Relationship Disclosure Document
R.J. O’Brien & Associates Canada Inc. (RJOC) believes the best way to help you meet your trade and risk
objectives, and for us to keep serving you as a valued client, is to provide you with the account type(s) and access
to markets in a way that best suits your needs.
We want to help you manage your trade strategies in the way that you are most comfortable in today’s changing
environment. We think we can do this most successfully if we both know what to expect from each other. For this
reason, we would like you to have a sound understanding of the products and services we offer; the features of
your account(s) and how it/they operate(s); and our responsibilities to you.
We also want you to understand how your input through the “Know Your Client” (KYC) form you complete is
critical to our meeting your expectations. Securities regulators have recommended that we promote active client
participation for a mutually successful relationship. Regulatory guidance NI 31-103 suggests that we ask you, the
- Keep us up to date. Clients should provide full and accurate information to the firm and the registered
individuals acting for the firm. Clients should promptly inform the firm of any change to information that could
reasonably result in a change to the types of trade strategies or volumes that may be appropriate for them,
such as a change to their income, risk tolerance, or net worth.
- Remain informed. Clients should understand the potential risks of their positions and only trade in contacts
that they fully understand. They should carefully review sales literature provided by the firm. Where
appropriate, clients should consult professionals, such as a lawyer or an accountant, for legal or tax advice.
- Ask us questions. Clients should ask questions and request information from the firm to resolve questions
about their account, transactions, or their relationship with the firm or a registered individual acting for the
- Stay on top of your positions and accounts. Clients should settle margin calls promptly. They should review all
account documentation provided by the firm and regularly review risk strategies employed and positions held.
RJOC will update the Relationship Disclosure (RD) when there are material changes and subsequently refer you to
our website for our most current (RD). If you later have any questions related to the contents of this document, or
need to change your KYC information, please contact your Account Executive. You will be provided with a copy of
the KYC information that we get from you at the time of account opening and when there are materials changes
to the information.
SERVICE(S) AND PRODUCTS RJOC OFFERS
RJOC provides only advised accounts for its retail clients. In the future RJOC may offer managed accounts.
We offer the following products:
- Retail, full-service commodity futures & futures options accounts
- Retail, Suitability-exempt commodity futures & futures options account
- Institutional Order Execution accounts
Your advisor can explain these products to you, as well as how they work, their risks and possible returns, and
whether they are appropriate for you.
ACCOUNT(S) YOU HAVE AND HOW THEY OPERATE
RJOC offers its retail clients both advisory and self-directed accounts for commodity futures & futures options.
RJOC offers order execution services for Institutional client’s. Your advisor is responsible for providing suitable and
unbiased recommendations to you that meet the standard of care expected of a trained investment professional
based on the KYC information that you provided to us. You (or your authorized representative) direct(s) all trading
and is (are) responsible for all trade decisions in your account.
FEES YOU MAY BE PAYING AND HOW THEY ARE CALCULATED
All fees are disclosed as required by regulations and vary depending on the accounts and services you use. We
currently offer only commission-based accounts.
RJOC charges a commission for each trade made in your account, based on a flat dollar amount that is negotiated
between the client and the advisor servicing the account, and is negotiated before the trade is executed in your
account. The commission will be disclosed on your daily statement.
If your account(s) is (are) in a debit position, we will deduct an interest charge from these account(s). The interest
rates are available upon request.
Exchange rates are available upon request.
SERVICE CHARGES AND FEES
Other Service Charges
|Full Account Transfer-out||$100|
|Wire Transfer||$ 25|
|Certified Cheque||$ 25|
|Cheque- Not Sufficient Funds||$ 75|
|Cheque Stop Payment||$ 25|
|Bank Wire-In Fee||$ 10|
Minimum Account Fees
RJOC reserves the right to charge a minimum account fee. The account holder will be notified of the minimum
asset level and the fee amount, no less than 60 days prior to the charging of the fee.
Any miscellaneous fees for service provided by other institutions, such as for 3rd party trading platforms, will be
charged through at cost. Details available upon request.
