Relationship disclosure information form

Last updated May 2025

1. Relationship Disclosure Document

This Relationship Disclosure Information form (“RDI”) sets out important information about KV Capital Inc. (“KVC” or “we/us”) and about information that concerns our relationship with you, our client.

We will provide you with updates to the information in this document when required.

Please read this document carefully and retain it for future reference. If there are any questions or concerns with respect to the content and material provided herein, contact the Chief Compliance Officer of KVC at investor@kvcapital.ca or 780-433-1222.

2. About KV Capital Inc., and its affiliated investment entities

KVC is registered with the Alberta Securities Commission as an Exempt Market Dealer (“EMD”), Investment Fund Manager (“IFM”), and Restricted Portfolio Manager (restricted to advising in mortgages) (“RPM”); with the Ontario Securities Commission as an EMD and IFM; and with the BC Securities Commission and the Financial and Consumer Affairs Authority of Saskatchewan as an EMD.

3. Products and Services

As an EMD, KVC provides investment opportunities in certain exempt market securities to qualified investors. Exempt market securities (also referred to as “exempt securities”) are offered without the issuer having to file a prospectus or having the material reviewed by a securities regulator. Investors must qualify under specific exemptions in order to be eligible to purchase exempt securities. Exemptions may be based on an investor’s financial net worth or net assets, income, or other factors, such as province of residence.

The exempt securities that KVC deals are all proprietary products, and in particular are either: (1) securities in affiliated funds that it manages (the “Funds”), or (2) securities related to certain mortgages financed, directly or indirectly, by KVC (the “Mortgage Interests”).

The founders and principals of KVC may be significant investors in the Funds or any Mortgage Interest.

5. Liquidity of Investments

KVC’s proprietary products do not offer the same liquidity that would be available through securities that transaction in the public financial markets. It is important that you fully appreciate the illiquid nature of any Funds or Mortgage Interests, which is further described in the offering materials related to each investment.

6. Exempt Market Dealer

KVC generally acts as an EMD only to allow investors to invest in Funds or Mortgage Interests. As a result, KVC generally does not have the facilities to directly offer any form of registered accounts. Where an investment is eligible for registered accounts, investors may hold such investment(s) in registered accounts through a trustee authorized by KVC. KVC does not maintain any form of discretionary cash accounts on behalf of investors. Assuming all required pre-subscription conditions have been satisfied, all funds received for investment in a Fund, or a Mortgage Investment are released to that Fund or utilized in connection with the related mortgage in exchange for the issuance of the security to that investor.

KVC distributes exempt securities through registered dealing representatives (“DR”). KVC’s DRs will discuss the exemptions, applicable individual investment limits and assess whether you qualify to invest in exempt securities before you can make a purchase.

All EMD accounts with KVC are “non-discretionary”, which means a DR cannot execute any transactions other than with your express written instruction via subscription agreements or similar documents.

7. Know Your Client and Suitability Determination

When you open your account with us, we are generally required by securities laws to take reasonable steps to: (1) establish your identity, (2) establish whether you are an insider of a publicly traded company or reporting issuer, and (3) ensure that we have sufficient information regarding your investment needs and objectives, personal and financial circumstances, risk profile and risk tolerance, investment time horizon, and investment knowledge. For clients that are not individuals, information concerning the nature of a prospective client’s business, control structure and specified beneficial ownership is also collected. This information is collected to enable us to meet our obligations under applicable securities laws to ensure that the purchase or sale of a security or any other investment action we take or recommend is suitable for you and puts your interests first before we execute a transaction on your behalf. Information is collected from you in a Know Your Client (“KYC”) form prior to your investment in Fund or a Mortgage Interest. We encourage you to provide full and accurate KYC information, as we will rely on it for determining suitability. If you qualify as a “Permitted Client” for the purposes of securities law, you can waive the suitability assessment. If your proposed investment does not appear to be suitable, we will caution you about it and may either reject the purchase or require your written acknowledgment that we have advised you why the trade is unsuitable, before proceeding with the investment.

