MARKET CONDUCT REQUIREMENTS AND RISK DISCLOSURE
Digital Technology Inc. (SDT)’s commitment to fostering an environment
of transparency, trust and fairness is fundamental to our success. In support
of this commitment, SDT has developed these rules for all clients that want to
trade crypto assets (Crypto) on our online platform (the CoinSmart
Platform). These rules are incorporated by reference into the CoinSmart
Terms of Service (the CoinSmart TOS) which govern all accounts of
clients (Client Accounts) on the CoinSmart Platform. Capitalized terms
used and not defined in these rules have the meanings given to them in the
hours are 24 hours a day, seven days a week.
the CoinSmart Platform is down for scheduled maintenance and Participants are
notified well in advance.
CoinSmart Platform may be accessed by the following participants (Participants):
who have an active account with SDT; and
SDT, in its capacity as a passive liquidity provider (SDT LP).
Termination and/or Suspension of Access
the CoinSmart Platform may be terminated or suspended for a client whose
account is terminated or suspended by SDT in accordance with the CoinSmart TOS.
ORDERS, MATCHING AND TRADES
Entry of Orders
order to purchase or sell a Crypto shall be entered at a fiat price that
includes a fraction or a part of a cent other than an increment of one-half of
one cent. Orders for Crypto may be entered at an amount that includes up to
eight decimal places.
must specify the maximum purchase price the buyer is willing to pay for the
must specify the minimum price at which the seller is willing to sell the
orders must specify a trigger price at which time the order becomes a Limit
orders must specify a trigger price at which time the order becomes a Market
orders are executed at the best available price at the time the order is
order entered by a client, or any unfilled portion of a client’s order, which
would upon entry, interacting with a resting order from the same client
account, will be automatically rejected by the CoinSmart Platform.
Unfilled and Partial Filled Orders
market order that is unfilled upon entry will be cancelled. The unfilled
portion of a market order that is partially filled upon entry will be
unfilled portion of the limit order that is partially filled upon entry will
remain open and filled once the limit price is met or cancelled by the client.
Liability for Bids, Offers and Trades
and offers for Crypto made and accepted on the CoinSmart Platform shall be
binding on the buyer and the seller.
to Section 3.3.2, orders of buyers and sellers will be matched based on strict
price-time priority in the CoinSmart Platform’s centralized limit order book.
Until SDT becomes regulated as a marketplace under Canadian
securities laws, all orders entered by clients will only match with orders of
Variation and Cancellation of Orders
reserves the right at all times to refuse to process or to cancel any order for
a Crypto transaction entered by a client prior to execution, for the following
prevent reputational risks associated with the transaction or with the client;
enforce any limits associated with the client’s account;
connection with SDT’s obligations under AML Regulation (defined below); and
safety, security and fraud prevention purposes;
SDT may refuse to process or cancel an order for a Crypto
transaction entered by SDT LP in the following circumstances:
correct an error caused by a system or technological malfunction of the
CoinSmart Platform’s systems or equipment or caused by an individual acting on
behalf of the CoinSmart Platform;
instances where SDT halting all trading on the CoinSmart Platform, as discussed
in Section 5; or
required by applicable law, including compliance with AML Regulation, any court
order, or the request of any governmental authority.
SDT does not permit for the variation of an order for a Crypto
transaction on the CoinSmart Platform. Rather, instances where a Participant
would like to vary an order will result in the existing order being cancelled
and replaced with a new order. This new order will not have the prior order’s
priority in the CoinSmart Platform’s central limit order book.
Order and Trading Limits
daily, monthly and annual limits on trading by each client for each Crypto on
the CoinSmart Platform. Limits apply to all Crypto pairs available for trading
on the CoinSmart Platform and are applied at the time of order entry.
Additional limits are set in respect of price slippage and index variance.
Price slippage and index variance controls apply to both market orders and
marketable limit orders. In the event that a limit is hit, the remainder or any
unfilled order (limit order or market order) will not be filled and an error
message will be displayed. Details of the limits for each Crypto can be viewed at the following
trading limits are applied, affected clients continue to be permitted to enter
sell orders for the purpose of liquidating positions. Limits are re-set on a
rolling daily, monthly or annual period.
limits do not apply to SDT LP.