HOW RJOC ASSESSES THE SUITABILITY OF YOUR TRADING
Before we provide you with recommendations as to which futures or futures options contracts to purchase, or if
you ask us to buy or sell a specific futures or futures option contract, we will first see if we believe that trade is
suitable for you according to our understanding of the information you have given us when you completed the
That is why keeping this KYC form up to date and accurate is very important. If the information provided on your
KYC form is not up to date, we might determine that the order you provided to us is not suitable for you in the
context of our overall assessment of that information. In that case, we must advise against proceeding with the
The suitability factors that guide us in our decision as to an product’s suitability include what we understand by
What financial assets (deposits and investments) and liabilities (debt and mortgage) you have and the sources and
amount of your income – we will consider the size of any transaction compared to the overall value of your net
financial assets (assets minus liabilities).
There is significant leverage available in trading commodity futures, much more so than securities, and it is
therefore necessary to ensure that you have the available liquidity to ensure that commodity futures and/or
foreign exchange trading is suitable for you.
Futures/Futures Options/Foreign Exchange Trading Knowledge (experience)
It is expected that over a period of time with increasing exposure to various products your level of experience
should increase as you would have more exposure to different markets and how different contracts trade. We
therefore ask how many years of trade experience you have as a further guide on what would be suitable for your
Risk tolerance for your accounts is a function of both ability to take risk and willingness to take risk. We make this
determination based on whether you have a full-service advisory account or whether it is a suitability-exempt selfdirected
Full service risk tolerance: As noted on your NAAF, we assign what is called “risk capital” to your account. This is
defined as the amount of money you can reasonably afford to risk, if you lost the entire amount, without affecting
your standard of living. This is why it is critical that we have accurate information as to your total financial overall
picture. It should also be noted, that for this same reason, a client may request a specific risk capital figure, but
our analysis will not permit that total figure and will grant a lesser amount. Under no circumstances, however, will
a risk capital figure be assigned that is higher than that requested by a client unless that client has agreed to that
higher figure in writing, and it has been approved by RJOC Compliance.
Online Risk Tolerance: As noted on the NAAF, we assign what is called “net loss tolerance figure” to this type of
account. This is very different than the “risk capital” that is assigned to full-service accounts, and this is because
these types of accounts are suitability- exempt due to the fact that you are conducting your own trading without
the assistance or advice of an industry professional.
Instead, the risk tolerance assessment is a function of a client’s overall liquidity. Again, this is why an accurate
portrayal of your overall financial picture is critical to this assessment. We need to ascertain, with this type of
account, that you have the liquidity available to cover your requested loss level. Our risk assessment at this level is
firm risk, not client risk. From this assessment, we may not permit the entire requested net loss tolerance level if
our assessment determines that your liquid assets may not protect the firm. Under no circumstances, however,
will a net loss tolerance figure be assigned that is higher than that requested by a client unless that client has
agreed to that higher figure in writing, and it has been approved by RJOC Compliance.
FUTURES, FUTURES OPTIONS & FOREIGN EXCHANGE ARE NOT INVESTMENTS
It is critical that our clients understand that futures, futures options, and our foreign exchange offerings are NOT
investments, and we therefore do not consider your time horizon or investment objectives. Trading in futures,
futures options, and foreign exchange on a speculative basis carries substantial risk of loss.
We operate only speculative and hedge accounts, and each is defined as follows:
Hedge Accounts: Excerpt from CFTC Rule 1.3(z) for a bona fide hedge trade is as follows:
General definition. Bona fide hedging transactions and positions shall mean any agreement, contract or
transaction in an excluded commodity on a designated contract market or swap execution facility that is a trading
facility, where such transactions or positions normally represent a substitute for transactions to be made or
positions to be taken at a later time in a physical marketing channel, and where they are economically appropriate
to the reduction of risks in the conduct and management of a commercial enterprise, and where they arise from:
(i) The potential change in the value of assets which a person owns, produces, manufactures, processes, or
merchandises or anticipates owning, producing, manufacturing, processing, or merchandising,
(ii) The potential change in the value of liabilities which a person owns or anticipates incurring, or
(iii) The potential change in the value of services which a person provides, purchases, or anticipates providing or
(iv) Notwithstanding the foregoing, no transactions or positions shall be classified as bona fide hedging unless their
purpose is to offset price risks incidental to commercial cash or spot operations and such positions are established
and liquidated in an orderly manner in accordance with sound commercial practices and, for transactions or
positions on contract markets subject to trading and position limits in effect pursuant to section 4a of the Act,
unless the provisions of paragraphs (z)(2) and (3) of this section have been satisfied.