KVC has an ongoing obligation to make reasonable efforts to keep the KYC information current. KVC will review with you and update your KYC information, if required, for each subsequent purchase you make. When making a trade for, or recommending a trade to, you, a new KYC form will be required if the KYC form we have on file for you was completed more than twelve (12) months earlier or if there has been a material change in your information such as a change in your investment objectives, financial circumstances, risk profile, marital status, employment status or other circumstances. It is important for you to keep your information current with KVC. We encourage you to contact us if any of your information has changed.

8. Fees and Charges

The fees and charges paid to KVC in connection with your investment will depend on the Fund you are investing in, and the terms and conditions of the particular Mortgage Investment. A summary of the common types of fees paid to KVC are outlined below, but reference should be made to the offering materials related to a particular investment.

Fees paid to KVC by KV Mortgage Fund Inc. (“KVMF”):

Management fees:

In consideration for the provision of management and administration services, KVMF pays KVC a management fee, which is calculated as follows: (i) on a monthly basis, 0.083% of the total assets of KVMF (the “Base Fee”); and (ii) on an annual basis, 20% of any portion of KVMF’s net income that exceeds the level of net income required to provide KVMF with an Internal Rate of Return (“IRR”) equal to the average of the 2 year Government of Canada benchmark bond yield (series V122538), plus 450 basis points (the “Performance Fee”). For calculating the Base Fee, a simple average of KVMF’s opening and closing total assets is calculated using the un-audited monthly statements of financial position. Base Fees include applicable taxes, and are disbursed to KVC on a monthly basis. The Performance Fee is calculated using KVMF’s annual audited statement of comprehensive income, including the Base Fee as an expense in such calculation. Performance Fees include applicable taxes, and are disbursed to KVC on an annual basis.

In the event all of the real estate security of an investment by KVMF has been monetized and the nominal aggregate cash flows of such investment to KVMF are negative, KVC will pay to KVMF a reimbursement (the “Reimbursement”) that is calculated as the lesser of: i) the amount required to bring KVMF’s nominal aggregate cash flows of such investment to zero; and ii) two times that portion of the associated fees paid to KVC by the applicable borrower in respect of such investment by KVMF. Any amounts recovered from such an investment on which KVMF has received payment of a Reimbursement will first be paid to KVMF until such time as its nominal aggregate cash flows, calculated inclusive of the Reimbursement, are zero, then paid to KVC in an amount equal to the Reimbursement, with any residual amounts paid to KVMF.

Trailing commission:

KVC receives a trailing commission of 1% annually for each trade of KVMF Preferred Shares that KVC deals on behalf of KVMF.

For more information on fees charged by KVC to KVMF, please refer to the most recent offering memorandum of KVMF.

Fees earned on Mortgage Interests:

With respect to a mortgage interest, KVC may earn a mortgage administration fee equal to the difference between the interest that the borrower pays and the interest that the investor receives.

Fees earned from borrower clients:

KVC earns fees directly from its borrower clients, which may relate to mortgages funded by KVMF and/or funded through Mortgage Interests. These fees may include: (1) broker and/or lender fees charged at the time of funding a mortgage, (2) commitment fees collected at the time of underwriting a mortgage, (3) renewal fees charged at the time of a mortgage renewal, and/or (4) other fees from time to time, such as non-sufficient funds (NSF) fees and other fees to applicable borrowers with respect to mortgage loan transactions.

To clarify, KVC in its capacity as a mortgage brokerage does not earn any fees, commissions or other charges from KVMF or other Funds. KVC in its capacity as a mortgage brokerage is paid a fee by its borrower clients upon successfully obtaining mortgage financing for the applicable borrower client.

Fees earned from other Funds:

KVC, in its capacity as fund manager of any Fund, typically earns management and fees for the management and administration of such entities, pursuant to the applicable management agreements. It also may also earn performance fees based on the performance of those Funds, as set out and described in the Fund offering documents.

Fees earned from investee entities of other Funds:

KVC may receive such a fee from one of the investee entity made by one of its private equity Funds. KVC’s ability to retain such a fee will be set out and described in the applicable Fund’s offering documents.

