Relationship Disclosure Information
November 30, 2022
The Ontario Securities Commission requires that we provide all of our clients with this Relationship Disclosure Information (“RDI”) which is designed to help clients of Startly Inc. a/o/a Startly Portal (“Startly”) clearly understand the nature of the services that are provided by Startly, and the necessary elements of satisfactory ongoing relationship.
Startly is registered as an Exempt Market Dealer (EMD) in Ontario, British Columbia and Alberta, Canada. Startly sells exempt market securities over the internet through the Startly platform (the “Platform”). The securities that Startly sells are not offered by prospectus.
3. Products & Service
Startly presents a unique approach to exempt offering investment through its secure and convenient online platform along with its commitment to a high standard of client care.
Startly sells securities of related, unrelated or connected issuers who are investors in the exempt securities market to individuals and corporations that can rely on an exemption provided under National Instrument 45-106 –Prospectus and Registration Exemptions (45-106), or other available exemptions, if applicable. Startly provides disclosure on related and connected issuers through an issuer’s offering documentation and/or within the issuer’s profile on the Platform.
Members of the Startly team may contact you to assist with requests like account opening, transfers, and other account maintenance/Platform-related issues.
It is important to be aware of the potential for risk inherent in investing in the capital markets. Generally, investments are not guaranteed. Factors that may affect the value of your investments include general economic factors; market and business conditions; fluctuations in securities prices, interest rates, and foreign currency exchange rates; changes in government regulations; and catastrophic events.
On a personal level, investment decisions should be based on what is appropriate for your circumstances. Startly recommends an investment to you by examining your financial circumstances, risk tolerance and your investment needs and objectives.
Clients may or may not borrow to invest in a financial transaction. There are certain risks involved in using borrowed money to finance the purchase of a security. If you borrow money to purchase securities, your responsibility to repay the loan and pay interest as required by its terms remains the same even if the value of the securities purchased declines.
Generally, one should only borrow to invest if:
• You are comfortable with taking risk.
• You are comfortable taking on debt to buy investments that may fluctuate in value.
• You are investing for the long-term.
• You have a stable income.
As an Exempt Market Dealer, there are risks associated with exempt market securities some of which are listed herein below:
• Exempt market securities may not be listed on any stock exchange that could restrict your ability to resell them. There could be a lockup period that applies to the security that restricts you from trading, selling or transferring the security.
• Exempt market securities are generally not covered by deposit or investor protection insurance;
• Securities Regulators do not review offering memoranda for completeness;
• Private issuers are not subject to the same ongoing disclosure obligations as reporting issuers. Issuers of exempt market securities generally do not have to file a prospectus. (A prospectus describes the investment in detail and gives you some legal protections). Furthermore, non-reporting issuers are not obligated to publish financial information or notify the public of changes in its business.
• There is a risk that the issuer will be unable to meet interest and principal payments on its obligations on a timely basis.
• There are no assurances that an investment will maintain its net acquisition value or produce any projected income or capital return. Investment values can frequently fluctuate, and past performances may not be repeated.
Given the nature of Startly’s business model, which includes making available offerings in real estate and real estate related investments and in early stage companies, there are certain risk factors which can affect the value of a specific investment holding such as:
Real Estate Industry Investment Risk
Real estate investments are generally subject to varying degrees of risk depending on the nature of the property. Such risks include the highly competitive nature of the real estate industry, changes in general economic conditions (such as the availability and cost of mortgage funds), local conditions (such as the supply of office, industrial, retail space or warehousing or the demand for residential real estate in the area and thereby the prices at which serviced lots and parcels may be sold), government regulation and changes therein (such as planning, zoning, taxation of property and environmental legislation), changes in governments and the political environment in the applicable jurisdictions, competition from other available properties and the attractiveness of the property to potential purchasers, including builders. In addition, each segment in the real estate industry is capital intensive and is typically sensitive to interest rates and general economic conditions
Risks Associated with Real Property
All real property investments are subject to elements of damage and destruction such as fire, flood, and casualty as a result of natural disasters, criminal acts, or negligence that may result in significant losses for your investment holdings.