The full details of the CFTC Rule can be accessed at the CFTC website: https://www.cftc.gov/
Speculative Accounts: This definition is much easier as it does not involve business interests of risk mitigation, but
instead is, as defined by the CFTC:
“In commodity futures, a trader who does not hedge, but who trades with the objective of achieving profits
through the successful anticipation of price movements.”
As noted earlier then, and in summary, this is why futures, futures options, and foreign exchange are NOT
REPORTS THAT MONITOR YOUR FINANCIAL ASSETS, PERFORMANCE, AND FEES AND CHARGES
We will provide you with written daily statements of the details of every purchase and sale in your account(s) by
email on the day the transactions are completed, or by regular mail if you have so selected on your NAAF. Please
review your statement as soon as you receive it as there are significant consequences if you do not report errors,
omissions, or discretionary trading on a timely basis.
We will mail you a monthly statement(s) for March, June, September and December at no cost to you. All month
end statements will be sent free of charge via email or, at cost via regular mail, every month end where a
Every daily and/or monthly statement or other communication sent by RJOC shall be deemed to have been
acknowledged as correct, being approved upon, by the client. Unless we shall have received written notice to the
contrary within two days after it is sent to the Client.
Risk Capital/Net Loss Tolerance
RJOC monitors for life-to-date profit and loss figures internally. While your statements will reflect month and life
to date figures, you can request from your advisor at any time to provide you with your life-to-date loss figures for
accounts that are held at RJOC. Regardless, RJOC will notify your Advisor automatically when your account has hit
either the risk capital (full service advisory accounts) or net loss tolerance figures (self-directed suitability exempt
accounts) thresholds and it will be solely your determination at that point if you:
– liquidate any existing positions with negative open trade equity
– continue to hold these positions with the desire to “ride out the market”, and request a risk capital update
(subject to an additional form stating this & the approval by Compliance of an updated risk capital/net loss
If the form requesting open trades with negative open trade equity can be maintained, RJOC maintains its right to
liquidate these positions upon notification of the client to mitigate our risk.
CHECKLIST OF DOCUMENTS TO BE PROVIDED TO YOU
- Copy of your New Client Application Form (NCAF)
- RJOC’s written Complaint Handling Procedures
- Canadian Investor Protection Fund (CIPF)
- Making a Complaint – A Guide for Investors – Part 1 of 2
- How Can I get My Money Back? A Guide for Investors – Part 2 of 2
- Opening an Investment Account: A Guide for Investors
- How IIROC protects investors
- Introducing Carrying Broker Disclosure Statement (if applicable)
- Options Agreement
- Welcome letter from the President
- Customer Relationship Disclosure
COMPLAINT HANDLING PROCEDURES
RJOC has created a process for documenting, handling and resolving complaints in an efficient and expedient
The fair and timely handling of client complaints is vital to the overall integrity of the investment industry. RJOC
regards the handling of all client complaints as an essential element of the proper servicing of client accounts
generally, and believes an effective framework for dealing with client complaints is in keeping with appropriate
standards of professionalism in the industry
What Constitutes a Complaint?
- A “complaint” can be against RJOC, the Account Executive on the account, or any other employee of RJOC.
- A complaint is any verbal or recorded expression of dissatisfaction alleging misconduct.
Misconduct is defined as the following:
- allegations of breach of confidentiality
- theft, fraud
- misappropriation or misuse of funds or securities
- unsuitable investments
- unauthorized trading relating to the client’s account(s)
- other inappropriate financial dealings with clients
Note that a mistake or oversight is not misconduct. In the unlikely situation that you have a complaint, RJOC
encourages you to follow the steps outlined here.