Fees paid to others:

In respect of securities that are held by clients in a registered account (i.e. RRSP, TFSA, RIF, RESP or LIRA), the trustee for the account may charge fees, such as an annual fees, account closing and processing fees. These differ by trustee, and will be itemized on the trustee’s fee schedule. These trustee fees are charged and retained by the trustee and are not shared with KVC as the EMD. Please speak with the trustee handling your account if you have any questions about such charges.

9. Investment Risk

When making an investment decision, it is important to be aware of the risks associated with investing in any Fund or Mortgage Interest. Investment products sold in the prospectus-exempt market are only suitable for investors who are qualified to purchase the securities, and who have the ability and willingness to accept the risks associated with exempt securities. It is important to understand that neither KVC nor its management make any guarantees as to the return that KVC products can provide or the security of your capital in those investments.

The following is a general summary of the risks you should consider before making an investment decision. Please note that this list is not exhaustive and is provided to give you an indication of general risk factors that can affect the value of your investment. For a list of more detailed and specific risk factors related to any investment in a Fund or a Mortgage Interest you should refer to the offering materials related to such investment.

The types of risks that you should consider when deciding to purchase an exempt security include:

Liquidity Risk – All of the exempt securities that KVC deals to you will be illiquid investments for which no public market may ever exist, and which may not be transferrable, tradeable, or saleable. This means you may lose all of the capital you invest in any Fund or Mortgage Interest.
Redemption Restrictions – All of the exempt securities that KVC deals will be unredeemable, or, if redeemable, will be subject to material redemption restrictions. This means you may lose all of the capital you invest in any Fund or Mortgage Interest.

Insurance Risk – KVC’s products are not insured against loss through the Canada Deposit Insurance Corporation. Further, the securities offered by KVC are not eligible for mortgage default insurance and, as such, do not carry any form of mortgage default insurance coverage and hence a loss of principal is possible.
Market Risk – Real estate markets and business cycles will fluctuate based on a variety of factors including general economic and market conditions, interest rates, commodity prices, political and geopolitical developments, investor sentiment and borrower specific changes. These fluctuations may impact the value of the Funds and any Mortgage Interests.
Leverage Risk – KVC’s investment strategy allows for the capacity to use a combination of capital and debt (i.e. bank financing) to purchase mortgage assets or Fund investments. This would be done in order to achieve a higher rate of return or to assist in managing cash flows for any Funds. This leveraging strategy may decrease returns if the interest rate charged on the bank financing ever exceeds the net yield of the applicable Fund. Furthermore, leverage increases risk to capital as loss of principal on investments made with borrowed funds must be paid out of the Fund’s equity.

No Guarantees – There is no guaranteed payment of any distributions from any Fund or in respect of any Mortgage Interest.

Reliance on Management – As all of the products dealt to you by KVC are proprietary products of KVC, the performance of each investment will depend on, and be impacted by, the skill, judgment, and good faith of KVC (the manager of an investment).

The risks outlined above, and those outlined in any offering materials related to a Fund or a Mortgage Interest, or other yet unidentified risks, may have a material adverse effect on the performance of such securities, the return to the investors, and all the invested capital related to such securities.

10. Borrowing to Invest

Using borrowed money to finance the purchase of a security involves greater risk than using only cash resources. If you borrow money to purchase securities, your responsibility to repay that loan and any interest as required by its terms remains the same, even if there is an interruption or decline in the income from the investment you made and/or the value of the security purchased.

KVC discourages borrowing of money to fund participation in any investment and has neither arranged for nor recommended that you borrow money in order to invest in any investment opportunity offered by KVC. KVC bears no responsibility or liability whatsoever for borrowing arrangements that you may have made.

11. Conflicts of Interest

Under securities regulations in Canada, KVC is required to take reasonable steps to identify and address all existing and reasonably foreseeable material conflicts of interest between KVC (including each individual acting on KVC’s behalf) and its clients. KVC must address all such material conflicts of interest in the best interest of the client.

A conflict of interest may arise in circumstances where:

our interests or those of our representatives and your interests as our client may be inconsistent or divergent;
we or our representatives may be influenced to put their interests ahead of yours; or
monetary or non-monetary benefits available to us, or potential negative consequences for us, may compromise the trust that you have in us.

Conflicts of interest are deemed to be material if the conflict may be reasonably expected to affect the decisions of the client and/or the recommendations or decisions of KVC or its DRs in the circumstances.

