client using a trade confirmation that confirms that the trade was executed on more than one marketplace. If the trade was executed at multiple prices, the trade confirmation may provide for average prices. In each of these circumstances, the confirmation will indicate that details are available on request.

Best Execution Overview

When we buy and sell securities on your behalf, we diligently pursue the execution of your securities orders on the most advantageous terms reasonably available in the circumstances (commonly referred to in securities regulation as the “Best Execution” obligation).

In discharging our Best Execution obligation to you, we may consider a range of factors relevant to the execution of your trade, including but not limited to the price at which the trade would occur on different marketplaces; the speed of execution available; the certainty of execution available; and the overall cost of the transaction. Generally, price and execution costs will be our primary consideration when making Best Execution decisions.  We may also consider the available liquidity displayed on the different marketplaces relative to the size of the client order; the extent of exposure to settlement risk in making the trade; and the applicable foreign currency exchange rates in effect.

The Canadian securities marketplace continues to evolve and has expanded to include a number of alternative trading systems (ATSs). Securities which are listed and traded on The Toronto Stock Exchange or the TSX Venture Exchange may also trade on these ATSs. In addition, these securities may be listed and traded on certain foreign markets (e.g. a U.S. organized regulated marketplace, such as the New York Stock Exchange.)

Using both third party and proprietary smart order routing technology, Scotia Capital Inc. will diligently pursue the Best Execution of each client order on the most advantageous terms reasonably available under prevailing market conditions.  In certain circumstances, we may make the determination to route all or part of your order for execution to a foreign marketplace such as a U.S. marketplace, in order to achieve Best Execution. As appropriate, we will modify and enhance our order routing practices to the benefit of our clients.

In executing your trades, we incur certain costs and, in seeking the Best Execution of your trades, we may achieve certain trade efficiencies that result in a lowering of our costs to the benefit of the firm. We also earn revenue such as trade commissions in executing your trades. Depending on the market or marketplace to which your orders may be routed, we may receive remuneration for directing orders to a particular broker-dealer or market center for execution and revenue from a conversion of currency in respect of the trade.  We will not pass along any order execution costs, nor refund ant rebates associated with order execution directly to our clients.

Hours of operation for trading in publicly listed Canadian securities is between 9:30 a.m. and 4:00 p.m., Eastern Standard Time (“EST”), Monday through Friday, not including statutory Canadian holidays. Day orders received after 4:00 pm will not be booked on any market unless the order complies with the policies of the “Special Trading Session” as defined by the TSX.

Orders received after midnight and prior to 9:30 am will be entered into the trade execution systems in accordance with the trade instructions.

Handling of Orders

A. Orders received prior to the 9:30 am: Will be entered to the pre-opening session of a marketplace with trading hours of 9:30 am to 4:00 pm unless otherwise specified by the investor.

B. Orders received after 4:00 pm: Will be entered the next business day to the preopening of a marketplace with market hours from 9:30 am to 4:00 pm unless specified by the investor for execution in the after-hours markets unless the order complies with the policies of the “Special Trading Session” as defined by the TSX.

C. Order treatment and routing: Orders are valid between the hours of 9:30 a.m. and 4:00 p.m. EST. Orders received after the open of a Marketplace, will be routed to the marketplace with the best available price through the use of smart order router technology. Unfilled orders will expire on the marketplace where the order was last routed. In the event a marketplace is not available, orders will be re-routed to other marketplaces on a best-efforts basis. Day orders booked prior to 4:00 pm on markets utilizing an after-hours facility may execute up to 5:00 pm that day.

Special Order Types

For information regarding special order types please contact our Customer Service.

Currency conversion if we trade securities for you in a foreign marketplace

Under certain circumstances, in diligently pursuing the execution of securities orders placed by you in your account on the most advantageous terms reasonably available in the circumstances (commonly referred to in securities regulation as the Best Execution obligation), we may make the determination to route all or part of your order for execution to a foreign marketplace (e.g. a U.S. organized regulated marketplace).

