Conflicts of Interests Statement

The following statement outlines certain potential conflicts of interests which may arise between you, as a lender’s account holder, and Loop Securities Inc. ( “Loop Securities” , “we” or “us” ), an exempt market dealer registered in all of the provinces and the territories of Canada in which it engages in dealing activities.

  1. General

    Loop Securities administers the accounts of all registered lenders on the peer-to-peer lending platform Lending Loop ( “Lending Loop” ). It facilitates the distribution of series of notes issued by one of its affiliates, Loop Funding Inc. ( “Loop Funding” ).

    Since these transactions may create a conflict between our interests and yours, we are required by provincial law to disclose to you certain relevant matters relating to the transactions. This statement contains a general description of the required disclosure.

  2. Definitions

    “Related Party”: An issuer is related to us if we are an influential securityholder of theirs, or they are an influential securityholder of ours, or if we have a common influential securityholder.

    “Connected Party”: An issuer is connected to us where a reasonable prospective purchaser of their securities might question the issuer’s independence from us, a party related to us, one of our directors or officers or a director or officer of our Related Party.

    “Associated Party”: A party is associated with us if we beneficially own, directly or indirectly, securities carrying more than 10% of the voting rights of the party or if such party has a close relationship with us, such as one of our directors or officers.

  3. Loop Securities Inc.

    Loop Securities and Loop Funding are both wholly owned subsidiaries of Loop Financial Inc. (“Loop Financial”). Consequently, Loop Securities, Loop Financial and Loop Funding may be considered as Related Parties and Connected Parties of each other.

  4. DISCLOSURE OF CONFLICTS OF INTERESTS

    1. Types of conflicts of interests
    2. The general types of conflicts of interests which can arise are:

      1. Conflicts of interest between you and us;
      2. Conflicts of interest between you and other lenders on Lending Loop; and
      3. Conflicts of interest between us and our Related Parties, Connected Parties and Associated Parties.

    3. Management of Conflicts of Interest
    4. In general, we deal with and manage relevant conflicts as follows:

      1. Avoidance: This includes avoiding conflicts that are prohibited by law as well as conflicts that cannot effectively be addressed.
      2. Control: This means managing acceptable conflicts through the implementation of internal policies and procedures.
      3. Disclosure: This means providing you with information about potential conflicts, so that you can properly assess independently their significance.

      Our general policy is to address conflicts of interests in a fair, equitable and transparent manner. We will try to avoid conflicts where possible, and in all other cases either disclose the conflicts or manage them through internal controls and review processes. Conflicts deemed too significant to be addressed through controls or disclosures will be avoided. Disclosures will be made in a timely, meaningful and prominent manner.

      This statement is intended to assist you in understanding and assessing material potential and actual conflicts of interests, including how we address them. It is, however, only an overview of a complex subject. Canada has comprehensive and extensive securities regulatory rules and regulations, many of which are directed at protecting client and investor interests, including dealing with conflicts of interests. Please refer to the websites and publications of the provincial securities commissions through the Canadian Securities Administrators (CSA) for more information on how Canadian securities regulations address conflicts of interests in order to safeguard the investing public.

    5. Examples of Conflicts of Interests on Lending Loop

    6. Conflicts of Interests Address By Description

      Loop Securities engages in dealing activities on the account of all lenders who open an account on Lending Loop and therefore represents the interests of all lenders.

      Control

      Loop Securities treats all lenders equally and provides each lender with the same investment opportunities. Notes are offered to all lenders at the same time and may be purchased on a first come first served basis.

      Loop Securities earns compensation from Loop Funding by facilitating the distribution of notes issued by Loop Funding to you.

      Disclose/Control

      Loop Funding provides compensation to Loop Securities equal to its operating costs on an annual basis.

      We will inform you of all applicable fees, commissions and other compensation in advance while using Lending Loop so that you know exactly what you will be paying for.

      As of the date hereof, Loop Securities does not charge any fee to open and maintain a lender’s account on Lending Loop or to deposit and withdraw funds to and from a lender’s account. Please note, however, that Loop Funding charges an annual fee amounting to 1.5% of the amounts received as repayments under the terms of notes purchased on Lending Loop and that such fee is deducted by Loop Securities and remitted to Loop Funding before any amount is credited to your account on the account of note repayments to which you are entitled to. The amounts of such fees are disclosed in the section titled “Transactions” of your Lending Loop account. Furthermore, lenders may have to bear collection costs equal to up to 35% of the amount collected from a borrower in the event a borrower becomes in default of its obligations under its loan agreement.

      Please also note that we are required by securities regulations to only allow you to make “suitable” investment decisions, in line with your investment objections and risk tolerances. We have policies and procedures put into place to advise you not to purchase a note where we believe that the note would not be a suitable investment for you. In such event, you may elect to follow our advice or purchase it regardless of our advice.

    This Conflicts of Interests Statement will be updated to reflect additional procedures adopted to address potential conflicts and to disclose any other Related Party or Connected Party.

  5. Questions

    If you have any questions, please contact Loop Securities’ Chief Compliance Officer by email at compliance@lendingloop.ca or by telephone at 1-888-223-5667.