Step 1 – Contact your Account Executive
In many instances, complaints may be simple misunderstandings and may be resolved quickly and over the
telephone or in person. As a first step, please contact your Account Executive if you have questions or concerns
about a particular issue.
Step 2 – Send us your complaint in writing
If the problem you have is not solved to your satisfaction after completing Step 1, please detail your complaint in
writing and send it to us. A copy of your correspondence should be sent to the Account Executive, the Branch
Manager (if applicable) at the branch office where the Account Executive is located and to the Chief Compliance
Officer at the following address:
R.J. O’Brien & Associates Canada Inc.
195 Commerce Drive
Winnipeg, MB R3P 1A2
Chief Compliance Officer/Designated Complaints Officer
Once we have your complaint in writing it will be handled in accordance with our complaint process. Within five
business days of the receipt of your complaint you will receive an acknowledgement of your complaint from the
Designated Complaints Officer with a description of next steps to be taken by RJOC as well as other information
such as a designated contact person, complaint reference number, the protocol you should follow once you have
sent your complaint to us and the timelines which we follow in order to process your complaint in a timely
manner. The entire process should take no longer than 90 days, at which point you will receive a substantive
response letter from the Designated Complaints officer, which will include the following information:
(i) A summary of your complaint
(ii) The results of our investigation
(iii) Our final decision on the complaint, including an explanation; and
(iv) A statement describing available options should you not be satisfied with our response
Step 3 – Other options available
If, following Step 2, your complaint has not been resolved to your satisfaction there are other options available to
you such as IIROC Enforcement, Ombudsman for Banking Services (“OBSI”), and Arbitration. OBSI will consider a
client complaint at the earlier of:
(i) the date the complaint substantive response is provided to the client; or
(ii) ninety (90) days after the receipt of the complaint.
RJOC & APPROVED PERSON CONFLICTS OF INTERESTS
RJOC will disclose to you existing and potential material conflict that cannot be avoided. See page 8 to page 12 of
this document under Conflicts of Interest and Statement of Policies for our procedures and disclosures regarding
our handling of conflicts of interest.
CONFLICTS OF INTEREST
Actual, potential and perceived conflicts of interest exist in almost all human interactions. Our relationship with
you is no different. For instance, RJOC is a “for profit” business and has a responsibility to maximize economic
returns for our shareholders. As well, RJOC has various other stakeholders, all of whom rely on RJOC to operate
profitably in order to honor the interests of those stakeholders as expected under the Canada Business
Corporations Act (“CBCA”) and pursuant to securities industry financial compliance regulations. We believe the
best way to achieve our goals is to provide you with trusted advice and personalized financial solutions that help
you achieve your financial goals. Our objective is to serve your trading (speculators) and risk management
(hedgers) goals, which is our best way to retain your continued patronage and, in turn encourage you to
recommend our services and products to others.
We have prepared these summaries as part of our commitment to conflict of interest management practices, and
also to help you better understand conflict issues that may arise. In addition to our objective to serve your
financial goals in alignment with our business interests, Canada has comprehensive and extensive securities
regulatory rules and regulations, many of which are directed at protecting client interests, including dealing with
conflicts of interest. We suggest that you refer to the websites and publications of the provincial securities
commissions through the Canadian Securities Administrators (“CSA”) and Investment Industry Regulatory
Organization of Canada (“IIROC”) for more information on how Canadian securities regulations address conflicts of
interest in order to safeguard the investing public.
Description of Member Firm
RJOC is what is referred to as a “Futures Commission Merchant”, more familiarly known as an “FCM”. Our client
accounts are held in our name, but in an omnibus arrangement with our sister FCM, R.J. O’Brien & Associates LLC
(RJOUS), except for Montreal Exchange (MX) positions which are booked directly to RJOC. Trades shown on your
client statements, regardless of account type, except for MX trades, are held by RJOUS in segregation from the
accounts of other brokerage firms. RJOUS executes, settles, and reports all your trade activity to you and provides
RJOC (and consequentially to you) with a contractual indemnity assuring you that the trades shown on your
statements are held by them as custodian. If, under any circumstance, any trade activity for your account is not
reported on a daily statement and/or your monthly statement, immediately report such omission to RJOC Head
Office Compliance since such an event is a violation of our operating policies and procedures. Conflicts of interest
may still arise despite the intentions of our strategic planning to limit them.