We and our representatives must address all material conflicts of interest in your best interest. KVC has a general duty to deal fairly, honestly and in good faith with its clients. Actual, potential and perceived conflicts of interest may exist, and we will manage these conflicts by:

disclosure of the material conflict of interest to the client, implementation of controls, and, if applicable, supervision to ensure that the party with the conflict acts in the client’s best interests; or
refraining from conducting the business that results in the material conflict of interest.

We have adopted policies and procedures to assist us in identifying and controlling any conflicts of interest that we and our representatives may face.

Existing and reasonably foreseeable material conflicts of interest and the controls we use to address these conflicts include the following:

Existing and Reasonably Foreseeable Material Conflict of Interest	Controls
KVC only deals proprietary products
As an exempt market dealer, the investment opportunities available through us are limited to products that are, directly or indirectly, managed by us (referred to as “proprietary products”). In particular, the only investment opportunities available through us are securities in Funds we manage or Mortgage Interests in mortgage loans that we structure. For clarity, we generally serve as the manager or administrator of each Fund and Mortgage Interest. KVC does receive trailing commissions in respect of sales of shares in the capital of KVMF. Otherwise, unless disclosed to you, KVC does not receive any compensation from its clients or from the Funds in connection with the distribution of securities of the Funds as exempt market dealer; however, KVC does earn fees from its ongoing management of the Funds. KVC may, directly or indirectly, receive distributions based on profits of the applicable Fund, and frequently receives fees directly from persons that receive funds or capital from the Funds or Mortgage Interests (in particular, borrowers of loans funded by KVC and investee entities invested into by private equity Funds). This structure creates a conflict of interest because KVC is only providing its clients with access to its proprietary products and is not providing its clients with access to a wider universe of investment funds, products, and other collective investment vehicles managed by third-party fund managers. Further, the suitability determination conducted by KVC will not consider the larger market of non-proprietary products or whether those non-proprietary products would be better, worse or equal in meeting its client’s investment needs and objectives. Lastly, a further potential conflict is that we could be perceived to be providing access to proprietary products, or making investment recommendations to our clients or Funds, only because KVC or an affiliate receives management and/or advisory fees and/or other compensation related to those products or investment decisions.	To manage the conflicts inherent in making investment recommendations or taking investment actions for its clients in proprietary products only, KVC will only permit you to be invested in a proprietary product if: (1) KVC considers such securities to be suitable for you and that investing in such securities puts your interest first; (2) in the event we believe the investment is unsuitable but you would like to proceed with such investment, you execute a trade waiver confirming that KVC does not think a proprietary product is suitable for you; or (3) KVC is not required by applicable law to determine whether a particular trade is suitable for you. We are transparent in disclosing to you that only offer proprietary products. We are also transparent in disclosing to you the compensation we may earn from these products. Furthermore, all products are established with investment advisory mechanisms that are, in KVC’s view, market and standard for a particular product; each advisory mechanism is consulted in connection with any investment decision, as required by the protocols and policies of the particular product.
General investment opportunity allocation
KVC generally allocates investment opportunities among KVC, its principals and affiliates, its investor clients, and its Funds. KVMF, in particular, either fully funds mortgage investments or participates as an investor in a syndicated mortgage offered by KVC. Because KVMF receives priority in viewing investment opportunities, its principals and affiliates and its syndicated mortgage investor clients may be disadvantaged under this approach. If not addressed, your investment in any particular product could be disadvantaged by investment opportunities being provided to another person, including KVC, its principals, its other clients, or other Funds.	To mitigate this risk, KVC has adopted an investment allocation policy: in respect of mortgage investment opportunities, KVC will present an investment opportunity to KVMF first, then to its syndicated mortgage investors, then to KVC itself and then last to KVC’s principals and affiliates. In respect of other types of investment opportunities, the terms and conditions of each Fund require that any investment opportunity suitable for the Fund be presented to the Fund. To the extent any client investors invest in the same opportunity as a Fund, such co-investment is disclosed to the appropriate governance bodies of such Fund.
Different Types of Interests in Funds
Certain Funds may have multiple types of interests, units, or shares in their capital that each have different features, rights, priorities, and/or fees associated with them (including, in particular, different redemption penalties). Where Funds have more than one type of interest, unit, or share, KVC will be able to deal all those securities to potential investors. This creates a material conflict of interest if those types of features (including the amount of fees KVC earns in respect of such security) put KVC in a better position if persons purchase one type of security and not the other. If not addressed, you may be disadvantaged by KVC recommending a security to you that advantages KVC but isn’t necessarily better from your perspective.	To address this material conflict of interest, KVC ensures that its clients are aware of minimum subscription requirements for any class of interest, unit, or share in any of its Funds, as well as all the features (and differences) between such interests, units, or shares (including any differences in fees earned by KVC or in the redeemability of any security). Furthermore, all trades must be approved directly or indirectly by the Chief Compliance Officer.
Outside business activities
Some of KVC’s directors, officers, employees, and registered representatives are engaged in other business activities outside of their duties with KVC, which may include being a director, officer, or employee of a related entity of KVC (including a Fund). A potential conflict can arise from an individual engaging in such activities as a result of compensation received, the time commitment required, or the position held by the representative in respect of these outside activities. The potential impact and risks to you are that these outside business activities may call into question the representative’s ability to carry out their responsibilities to you or properly provide service to you, there may be confusion which entity(ies) the representative is acting for when providing you with services and/or the outside activity places the representative in a position of power or influence over you.	We address this conflict by requiring all directors, officers, employees, and representatives to disclose any proposed outside activities to us prior to engaging in such activities. Our Chief Compliance Officer must approve the outside activity before an individual can engage in such activity. We will not allow a director, officer, employee or representative to proceed with an outside activity if we determine that the outside activity will interfere with the proper discharge of the individual’s duties to KVC and our clients or will otherwise give rise to a material conflict of interest that cannot be addressed in our clients’ best interest. It is also a requirement that our dealing representatives must always ensure that they make it clear when they are acting on our behalf and when they are acting in any other capacity or on behalf of any other person.