Variation and Correction of Trades
executed on the CoinSmart Platform shall, subsequent to the execution of the
trade, be cancelled, varied, or corrected with respect to the price of the
trade, the volume of the trade, or the date for settlement of the trade, except
if the variation, cancellation or correction would be necessary to:
correct an error caused by a system or technological malfunction
of the CoinSmart Platform’s systems or equipment or caused by an individual
acting on behalf of the CoinSmart Platform; or
if required by applicable law, including compliance with AML
Regulation, any court order, or the request of any governmental authority.
are prohibited from engaging in activities that create artificial pricing. A
bid price or sale price will be considered artificial if it is not justified by
real demand or supply in a Crypto. Whether
or not a particular price is “artificial” depends on the particular
circumstances. Some of the relevant considerations in determining whether a
price is artificial are:
prices of the preceding trades and succeeding trades;
change in the last sale price, best ask price or best bid price that results
from the entry of the order;
recent liquidity of the Crypto;
time the order is entered and any instructions relevant to the time of entry of
the order; and
any Participant involved in the order: (i) has any motivation to establish an
artificial price, or (ii) represents substantially all of the orders entered or
executed for the purchase or sale of that Crypto (other than SDT LP, in cases
where there are very few client orders for the Crypto).
of any one or more of these considerations is not determinative that a price is
or is not artificial.
Manipulative and Deceptive Activities
Participant shall not, directly or indirectly, engage in or participate in the
use of any manipulative or deceptive method, act or practice in connection with
any order or trade.
Participant shall not, directly or indirectly, enter an order or execute a
trade if the Participant knows, or ought reasonably to know, that the entry of
the order or the execution of the trade will create or could reasonably be
expected to create:
a false or misleading appearance of trading activity in or
interest in the purchase or sale of the Crypto; or
an artificial ask price, bid price or sale price for the Crypto or
a related Crypto.
There are a
number of activities which, by their very nature, will be considered to be a
manipulative or deceptive method, act or practice. This includes, without
making a fictitious trade;
effecting a trade in a Crypto which involves no change in the
beneficial or economic ownership (e.g., wash trading);
entering an order for the purchase or sale of a Crypto with the
knowledge that an of substantially the same size, at substantially the same
time and at substantially the same price for the sale or purchase of that
Crypto, has been or will be entered by or for the same or different persons;
making purchases of, or offers to purchase, a Crypto at
successively higher prices or in a pattern generally of successively higher
making sales of or offers to sell a Crypto at successively lower
prices or in a pattern generally of successively lower prices; and
entering an order or a series of orders for a Crypto that are not
intended to be executed.
Orders and Trades
Participant shall not enter an order on the CoinSmart Platform or execute a
trade if the knows or ought reasonably to know that that the entry of the order
or the execution of the trade would not comply with or would result in the
violation of applicable securities legislation, including trading that mimics
securities law prohibitions against illegal insider trading, tipping,
recommending, or frontrunning. If a Participant uses a nominee to trade for the
benefit of a Participant that otherwise would not be able to trade on the
CoinSmart Platform, that Participant is in breach of its agreement with SDT and
may be a breach of securities laws.
Consequences of Breach
consequences for trading by a Participant that breaches securities laws or
these Market Conduct Requirements include:
the Participant’s access to the CoinSmart Platform by reprogramming the
Participant’s account so that it can be closed in an orderly fashion;
the Participant’s trading privileges to “sell only”; and
the Participant’s activity to relevant law enforcement authorities and
HALTING OF TRADES
to time, SDT performs maintenance on the CoinSmart Platform’s order matching
engine to ensure that it is functioning properly and providing for an orderly
market. As a result of this maintenance, SDT may halt all trading on the
CoinSmart Platform. This halt in trading will result in the immediate
cancellation of all open orders by Participants.
As a result
of unexpected system failures, including the failure of key services or systems
that have been outsourced to a third party, SDT may halt all trading on the
CoinSmart Platform. This halt in trading will result in the immediate
cancellation of all open orders by Participants.