Risks Associated in Securities in Early Stage Companies
Early stage companies are companies seeking to grow and/or expand that may or may not currently be generating revenue and/or be cashflow positive. Such companies have a high risk of failure which can result from numerous factors including inability to raise sufficient funds to carryout the business plan, failure to secure clients and/or sales, failure by the senior management and/or staff to effectively implement the business plan, market risk including competition from third parties, regulatory risk including inability to obtain necessary licenses or permits, and technological risk including intellectual property disputes and obsolesce of or problems with exising technologies.
The risks highlighted above are not conclusive. Risk disclosures specific for each offering are reviewed by Startly and are presented within the offering documents for the issuance.
Offering documents and the risks associated with the securities of an issuer contained therein should be reviewed thoroughly by an investor or an investor’s professional advisors before making any investment through Startly.
5. Know Your Client Obligations ("KYC") and Investor Suitability
Startly is obligated to ensure the proposed investment is suitable for you. To assess the suitability of proposed investments, Startly will obtain information relating to your investment objectives, risk tolerance, investment knowledge and financial situation.
The cornerstone of our relationship with you is the Know Your Client Form (KYC Form).
We are required to establish the following information before we open an account for you:
• Your identity
• Whether you are an insider of a publicly traded company
• Your investment needs and objectives
• Your financial circumstances; and
• Your risk tolerance
Therefore, if there are any changes to your circumstances, please inform us.
As a registered firm, Startly Inc. a/o/a Startly Portal is required to be a member of The Ombudsman for Banking Services and Investments (OBSI). Please see the explanation below for additional detail.
6. Client's Account
A client’s account with Startly is governed by the terms of the applicable offering documents relating to a specific investment product in which the client wishes to invest. Startly does not hold client funds. All investment amounts are paid to a third party escrow agent, lawyer's trust account or other custodian in accordance with the particulars found in the offering materials for each particular offering.
7. Account Fees and Operating Expense
The fees applicable to any investment product are as set out in the offering documents related to that product. The offering documentation also describes the costs that may be charged to you, the client, as operating expenses (audit fees, legal fees, etc.). Startly, acting in its capacity as an exempt market dealer, currently does not charge clients any fees for the operation of their account on the Platform. You will be notified of any changes in fees charged to you the Investor.
Startly may enter into referral arrangements with affiliated or non-affiliated registrants and non-registrants, some of which are related registrants to Startly, so that we may provide services and products to referred clients. We may pay a referral fee to the referrer. A referral fee is any monetary or non-monetary benefit provided for the referral. We negotiate the referral fee with the referrer. Any fees and expenses paid by referred clients remains the same regardless of any referral fee paid by Startly to the referrer. We will inform all referred clients under a referral arrangement.
Startly may also receive a referral fee for referring its clients to other service providers.
8. Conflicts of Interest
Securities legislation in Ontario requires Startly to make certain disclosures regarding conflicts of interest. This statement is to inform you of the nature and extent of conflicts of interest that might be expected to arise between Startly and its clients. Startly considers a conflict of interest to be any situation where the interests of a client and those of Startly are inconsistent. Startly takes reasonable steps to identify all existing material conflicts of interest and those that we would reasonably expect to arise. Startly determines the level of risk for each conflict. Startly avoids situations that would result in a serious conflict of interest that would be too high a risk for both its clients and market integrity.
The most common types of conflicts of interest that can occur are:
• Conflicts of interest between us and you; and
• Conflicts of interest between you and our other clients.
Startly manages material conflicts of interest in three ways:
Avoidance: Startly avoids conflicts of interest that are prohibited by law, as well as any conflicts that cannot be effectively addressed other than by not engaging in the activity that would give rise to the conflict.
Control: In Startly’s judgment, the conflict of interest can be successfully managed, Startly will so by restricting access to information and/or separating business functions.
Disclosure: If Startly is unable to avoid or control the conflict, then Startly will disclose the conflict to clients appropriately. The clients can then assess the significance of the conflict in light of the services offered by Startly and determine with Startly whether and how to proceed accordingly.
Every director, officer or employee of Startly shall conduct themselves in a manner consistent with the highest ethical standards. They will avoid any action, whether for personal profit or otherwise, that results in an actual or potential conflict of interest, or the appearance of a conflict of interest, with a client or which may be otherwise detrimental to the interests of a client.