Principal Investment
KVC, its directors, officers, and other employees are (directly or indirectly) investors in Funds and may also be investors in a particular Mortgage Interest. As a result, a reasonably foreseeable material conflict of interest arises because such participation in investments may impact KVC’s decisions or recommendations, to the prejudice of its clients, including where certain Funds may have redemption features.	KVC has mitigated this reasonably foreseeable conflict of interest by adopting policies that: determine how investment opportunities are to be allocated (see above); ensure that its such positions are either equal in priority, or subordinate to, the position of a Fund; and ensure that investors in a Fund are aware of a the position taken by KVC, its directors, officers, and other employees in that Fund. Furthermore, each proprietary product is designed with a conflict resolution mechanism to assist in decision-making in respect of that product where the participation of KVC, its directors, officers, and other employees, prevent its ability to make an unbiased decision.
Gifts and Entertainment
The receipt of gifts or entertainment from business partners may result in a perceived conflict as it gives rise to the perception that our representatives will favour such business partners when making investment decisions.	To manage this perceived conflict of interest, KVC has adopted a gifts and entertainment policy, which prohibits our representatives from accepting gifts or entertainment beyond what we consider consistent with reasonable business practice and applicable laws.
Referral Arrangements
KVC may from time-to-time, in its sole discretion, enter into referral arrangements whereby it pays or provides a fee or other benefit for the referral of a client to KVC or to one of the funds it manages. Referral arrangements may be entered into both with other registrants and with non-registrants. This can create a conflict between the person to whom the referral is made and the person making the referral, as the person making the referral is incented to do so by the promise of receiving compensation even where the investment is not necessarily in the best interest of the person making the investment.	In all cases, the referral arrangement will be set out in a written agreement which will be entered into in advance of any referrals being made. Details of how the referral fee is calculated and paid and to whom it is paid and other required information regarding each referral arrangement will be provided to affected clients as required. KVC also has policies and procedures that are designed to ensure that any fees and other benefits received or paid or provided, as applicable, in connection with referral arrangements are appropriate and do not provide inappropriate incentives, and that any referral by us is in the client’s best interest. We will undertake periodic reviews of any existing referral arrangements. Clients will not pay any additional charges and fees in connection with referrals and will not be obligated to purchase any product or service in connection with a referral.
Investee Entity Interaction
KVC, in its capacity as a manager of a Fund, may find itself in a material conflict of interest where a person who has received capital from a Fund or in connection with a Mortgage Interest (either a portfolio company or a borrower) deals with a different person who has received capital from a Fund or in connection with a Mortgage Interest. In certain circumstances, KVC could be required to decide, or at least influence, the outcome of a dispute between different people who have received capital managed by KVC and thereby be required to prioritize one group of investors over another.	This material conflict of interest has been mitigated in two key ways: (1) investee entities of a Fund can only deal with other entities or investments that are managed by KVC, directly or indirectly, on arm’s length terms, and (2) KVC has developed policies and procedures that require it to disclose such occurrences to appropriate conflict resolution bodies, or otherwise rely on appropriate conflict resolution mechanisms where investments it manages are in such conflict.
Internal Compensation and Incentive Practices
In some cases, KVC employees are paid a commission when clients acquire interests in its products. If this conflict is left unaddressed, a representative of KVC could be incentivized to sell a product because of the commission (or other compensation) it receives and not because the trade puts the client’s interests first.	KVC’s compensation programs are designed to be product agnostic. Our registered representatives are not compensated differently based on which products or services they sell, nor is the variable portion of their compensation determined by such factors. Furthermore, all trades must be approved directly or indirectly by the Chief Compliance Officer and not solely by the representative that earns the commission from such trade.
Marketing Practices
Marketing materials are used in various forums to advertise KVC’s products and services. Marketing can create a conflict of interest as there may be an incentive to overstate attributes and to understate risks and weaknesses.	All marketing materials are reviewed directly or indirectly by the Chief Compliance Officer and approved prior to distribution. Marketing policies are in place governing the preparation and dissemination of marketing materials, including prohibiting material misstatements or omissions, including required disclosures.
Complaint Handling
Addressing a complaint by a client can create a potential conflict if KVC has a choice between addressing the complaint in a manner that is beneficial to KVC or addressing the complaint in the best interests of the client. The potential risk to you is that we act in our own business interests.	To control this potential conflict, KVC has a client complaints handling policy that applies to its activities as an exempt market dealer. This policy is described in Section 17 below.
Funds are Related or Connected to KVC:
KVC and/or its controlling shareholders, directly or indirectly, through ownership of shares or by way of contract, controls each Fund. It’s directors, officers, and employees are directors and/or officers of the Funds, including the general partner of any Fund structured as a limited partnership. KVC and the Funds each share office space and administrative resources. These relationships means that directors, officers, and employees of KVC (including its DRs) may have conflicting duties that may be owed to one or more person which could potentially bias the actions or inactions KVC takes with respect to its clients.	KVC addresses this conflict by having policies regarding trade suitability, director’s and management’s outside activities, adherence to regulatory requirements that apply to KVC and its Funds, and establishing independent governance mechanisms for each Fund (in accordance with the offering materials of each applicable Fund).