Risks related to TRADING ON THE COINSMART
Short History Risk
successfully navigated a considerable number of technical and regulatory
challenges to enable the CoinSmart Platform and believes this is a strong
indicator that it will continue to navigate future challenges. That said, the
continuation of a vibrant CoinSmart Platform community is not guaranteed and
any unforeseen challenges that SDT is not able to navigate could have an
adverse impact on the price of Crypto on the CoinSmart Platform.
Volatility in the Price of Crypto and Liquidity
CoinSmart Platform may be sensitive to new developments, and since volumes are
still maturing, any signiﬁcant changes in market sentiment (by way of
sensationalism in the media or otherwise) can induce large swings in volume and
subsequent price changes. Crypto prices may be volatile and subject to
inﬂuence by many factors, including the levels of liquidity, public
speculation on future appreciation in value, swings in investor
conﬁdence and the future growth of alternative assets. In certain
circumstances, it may become diﬃcult to assess the value of your Crypto.
The trading of Crypto on the CoinSmart Platform has a limited history. The
prices available on the CoinSmart Platform, in some cases, may be more volatile
and subject to inﬂuence by additional factors not speciﬁc to the
value of the Crypto, including liquidity levels and operational interruptions.
Operational interruptions can limit the liquidity of Crypto on the CoinSmart
Platform, which could result in volatile prices and reduced conﬁdence in
the Crypto traded on the CoinSmart Platform. You may not be able to sell the
Crypto when you want to, at a competitive market price, or at all.
certain market conditions, you may ﬁnd it diﬃcult or impossible
to liquidate a position quickly at a reasonable price. This can occur, for
example, when the market for a particular Crypto suddenly drops, or if trading
is halted due to recent news events, unusual trading activity, or changes in
the Crypto markets more generally. The greater the volatility of the market
price of a particular Crypto, the greater the likelihood that problems may be
encountered in executing a transaction. In addition to normal market risks, you
may experience losses due to one or more of the following: system failures,
hardware failures, software failures, network connectivity disruptions, and
Electronic Trading and Dependence on the Internet
risks associated with using an internet-based trade execution software
application including, but not limited to, the failure of hardware and
software. SDT maintains an independent and secure ledger of all transactions to
minimize loss, and maintains contingency plans to minimize the possibility of
system failure. However, SDT does not control signal power, reception, routing
via the internet, conﬁguration of your equipment or the reliability of
your connection to the internet. The result of any failure of the foregoing may
be that you are unable to place an order, your order is not executed according
to your instructions, or your order is not executed at all.
Uncertainty in Regulation
CoinSmart Platform is operated by SDT pursuant to discretionary exemptive
relief granted by the Canadian securities regulatory authorities and expiring
on ● 2023 (the Order). SDT expects that the CoinSmart Platform
will mature and become subject to the securities regulatory regime generally
applicable to marketplaces in Canada, but there is no assurance that this will
happen. If SDT’s authorization to operate the CoinSmart Platform is suspended
or terminated by the securities regulatory authorities, SDT would seek to
ensure that there is an orderly wind-down of the CoinSmart Platform which would
allow for all client orders to be filled or otherwise handled in accordance
with these Market Conduct Requirements.
There is a
risk that a transaction will be delayed because of business disruption, whether
caused by external events or internally generated systems failure. To mitigate
that risk, the firm has robust business recovery policies and procedures as
well as related systems risk management, data protection, and cyber-security
policies and procedures. SDT tests the effectiveness of these policies and
Risk Your Trade Must Be Reversed
There is a
risk that trades may have to be unwound because a legally binding order
requires SDT to unwind the transaction. This risk exists on all marketplaces
for equity and debt securities trading.
Risk You Make a Mistake in Your Order
Participant might make an order with the wrong amount of Crypto or the wrong
price and not discover that error until after your offer is accepted. Clients
bear this risk in the CoinSmart TOS. To reduce the risk, SDT require clients to
review their order and confirm they are correct before submitting it to the
CoinSmart Platform. Clients are responsible for reviewing orders carefully and
ensuring they have been prepared to accurately reflect which Crypto and what
amount they intend to purchase or sell.