You can learn more about our firm at www.rjobrien.ca
The general types of conflicts of interest which can arise are:
- Conflicts of interest between you and us,
- Conflicts of interest between you and our other clients, and
- Conflicts of interest between us and our related and associated companies.
DESCRIPTION OF ROLE OF A FUTURES COMMISSION MERCHANT
As an FCM, our business model is to act solely as agent, we do not conduct principal trades (i.e.: where we take
the opposite side of your transaction and therefore deal in our own “inventory” of positions). We simply facilitate
transactions between you, as our client, and the exchange which acts as the other side of the transaction.
Through such an “agency” trade we have no ownership interest in the contract traded. This financial intermediary
role for our retail clients is RJOC’s sole line of business.
MANAGEMENT OF CONFLICTS OF INTEREST
In general, we deal with and manage relevant conflicts as follows:
- Avoidance: This includes avoiding conflicts that are prohibited by law as well as conflicts that cannot
effectively be addressed.
- Control: We manage acceptable conflicts through means such as physically separating different business
functions and restricting the internal exchange of information between these divisions and Advisors.
- Disclosure: By providing you with information about conflicts, you are able to assess independently their
significance when evaluating our recommendations and any actions you and we may agree to take.
The following 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. If you ever have any questions or concerns, whether they
involve conflicts of interest or any other matter, do not hesitate to say so and ask your Advisor for an
explanation and more information. If you are not satisfied with the response you receive, contact RJOC
Compliance at our Head Office.
POSSIBLE CONFLICTS AND HOW THEY ARE MANAGED
|Conflict of Interest||Address By||How Conflicts Will be Addressed|
|We earn compensation by
selling products and
services to you for which
you pay us.
|– We endeavour to be fully
transparent in disclosing fees and
commission, and to fully inform you
in advance when possible, so that
you know what you will be paying.
– Please refer to the Fee Schedule as
disclosed in your NAAF
|We would like you to use
more of the services
offered by an external
organization or group;
and/or buy more of the
products offered by an
external organization or
|– Where we use referral
arrangements, we disclose and
manage them according to
– We have policies & procedures,
against which we monitor our
advisors’ activities, prohibiting
recommendations solely for the
purpose of generating revenue for
us without any benefit to you.
|RJOC does not produce its
own research on
commodity futures or
futures options. RJOC
distributes research that is
produced by third parties.
|Control||– Industry regulations provide for
formal and required standards of
practice to produce and distribute
research. If RJOC begins to produce
its own commodities research, we
will comply with all regulations.
– IIROC regulations govern the
distribution of third-party research
and RJOC has written procedures to
address such requirements.
|Individuals may serve on
board of directors or take
on other activities that
could take time or
attention away from your
|Avoid||– Securities legislation prohibits an
individual from serving as a director
of another registered firm that is not
an affiliate of our firm.
– When an advisor or representative
sits on a board of directors of a
charity or undertakes other
community activities in any
substantive way, they are subject to
regulatory guidance on the
disclosure and approval of outside
In a multiple marketplace environment, certain types of orders may have specific handling implications. Unless otherwise specified, orders will be handled in accordance with the description provided in this document.
A Market Order is an order to buy or sell a security at whatever prices are available in a marketplace to help ensure a complete and full fill.
A Limit Order is an order for a security at a specific minimum sale price or a maximum purchase price set by the client. If a limit order is not immediately executable, these orders will remain in that market until the order is filled, cancelled or expired.
A Day Order instructs the receiving marketplace to automatically expire the order if it is not executed in the same trading day.
Good Till Cancel Order
Good Till Cancelled Orders (GTC) specify that the order remains active until the client cancels the order, or until the order exceeds its set duration and thus expires.
It is the client’s responsibility to ensure they know what the date of expiry will be and to contact their Advisor on or before the order’s expiry date should they want the order re-instated.