Corporate Governance




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The management team is committed to leadership in corporate governance. Arrow Capital Management Inc. ("Arrow") is an employee-owned company, founded in 1999 by James McGovern. Arrow's expertise in active portfolio management and manager selection is evident in its strong, diverse platform, which provides our clients with access to a global selection of actively managed funds. With over 15 years of service, Arrow has been well respected as a Canadian investment management company.

We work continuously to meet and exceed all required standards of corporate governance. We monitor all proposed new rules and modify our policies and practices to meet any additional requirements.

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Soft Dollar Arrangements

We may obtain investment related services from a variety of external sources some of which may be provided to us through “soft dollar” arrangements meaning we execute a certain level of trading activity with the brokerage and financial firms that make these services available to us. Services may take the form of research, analysis, advisory, market prices, electronic trade confirmation systems, third party dealing or quotations, computer hardware or specialized software.

Trade Allocation Policy

Arrow trading policies are governed by the principle of fair allocation of investment opportunities.

This Allocation Policy applies to all Arrow funds which are internally managed.

Trades will be allocated on a basis believed to be fair and equitable; no fund will receive preferential treatment over any other. The portfolio management team will take steps to ensure that no fund will be systematically disadvantaged by the aggregation, placement, or allocation of trades.

Transactions are allocated promptly, usually on the trade date, and no reallocations are permitted from one account to another except where the original allocation was done in error.

No allocations will be made to a personal account of the portfolio management team or any Access Person (as defined in the Arrow Code of Ethics).

Principle of Fair Allocation of Investment Opportunities

In order to ensure fairness in the allocation of investment opportunities among the funds we manage, we will allocate investment opportunities in compliance with securities regulations and with consideration to the prime determinants of market exposure, cash availability and industry sector exposure and with regard to the suitability of such investments to each fund. In determining the suitability of each investment opportunity to a fund, consideration will be given to a number of factors, the most important being the fund’s investment objectives and strategies, existing portfolio composition and cash levels.

Where an investment opportunity is suitable for two or more funds we will allocate the opportunity equitably in order to ensure that funds have equal access to the same quality and quantity of investment opportunities, and in determining such allocations will consider a variety of factors and principles, including, but not limited to, the following:

  • Legal and regulatory restrictions affecting the participation rates for any funds managed.
  • The need within a particular fund for liquidity.
  • Other investment opportunities that may be available to a fund.
  • Anticipated volatility associated with the investment in respect of each fund’s investment strategy and objectives.
  • Each fund’s own investment restrictions.
  • Where allocation of an investment opportunity would be insufficient to make up a meaningful portion of an individual fund’s portfolio.
  • The avoidance of odd lots or excessive transaction costs relative to the size of the fund’s participation in the investment opportunity.
  • The need to rebalance positions held by any fund in an investment due to capital infusions or withdrawals.
  • Transactions are allocated promptly, usually on the trade date, and no reallocations are permitted from one account to another except where the original allocation was done in error.
  • The allocation for each trade must be documented by way of a trade ticket by the end of the business day on which the order is filled unless the broker has not confirmed the fill to the portfolio management team by the end of the day in which case the trade ticket will be completed the following day. Taking into consideration the prime determinants described above and/or specific fund objectives and restrictions, certain trades will not be allocated across all funds. In such situations, explanations will be documented on the trade ticket.
  • A copy of each trade ticket is maintained. If any deviation from the investment trade allocation policy is noted, the investment committee is notified in writing. Any corrective action to be taken or follow-up explanations will be noted in the investment compliance binder.
  • Given different inception dates and historical cash flows, each fund may hold the same position with a different cost base.

Prime Determinants

  • Overall market exposure;
  • Industry sector exposure;
  • and Cash availability

The portfolio management team will strive to maintain the same overall exposure and the same long and short positions in each portfolio.

The portfolio management team takes index weightings into consideration as the returns for the funds are measured relative to the S&P/TSX Index, rather than in absolute terms, as is the case for the alternative investment strategies.

IPO and/or Block Trades

Generally, a company issuing in an initial public offering (“IPO”) will have a limited operating history and thus IPO investments might frequently be considered speculative. The principle of fair allocation of investment opportunities is applied to IPO’s, with special attention being given to the suitability of investments vis á vis the fund’s investment objectives and strategies.

A block trade involves the crossing of a large amount of shares of a security, where the brokerage firm acts to match the buyers and sellers. A block trade is generally transacted at a small premium or discount to the prevailing market price of the security; commission is charged at a negotiated institutional rate. We are not a significant participant in block trades; however, in the event we do participate, the portfolio manager will seek to negotiate the best possible price through the broker. The allocation process for a block trade is no different than that of a regular trade.

Proxy Voting

Issuers' proxies most frequently contain proposals to elect corporate directors, to appoint external auditors and set their compensation, to adopt or amend management compensation plans, and to amend the capitalization of the company. These guidelines summarize the corporate governance principles, which the Funds will generally support by the exercising of votes on these issues.

Proxy Voting Guidelines
2010 proxy voting record
2011 proxy voting record
2012 proxy voting record
2013 proxy voting record
2014 proxy voting record
2015 proxy voting record
2016 proxy voting record

Complaint Resolution Policy

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Trade Matching Statement

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