Proceeds of Crime (Money Laundering) and Terrorist Financing Act
(Canada) and its regulations (AML Regulation) require SDT to verify the
identity of clients and record transactions on the CoinSmart Platform. SDT must
report suspicious transactions (activity SDT reasonably suspects is related to
money laundering) to FINTRAC (a federal government agency). SDT is prohibited
from telling clients that SDT has made a suspicious transaction report or
anything about what SDT reported. SDT may also be required to freeze client
accounts and suspend trading on the Marketplace if they have reasonable
suspicion under AML Regulation.
of Crypto may lead to an increased risk of fraud or cyber-attack. A breach in
cyber security refers to both intentional and unintentional events that may
cause SDT to lose proprietary information or other information subject to
privacy laws, suﬀer data corruption, or lose operational capacity. This
in turn could cause SDT to incur regulatory penalties, reputational damage,
additional compliance costs associated with corrective measures and/or
ﬁnancial loss. Cyber security breaches may involve unauthorized access
to SDT’s digital information systems (e.g., through “hacking” or malicious
software coding), but may also result from outside attacks such as denial-of-service
attacks (i.e., eﬀorts to make network services unavailable to intended
users). In addition, cyber security breaches of SDT’s third-party service
providers can also give rise to many of the same risks associated with direct
cyber security breaches. As with operational risk in general, SDT has
established risk management systems designed to reduce the risks associated
with cyber security.
No Advice about Crypto
opened your Client Account, SDT informed you of whether investments in Crypto
available on the CoinSmart Platform are suitable for you based on the
information you provided to SDT at the time of account opening and on an
ongoing basis. If your information has changed, you should update it before you
buy more Crypto.
responsible for selecting your own Crypto on the CoinSmart Platform. SDT will
not provide you with any advice or recommendations about a particular Crypto or
mix of Cryptos that you choose. You must rely on your own judgment and the
information available on the CoinSmart Platform and, where necessary, seek
No Securities Regulatory Review
securities commission has reviewed the offerings of Crypto available on the
CoinSmart Platform. Neither SDT nor any Crypto project is a reporting issuer.
SDT has never received a receipt for a prospectus and is not required by law to
provide full, true, and plain disclosure to the public regarding investments in
Crypto. Under the terms of SDT’s registration as a restricted dealer in Canada,
SDT is required to maintain a Crypto Asset Statement for each Crypto which sets
out certain key information about the Crypto. The Crypto Asset Statements are
must not breach securities laws or our requirements when you trade on the
CoinSmart Platform. Securities laws prohibit fraud and market manipulation. We
also prohibit trading that mimics securities law prohibitions against illegal
insider trading, tipping, recommending, or frontrunning. If you use a nominee
to trade for your benefit when you otherwise would not be able to trade on the
CoinSmart Platform, that is a breach of your agreement with us and may be a
breach of securities laws. Potential consequences for trading that breaches
securities laws or our requirements include:
disabling your access to the CoinSmart Platform by reprogramming
your account so that it can be closed in an orderly fashion;
restricting your trading privileges to “sell only”; and
reporting your activity to relevant law enforcement authorities
and securities regulators. If you breach securities laws or our trading
requirements, you will no longer be able to purchase Crypto on the CoinSmart
Platform; you will only be able to sell.
Using Borrowed Money
borrowed money to finance the purchase of Crypto, including by using your
credit card, involves greater risk than using cash resources only. If you
borrow money to purchase Crypto, your responsibility to repay the loan and pay
interest as required by the terms of the loan remains the same even if the
value of the Crypto purchased declines. We do not lend money, extend credit or
provide margin to our clients. You can pay for Crypto on the CoinSmart Platform
using your credit card, however, the credit is being provided by your credit
card company, not by SDT.
Some of our
vendors and service companies may be located or may have servers outside of
Canada. If a service provider or its systems server is located in a foreign
jurisdiction, it is bound by the laws of that jurisdiction and may be able to
disclose your personal information under those laws. This is described more
records and transaction histories are recorded in book entry only form in the
books of the SDT. These books and records are subject to regulatory oversight
and we use permissioned based technology and audit tracking to create a
complete audit trail of every action on the CoinSmart Platform.
