Securities Law & Instruments

In the Matter of the Registration of
Norman John Frank Collins

Opportunity to be heard by the Director
Section 26(3) of the Securities Act


Date:
May 2, 2008
 
Director:
David M. Gilkes
Manager, Registrant Regulation
Ontario Securities Commission
 
Submissions:
Jessica Di Renzo
For the staff of the Commission
Norman John Frank Collins
For the Registrant
 
Background
1. Mr. Collins (the Registrant) has been registered with the Ontario Securities Commission (OSC) since July 8, 1992. Since April 16, 2002, he has been registered as a mutual fund dealer salesperson and limited market dealer salesperson sponsored by Dundee Private Investors Inc. (DPII).

2. On February 8, 2008, DPII submitted a financial disclosure change notice to the OSC indicating that a Requirement to Pay had been issued by the Canadian Revenue Agency against the Registrant.

3. On February 22, 2008, OSC staff sent a letter to the Registrant and DPII proposing that terms and conditions for monthly close supervision reporting, be imposed on the registration of Norman John Frank Collins.

4. The Director may restrict a registration by imposing terms and conditions under subsection 26 of the Securities Act but must provide the registrant with the opportunity to be heard by the Director. The Registrant requested an opportunity to be heard on March 3, 2008.

5. The Registrant requested to be heard through a written submission, which was received on March 12, 2008.
Submissions
6. The Registrant asked that his registration be allowed to continue without terms and conditions. Mr. Collins noted that the debt had been incurred from a period of low production following a family crisis. During this period all his income was required for basic necessities and maintenance of his practice. Mr. Collins continued to file his tax returns and entered into a dialogue with the Canada Revenue Agency (CRA). His tax arrears are not due from failure to file tax returns or understating his income.

7. Mr. Collins has arranged a repayment schedule with CRA to reduce his tax arrears and pay his current taxes.

8. Mr. Collins noted that he has always placed his clients’ interests at the forefront of his business activities. He believed that the imposition of the terms and conditions on his registration would impugn his integrity.
Suitability for Registration
9. The fit and proper standard for registration is both an initial and an ongoing requirement for registrants. The fit and proper standard is based on three well established criteria that have been identified by the OSC:
The [Registrant Regulation] section administers a registration system which is intended to ensure that all Applicants under the Securities Act and the Commodity Futures Act meet appropriate standards of integrity, competence and financial soundness …(Ontario Securities Commission, Annual Report 1991, Page 16)
When analyzing these criteria staff consider:
  • integrity – honesty and good faith, particularly in dealings with clients, and compliance with Ontario securities law;
  • competence – prescribed proficiency and knowledge of the requirements of Ontario securities law; and
  • financial soundness – an indicator of a firm’s capacity to fulfill its obligations and can be an indicator of the risk that an individual will engage in self-interested activities at the expense of clients.
10. In this case neither the Registrant’s integrity nor his competence are in question. However, the Requirement to Pay raises concern regarding the financial soundness of the Registrant. To mitigate the potential risk concerning self-interested activities by the Registrant, staff recommended that terms and conditions for monthly close supervision reporting be imposed on the registration of Norman John Frank Collins. The fact that the Registrant has been paying down the debt owed is not a significant factor in staff’s recommendation to impose terms and conditions.
Decision
11. It is OSC staff practice to impose terms and conditions for monthly close supervision reporting on an individual’s registration should that person file for bankruptcy, receive a garnishment, receive a Requirement to Pay taxes, or file for a consumer proposal. The terms and conditions are removed when the financial obligations resulting from the event have been satisfied. This practice is consistent with the investor protection mandate of the OSC.

12. I find that the Requirement to Pay does have a negative impact on the registrant’s financial soundness. Therefore, I impose the terms and conditions as set out in Exhibit A on the registration of Norman John Frank Collins.

May 2, 2008


“David M. Gilkes”
Manager, Registrant Regulation
Ontario Securities Commission



Exhibit A
Terms and Conditions of Registration
for
Norman John Frank Collins


Monthly Close Supervision Reports are to be completed on the registrant’s sales activities and dealings with clients. The supervision reports are to be retained with the sponsoring firm and must be made available for review upon request. These terms and conditions are to continue until the obligation has been satisfied and acceptable evidence has been provided to the OSC. These terms and conditions will be removed unless the Director has reason to believe that the registrant is not suitable for unconditional renewal of registration at that time.


__________________________               ________________________
Officer for Dundee Private                          Norman John Frank Collins
Investors Inc.



____________________________               ________________________
Print Name of Officer                                      Date



Monthly Close Supervision Report*



I hereby certify that supervision has been conducted for the month ending [date] of the trading activities of [name], by the undersigned. I further certify the following:
  1. All orders from the salesperson were reviewed and approved by a compliance officer or branch manager of Investors Group Financial Services Inc.
  2. There were no client complaints received during the preceding month. If there were complaints, a description of the complaint and follow-up action initiated by the company is attached.
  3. All payments for the purchase of the investments were made payable to the dealer. There were no cash payments accepted.
  4. The transactions of the salesperson were reviewed during the preceding month to ensure compliance with the policies and procedures of the dealer, including the suitability of investments for clients. If there were any violations, a description of the violation and follow-up action is attached.


____________________________
Signature
Compliance Officer/Branch Manager
Dundee Private Investors Inc.


____________________________               ________________________
Print Name                                                       Date




* In the case of violations or client complaints, the regulator must be notified within five business days.