9. Use of Performance Benchmarks
Startly Inc. a/o/a Startly Portal does not make use of benchmarks as the nature of the investments recommended do not correspond to any existing benchmarks.
Startly delivers a trade confirmation when a client purchases or sells a security, setting out the following information:
• the quantity and description of the security purchased or sold;
• the price per security paid or received by the client;
• the commission, sales charge, service charge and any other amount charged in respect of the transaction;
• whether the registered dealer acted as principal or agent;
• the name of the dealing representative, if any, in the transaction;
• the settlement date of the transaction;
• if applicable, that the security is a security of the registrant, a security of a related issuer of the registrant or, if the transaction occurred during the security’s distribution, a security of a connected issuer of the registered dealer.
Additionally, when Startly delivers a client activity statement to clients, it does so only if there was any activity in the preceding quarter. The statements can be expected to contain the following:
• the date of the transaction;
• the type of transaction;
• the name of the security;
• the number of securities;
• the price per security; and
• the total value of the transaction.
11. Complaints Process
If you have a complaint about our services or a product, email us at: info [AT] startlyportal.ca or reach us by mail at:
Attn: Nicholas dePencier Wright, CCO
5700-100 King Street West
Toronto, Ontario, Canada
• what went wrong
• when it happened
• what you would like as a resolution
We will acknowledge your complaint in writing, as soon as possible, typically within 5 business days of receiving your complaint. We may ask you to provide clarification or more information to help us resolve your complaint.
Help us resolve your complaint sooner by:
• Making your complaint as soon as possible.
• Replying promptly if we ask you for more information.
• Keeping copies of all relevant documents, such as letters, emails and notes of conversations with us.
We normally provide our decision in writing, within 90 days of receiving a complaint. It will include:
• a summary of the complaint
• the results of our investigation
• our decision to make an offer to resolve the complaint or deny it, and an explanation of our decision
If we cannot provide you with our decision within 90 days, we will:
• inform you of the delay
• explain why our decision is delayed, and
• give you a new date for our decision
Ombudsman for Banking Services and Investments (OBSI)
You may be eligible for the independent dispute resolution service offered by the Ombudsman for Banking Services and Investments (OBSI).
You always have the right to go to a lawyer or seek other ways of resolving your dispute at any time. A lawyer can advise you of your options. There are time limits for taking legal action. Delays could limit your options and legal rights later on.
You may be eligible for OBSI’s free and independent dispute resolution service if:
• we do not provide our decision within 90 days after you made your complaint, or
• you are not satisfied with our decision
OBSI can recommend compensation of up to $350,000.
OBSI’s service is available to clients of firm. This does not restrict your ability to take a complaint to a dispute resolution service of your choosing at your own expense, or to bring an action in court. Keep in mind there are time limits for taking legal action.
You have the right to use OBSI’s service if:
• your complaint relates to a trading or advising activity of our firm or by one of our representatives
• you brought your complaint to us within 6 years from the time that you first knew, or ought to have known, about the event that caused the complaint, and
• you file your complaint with OBSI according to its time limits below
If we do not provide you with our decision within 90 days, you can take your complaint to OBSI any time after the 90-day period has ended. If you are not satisfied with our decision, you have up to 180 days after we provide you with our decision to take your complaint to OBSI.
Filing a complaint with OBSI
Email: [email protected]
Telephone: 1-888-451-4519 or 416-287-2877 in Toronto
OBSI will investigate. OBSI works confidentially and in an informal manner. It is not like going to court, and you do not need a lawyer.
During its investigation, OBSI may interview you and the representatives of our firm. We are required to cooperate in OBSI’s investigations. OBSI can help you best if you promptly provide all relevant information, including:
• your name and contact information
• your firm’s name and contact information
• the names and contact information of any of our representatives who have been involved in your complaint
• the details of your complaint
• all relevant documents, including any correspondence and notes of discussions with us
OBSI will provide its recommendations. Once OBSI has completed its investigation, it will provide its recommendations to you and us. OBSI’s recommendations are not binding on you or us.
OBSI can recommend compensation of up to $350,000. If your claim is higher, you will have to agree to that limit on any compensation you seek through OBSI. If you want to recover more than $350,000, you may want to consider another option, such as legal action, to resolve your complaint.
For more information about OBSI, visit www.obsi.ca