If We Ever Go Out of Business
If we go
out of business for any reason and SDT is unable to continue operating, we will
with your instructions, transfer your Crypto to another account or digital
wallet under your ownership and control and we will return any funds to your
credit to the Canadian financial institution of your choice.
Lack of Investor Protection Insurance
purchased and held in your Client Account are not protected by the Canadian
Investor Protection Fund, the Canadian Deposit Insurance Corporation or any
other investor protection insurance scheme.
Waiver; Limitation of liability
up-to-date market information, including quotes or charts that we provide you
is provided ‘as is’ and ‘where is’ without representations or warranties of any
kind, and may contain typographical errors, be incomplete, or inaccurate. While
we may correct any such errors, missing information, or inaccuracies, we are
under no obligation to do so.
We make no
representation or warranty as to the ongoing availability of the site or
services. Although we strive to provide uninterrupted services, we do not
guarantee the absence of interruptions. Outages and downtime may occur for a
variety of reasons.
SDT Complaint Procedure
required to document and respond to each complaint made by a client about any
product or service that SDT or its representatives offer whether the complaint
is received verbally or in writing, fairly and promptly.
SDT is required to make available to clients an independent dispute resolution
service at its own expense for specified complaints, referred to as ‘reportable
complaints’, if the resolution has not produced a timely decision that is
satisfactory to the client.
three types of complaints: 1) service complaints, 2) reportable complaints, and
3) SDT LP complaints. Complaints regarding potential abusive trading on the
CoinSmart Platform as described in Article 4 above are considered reportable
complaints made by a client which are founded on customer service issues and
are not the subject of any applicable laws and regulations. A service complaint
is often operational in nature and might include:
Late delivery of account statements
Inadvertent or minor errors in documentation
Failure to promptly return phone calls
complaints that can be directly resolved without further difficulty do not need
to be reported to compliance. If there is any doubt as to whether a complaint
is service or reportable in nature, it should be discussed with compliance.
complaints made by a client which are not founded on customer service issues
and are the subject of applicable laws and regulations.
means a complaint that
Relates to trading of a registered firm of a representative of the
Is received by the firm within 6 years of the day when the client
first knew or reasonably ought to have known of an act or omission that is a
cause of the complaint.
complaints generally involve a claim for compensation. A reportable complaint
breach of client confidentiality
more serious documentation errors
theft, fraud, misappropriation, forgery, misrepresentation,
personal financial dealings with a client, money laundering,
may have a complaint relating to the conduct of SDT LP which does not involve a
claim for compensation and is therefore not a reportable complaint under
Section 6.2.2 (e.g., such complaint cannot be referred to OBSI under Section
to the conduct of SDT LP may also be identified through SDT’s market
complaints and issues relating to SDT LP will be escalated promptly to SDT’s
Chief Operating Officer (COO) and Chief Compliance Officer (CCO).
The COO and CCO are authorized to conduct an investigation and, if necessary,
implement additional internal controls with respect to the activities of SDT LP
to prevent problematic conduct from recurring on the CoinSmart Platform.
Responsibility for Handling Client Complaints
SDT may be the first person to receive a client complaint. As mentioned above,
a service complaint that is easily and quickly resolved need not be referred to
compliance. However, if there is any doubt as to the seriousness or nature of a
complaint or if initial efforts to directly and simply resolve a complaint are
unsuccessful, compliance should be consulted. It is the responsibility of
compliance to determine whether a complaint requires investigation or other
supervisory action. The CCO is responsible for overseeing all client
complaints regarding potential abusive trading on the CoinSmart Platform
relating to an order entered by, or trade executed with, SDT LP, must be
escalated promptly to the COO and CCO.