This disclosure may change from time to time, for example, if we later consider we have another material conflict that we have not previously disclosed to you or change how we address a conflict in your best interest. Any significant changes to this document will be communicated to you from time to time.

12. Client Assets

From time-to-time KVC holds and has access to client assets. In the case of investments into a Fund, the subscribing investor will deliver investment proceeds to trust accounts of the applicable issuer which accounts are managed by employees of KVC or its affiliates. These funds are held in these segregated trust accounts on behalf of the investor until accepted by the issuer for investment into such issuer. These funds are not co-mingled with assets of KVC. KVC does not accept cash. All cheques must be payable to a trust account or the applicable Fund and cannot be made payable to KVC or a dealing representative.

In the case of investments into Mortgage Interests provided by KVC, KVC will receive subscription proceeds from the investor-lender which are then held in segregated trust accounts of KVC on behalf of such investor-lender until the loan is funded and the investment closes. Loan distributions and proceeds are similarly collected from the applicable borrower and held in such segregated trust accounts on behalf of the investor-lender until distributed. Any funds received by, on behalf of, or for the benefit of an investor-lender of KVC are not co-mingled with assets of KVC. KVC will then hold title to the investor-lenders syndicated loan interest in trust for such lender and pursuant to the terms and conditions of any applicable mortgage servicing agreement and trust declaration.

