Supporting a good cause can give you a great feeling and bring you closer to your community. However, as a registrant, you should always be mindful of what that donation "says" as it relates to an actual or perceived conflict. Consider the following example: A good friend of yours is playing in a charitable bowling tournament and is raising money as part of his involvement in the event. He asks you, an investment fund manager, for $250. It also happens that your good friend is an investment advisor that has, from time to time, recommended that clients invest in your fund. First, we should note that there are no specific prohibitions on donations for investment fund managers who manage private funds. However, public mutual funds are subject to National Instrument 81-105 Mutual Fund Sales Practices which could, in some circumstances, restrict the above mentioned donation.

For a private fund, the question of whether the donation is permissible under securities laws comes down to a conflicts consideration. When considering the example set out above, the question that ought to be asked is: "Would your friend be perceived as being obliged to you for the $250 donation such that he may recommend your fund in circumstances where such recommendation is not warranted?" While this is a conflict consideration primarily for your good friend as the investment advisor, you may also be caught up in a conflict dispute as the investment fund manager. A one-time nominal payment may not be seen as creating a conflict but what if it is an ongoing payment or a payment of a larger amount? It is prudent that you consider answers to these types of questions in advance.