In making the determination as to where your order should be executed to achieve best execution, we may consider a range of factors relevant to the execution of your trade, including but not limited to:

a. the price at which the trade would occur on different marketplaces available in the circumstances;

b. the available liquidity displayed on the different marketplaces relative to the size of the client order;

c.  the extent of trading in the particular security on the different marketplaces;

d. the speed at which execution would occur;

e. execution and other costs associated with the trade on the different marketplaces;

f.  the extent of exposure to settlement risk in making the trade, if any; and

g. the applicable foreign currency exchange rates in effect.

If it is determined that all or part of a client order should be transacted on a foreign marketplace in the circumstances, and the securities traded in the foreign marketplace are denominated in a currency other than the currency of the account in which the trade will settle, a conversion of currency may be required. In all such transactions, if the currency conversion is transacted by us or a party related to us (or a third party), we (or the third party) will act as principal in converting the currency at conversion rates established or determined by us or parties related to us (or the third party), as described above. We or a party related to us (or a third party) may also earn revenue on the transaction, in addition to the commission applicable to the trade, based on the difference between the rates for the currency applied to the clients’ currency conversion transactions and the rates at which the dealer ultimately offsets any resulting foreign exchange exposure it may have as a net buyer or net seller of the foreign currency. Conversion of currency, if required, will take place at the trade date unless otherwise specified or agreed.

The trade will be settled in your account in the currency of your account.

Fair Pricing

Scotia Capital Inc. will make all reasonable efforts to obtain a price that is both fair and reasonable, taking into consideration all reasonable factors, when purchasing or selling fixed income securities on behalf of clients.  Buys and sells of fixed income securities are facilitated utilizing an interface from ScotiaOnline to Perimeter CBID (owned and operated by Perimeter Markets Inc., a separate legal entity and not affiliated with Scotia Capital Inc., ScotiaiTRADE or any Scotiabank entities), which operates as an electronic, multi-dealer Canadian fixed income marketplace.  This marketplace brings together dealers, clients and liquidity providers in an effort to provide price discovery and executions utilizing fair market principles.  

For securities not available through this ScotiaOnline channel, clients may contact an Investment Representative through our contact centres who will, on a best efforts basis, obtain quotes, provide indicative pricing and place orders through the retail bond desk within Scotiabank for fixed income and over the counter securities that are able to be priced.  The retail bond desk may source liquidity from within Scotia Capital Inc., other market participants, liquidity providers, and/or the inter-dealer network.  ScotiaiTRADE may not be able to either quote a security or source liquidity from a third party where market conditions are not favourable or where liquidity is not obtainable for a particular security.

As disclosed in our fee schedules, ScotiaiTRADE commission pricing is a flat $1 per $1000 face value when placed online, or $1 per $1000 face value plus $65.00 when placed with an Investment Representative

Conflicts of Interest

iTRADE and Scotia Capital Inc., have established procedures that are designed to identify and manage conflicts of interest.  In particular:

a. We may receive compensation by trading destinations, including electronic communication networks, market makers and exchanges in connection with trades on markets we direct to such destinations through affiliates or directly.. Industry regulations dictate our best price and Best Execution obligations to you. We disclose to you our ownership interests in marketplaces.

b. We may engage in trading of securities for our own account (called proprietary trading). We maintain information barriers between our corporate trading activities and retail brokerage business.  Firm and employee trades are identified as such and client trades are given priority to firm and employee trades in accordance with industry “client priority” regulations.

c. We may sell you securities which we own (called principal trades) and profit by doing so.  We will tell you whether we acted as principal or agent for each transaction on the trade confirmation.  In the case of fixed income securities (which we always sell as principal) we provide you with a stated yield to maturity so you can assess the competitiveness of our pricing.

For more information describing some of the conflicts of interest we may face and the methods we have for responding to those conflicts see the Scotia iTRADE Relationship Disclosure Document and Terms and Conditions (Appendix A).