Any client assets held by KVC or which KVC has access to are subject to risk of loss. To mitigate this risk, KVC has reviewed the system of controls and supervision that it maintains and has concluded that its system is sufficient to manage the risk to a client of loss in accordance with prudent business practice.

13. Reporting

A description of the reporting we provide to our clients is set out below.

Where we have acted on your behalf in connection with a purchase or sale of a security, we will promptly deliver to you a written confirmation of the trade in the form of letter and/or an account statement. A trade confirmation delivered to you will include certain transaction information such as the quantity and description of the security purchased or sold, the price paid or received by you, sales charge, or any other amount charged, the name of the dealing representative and the settlement date of the transaction.

KVC provides quarterly account statements in accordance with the obligations set forth under securities law, including but not limited to those obligations set out in NI 31-103. On an annual basis, where required by law, a “Report on Charges and Other Compensation” and an “Investment Performance Report” will be delivered to investors.

Monthly account statements are available to investors upon request. The monthly account statements include the portfolio balance and any interest earned that month along with any contributions or redemptions.

The content of the quarterly reports (and, if requested by an investor, monthly reports) is prescribed by securities law and includes:

the name and quantity of each security in the account;
the market value of each security in the account;
total market value of each security position in the account;
any cash balance in the account;
the total market value of all cash and securities in the account;
that the account is not eligible for coverage under an investor protection fund; and
which securities in the account might be subject to a deferred sales charge if they are sold.

In addition to the foregoing, if an investor has invested in an issuer during the preceding 3 month period then the statements will include:

the date of the transaction;
whether the transaction was a purchase, sale or transfer;
the name of the security;
the number of securities purchased, sold or transferred;
the price per security if the transaction was a purchase or sale; and
the total value of the transaction if it was a purchase or sale.

KVC does not employ the use of performance benchmarks as it does not believe there are relevant and reliable performance benchmarks available.

Certain Fund’s may also deliver audited and or unaudited financial statements to investors of those Funds from time to time, in accordance with the terms and conditions of the offering materials related to those Funds.

14. Investor Responsibilities

It is important that you actively participate in our relationship with you as your exempt market dealer. In particular, you are responsible for the following:

• Keeping us fully and accurately informed regarding your personal circumstances, and promptly advising us of any change to information that could reasonably result in a change to the types of investments appropriate for you, such as a change to your (i) personal circumstances; (ii) financial circumstances, such as income and net worth; (iii) investment needs and objectives; (iv) risk profile, including risk tolerance; and (v) time horizon.

• Reviewing the documentation and other information we provide to you regarding your account, transactions conducted in your account and the holdings in your portfolio.

• Asking questions of and requesting information from us to address any questions you have about your account, transactions conducted in your account or the holdings in your portfolio, or your relationship with us or anyone acting on our behalf.

Providing us with this information is important as when we are acting as your dealer, we have an obligation to assess whether a purchase or sale of a security is suitable for you prior to executing the transaction or at any other time.

15. Privacy Policy

Preserving trust is a core value. We recognize our responsibility to adopt reasonable policies and procedures designed to protect the information of our clients and investors. We fully accept and are committed to fulfilling the trust that is the foundation of our ongoing business relationships. In addition to our client focused corporate culture, we have also formally adopted and adhere to the following policy regarding the privacy of our client’s and investor’s nonpublic personal information and personally identifiable information (collectively, “Nonpublic Personal Information”).

Information that we collect

We ask our clients for no more Nonpublic Personal Information than necessary. However, in connection with an investment in one or more of KVC’s offerings, we collect, maintain and may disclose Nonpublic Personal Information about investors to meet legal or regulatory requirements, for year-end tax preparation purposes, and for any other purpose to which you may consent in the future. A non-exhaustive list of the type of Nonpublic Personal Information we may collect is:

name, birthdate, social insurance number, address, email address, phone number and other contact information;
information about personal financial situations and business dealings;
employment or occupation, salary, and asset holdings and values;
investment knowledge and objectives;
spouse’s name and occupation, and children’s and dependents’ names and ages; and
banking information, and other financial and tax information.