Independent Dispute Resolution Services and Referral To OBSI
complaint is received, the client must be given the option to use an
independent dispute resolution service provider in accordance with provisions
under part 13.16 of NI 31-103. The ombudsman for banking services and
investments (OBSI) will be the independent dispute resolution and
mediation service made available to a client. In this instance,
SDT must as
soon as possible, provide the client with a written acknowledgement of the complaint
A description of the firm’s obligation to provide the OBSI as the
dispute resolution service available to the client, at the firm’s expense;
The steps the client must take to access the OBSI and under what
The contact information for the OBSI.
may refer the complaint to the OBSI if,
A complaint was brought within 6 years from the time when the
client first knew or reasonably ought to have known of an act or omission that
is a cause of the complaint;
after 90 days of receiving the complaint, SDT was unable to
provide a written decision regarding the complaint and the client has contacted
the OBSI to have the matter dealt with; or
Within 180 days of the client receiving SDT’s written response,
the client is unsatisfied and has requested the matter be considered by the
SDT is only
required to provide and cover the cost of the OBSI as the independent dispute
resolution provider – it is not required to cover the cost of any other
mediation service whether engaged by the client or not.
considered as an eligible complaint by the OBSI, the client must agree that the
amount claimed (if any) will be no greater than $350,000. Clients retain the
option of pursuing claims for amounts exceeding this limit through other means,
such as civil litigation.
important to note, the use of the OBSI does not apply to clients who reside in
Quebec, since the Québec securities commission (Autorité Des Marchés
Financiers) has its own complaint handling requirements.
must never be concealed or hidden nor should individual registrants try to
resolve a serious complaint directly or personally compensate a client for
losses. The CCO on behalf of the firm must review any complaints that involve a
claim for compensation, or conduct of an individual in connection with trading
or advising activity.
Client Complaint Procedures
reportable complaints submitted to SDT are elevated to, and handled by, the CCO
or his/her delegate, except in instances when the complaint is directly
concerning the CCO. In such instances, the complaint will be handled by the
UDP. The CCO must be notified as soon as possible (ideally within 2 business
days) of any reportable complaints whether received verbally or in writing.
reportable complaints (received by mail, facsimile, chat or email) are reviewed
by the CCO or his/her delegate, and copies are maintained in the client’s file.
When a complaint is received in person or by telephone, detailed notes are
taken, reviewed by the CCO, and maintained in the client’s file. The file is to
A copy of any written correspondence from the client – if the
complaint was received verbally, then the complaint must be documented by the
individual who received the complaint
All follow-up notes and memos regarding the complaint
Any client account information that is pertinent to the complaint
Any written statements made by the registered individual in
relation to the complaint
Copies of any emails or other correspondence between the
registered individual and the client.
Any calculations or analysis conducted in the investigation of the
initial review of the complaint, within five days of the complaint being
received, the CCO or his/her delegate, sends an acknowledgement email to the
client advising the client that the complaint has been received and is being
investigated, and requesting any further information required from the client.
The acknowledgement letter will advise the client that the matter is being
investigated, and provide information on how to access the OBSI, including
under what circumstances this option is available. After a full investigation,
within 90 days of receiving the complaint the CCO or his/her delegate shall
respond in writing to the client with the results of the investigation and a
proposed resolution of the matter. The client is also advised that, if the
client is unsatisfied with the proposed resolution of the dispute, the client
has access to independent dispute resolution or mediation services, at our
expense, and is provided with contact information for such dispute resolution
or mediation services.
Investigating the Decision
will involve legal counsel if the matter involves fraud, or potential criminal
activity, breach of securities law, reputational harm to the firm or its
affiliates or a proceeding filed in a court of law. If any kind of settlement
is to be made, it must first be reviewed and approved by the CCO and presented
to the client. Clients will be required to sign a release upon acceptance of
If a member
of SDT personnel is found to be negligent or having acted inappropriately,
further disciplinary action may be taken upon approval of the UDP. Internal
discipline might include:
a suspension from duties;
new training or re-write of exams;
reporting to the regulator;
dismissal/termination of business relationship
will report on the status of complaints as part of the annual compliance report
to the board.
Client Complaint Reporting
client complaint policy requires that the CCO or designated individual maintain
a record of all reportable client complaints and resolutions. A reportable
complaint is a complaint involving a claim or allegations of inappropriate
behaviour related to a breach in a Registrant’s duty of care or negligent
conduct by any individual at SDT, such as allegations of:
Misappropriation of funds or crypto assets
Unauthorized trading involving the client’s account(s)
The CCO or
his/her delegate maintains a record of all written and verbal reportable
complaints, along with their resolution.