How we collect Information

We collect Nonpublic Personal Information through a variety of sources including but not limited to:

clients/investors directly on new account forms, fact finding questionnaires, product and service applications, and other forms;
clients/investors directly through written, electronic or verbal correspondence when contacted about our products and services;
consumer reporting agencies; and
other individuals or entities that you authorize us to obtain information from, such as an attorney or accountant.

We only collect Nonpublic Personal Information after having received your consent.

Information that we disclose

As permitted by law and as outlined in this policy, we disclose Nonpublic Personal Information to unaffiliated third parties that provide services to us or with whom we have a contractual relationship or where we have a legislated requirement in order that we may effectively and efficiently carry out your directions and service your account.

Examples of third parties with whom we may share your Nonpublic Personal information include:

Product sponsors in order to generate proposals, reflect available services, execute transactions and otherwise service an account;
Companies providing account performance and/or reporting services on an account;
Third party asset managers with whom we have a relationship;
Banks and other financial institutions;
Provincial, Federal and other regulatory or self-regulatory authorities, or under a subpoena for release of information, as required by law or regulation;
Other companies, associations, agencies, third parties and institutions that provide services to us; and
Those companies, associations, agencies, third parties and institutions with which we or our representatives are licensees, registrants or members.

Steps we take to protect your information

We have developed security policies and procedures, and adopted technology reasonably designed to prevent unauthorized use or access to your Nonpublic Personal Information. Within KVC, Nonpublic Personal Information is available to employees only on a “need to know” basis, such as for various business purposes such as servicing transactions, fulfilling compliance, legal and audit functions.

Amendments to our privacy policy

From time to time, and in accordance with our internal review of corporate policies, amendments to our privacy policy may be made, in our sole discretion and without notice to you. As material amendments to this policy are adopted we will post appropriate notice on our website.

16. Independent advice

Prospective investors may wish to consult with their own independent professional legal, tax, investment, and financial advisor before investing in products offered by KVC to determine the appropriateness of the investment in relation to their financial and investment objectives and in relation to the tax consequences of any such investment.

17. Complaint handling

We do all we can to ensure that your business is managed in an effective, timely, accurate, and courteous manner. If we do not meet the high standards that we set for ourselves, we want you to tell us.

If you have a complaint, please contact us at:

1-780-433-1222 or investor@kvcapital.ca; or

KV Capital Inc. Attention: Chief Compliance Officer

#101, 1290 – 91 Street SW, Edmonton, Alberta T6X 0P2

If your complaint cannot be easily resolved, you will be asked to put the complaint in writing so it can be thoroughly investigated. Within five (5) business days of receiving your written compliant, we will acknowledge receipt of your complaint in writing and may request more information to help us resolve your complaint. We have up to 90 calendar days to review, analyze and assess your complaint. Upon completion of our review, we will provide you with a full response to your complaint.

If you are not satisfied with our response, you may be eligible for a free and independent dispute resolution service offered by the Ombudsman for Banking Services and Investments (OBSI). KVC is required to maintain membership in OBSI. You can contact OBSI by email at ombudsman@obsi.ca. or by telephone 1-888-451-4519.

In order to take advantage of OBSI’s free services, your complaint must fulfill the certain requirements, including:

the complaint must relate to trading services of KVC or one of its dealing representatives,
the complaint must be brought to KVC’s attention within six years from the time that you first knew, or ought to have known, about the event that caused the complaint, and
your claim against KVC must be under $350,000.

OBSI will conduct its own independent investigation and provide its recommendations to you and to KVC. Please note that OBSI’s recommendations are not binding on you or KVC. You can find more information at www.obsi.ca.

You do not have to use OBSI as your dispute resolution provider. At your own expense you may choose another dispute resolution provider such as an arbitrator, or you may pursue legal action to resolve your complaint. You may do this if your complaint does not fit within OBSI’s criteria.

If you have any questions regarding this complaint procedure, please contact the Chief Compliance Officer of KVC at nicholas.jeanes@kvcapital.ca or 780-433-1222.