Autorité Des Marchés Financiers Requirements
provisions of the Securities Act (Quebec), SDT will establish a file for
each complaint received from Quebec clients and notify the complainant promptly
upon receipt of the complaint that SDT will be investigating the complaint and
that the complaint may be forwarded to the Autorité des Marchés financiers.
Once SDT has completed its review and if the complainant is dissatisfied with
the outcome of the review, the firm will forward the complaint to the AMF for
review at the complainant’s request.
required to report to the AMF semi-annually regarding the number of complaints
it has received from clients during the relevant period. The CCO or his/her
delegate, is responsible for filing this declaration electronically with the
AMF within 30 days of June 30 and December 31 in each year.
CONFLICTS OF INTEREST
following is a summary of SDT’s policies and procedures for identifying and
responding to conflicts of interest.
registered as a restricted dealer under applicable securities legislation in
all of the provinces and territories of Canada. When carrying out our
responsibilities, there will be circumstances where material conflicts of
interest may arise between SDT, including our employees, and our clients.
of interest includes any circumstance where:
The interests of different parties, such as the interests of a
client and SDT, are inconsistent or divergent
SDT or our representatives may be influenced to put their
interests ahead of the client’s interests, or
Monetary or non-monetary benefits available to SDT or its staff,
or potential detriments to which SDT may be subject, may compromise the trust
that a reasonable client has in SDT and its staff.
materiality of a conflict will depend on the circumstances. SDT should consider
whether the conflict may be reasonably expected to affect either of the
following or both:
the decisions/instructions of the client in the circumstances;
the actions or decisions of SDT in the circumstances.
SDT has a
responsibility to address all material conflicts of interest between a client
and itself, including each individual acting on its behalf, in the best
interest of the client. SDT must avoid any material conflict of interest
between a client and the firm, including each individual acting on its behalf,
if the conflict is not, or cannot be, otherwise addressed in the best interest
of the client. SDT must document the identification, review and analysis of
conflicts of interest, the determination as to whether a conflict is material,
and the controls used by the firm to ensure that material conflicts have been
addressed in the client’s best interest.
SDT acts as
a passive liquidity provider on the CoinSmart Platform exclusively for the
purposes of providing liquidity to SDT clients. Orders entered by SDT are the
same order types available to clients through Advanced Trade. SDT may be a
significant provider of resting orders displayed on the CoinSmart Platform at
prices orders based on the pricing available from its liquidity providers, plus
a “spread” on such trades, which is the positive difference between the price
that SDT pays for crypto assets from its liquidity providers and the price that
SDT charges to clients.
liquidity provider activities does not have an unreasonable advantage over
clients as the matching engine on the central limit order book that powers the
CoinSmart Platform does not distinguish between the SDT orders and the orders of
the clients. SDT’s liquidity provider activities also does not analyze or
consider, or have any advance knowledge of, existing orders of clients in the
central limit order books when determining the bid and ask orders to place. The
spread increases slightly as the order size increases. Currently, SDT’s spread
is in the range of 1 to 2%. The CEO, CCO and COO of SDT review spread levels on
a quarterly basis or more frequently as necessary within the context of the
global markets and activity on the CoinSmart Platform and may adjust spread
placed by SDT LP may not be cancelled, and trades entered into with SDT LP may
only be cancelled in the limited circumstances set out in Section 3.6.
complaint made by a client in connection with an order entered by, or trade
executed with, SDT LP on the CoinSmart Platform, will be escalated promptly to
the CCO. The CCO will determine whether the complaint is a reportable complaint
or not based on whether a claim for compensation is made.
PROCESS FOR PAYMENT AND SETTLEMENT OF
for payment and settlement of transaction is described in the CoinSmart TOS.
ALL FEES PAYABLE IN CONNECTION WITH
TRADING ON THE COINSMART PLATFORM
fees and compensation payable to SDT or any affiliate of SDT and all benefits
received by SDT are disclosed in the Relationship Disclosure Information which
are incorporated into to CoinSmart TOS. The spread charged by SDT LP is also
discussed above in Section 9.