Securities Law & Instruments


[Update: The terms and conditions imposed by the Director in this decision were removed as at November 9, 2007.]

IN THE MATTER OF

THE REGISTRATION OF

THERESA DARLENE CONNORS

 

OPPORTUNITY TO BE HEARD BY THE DIRECTOR

SECTION 26(3) OF THE SECURITIES ACT

Date:
October 1, 2007
 
Director:
David M. Gilkes
Manager, Registrant Regulation
Capital Markets Branch
 
Submissions:
Jessica Di Renzo
For the staff of the Commission
 
Theresa Darlene Connors
For the Registrant

Background

1. Ms. Connors (the Registrant) has been registered with the Ontario Securities Commission (OSC) since August 26, 1997. Since November 29, 2006, she has been registered as a mutual fund salesperson and limited market dealer salesperson sponsored by Investors Group Financial Services Inc. (IGFS).

2. On July 27, 2007 IGFS 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 July 30, 2007, OSC staff sent a letter to the Registrant and IGFS proposing terms and conditions for monthly close supervision reporting, be imposed on the registration of Theresa Darlene Connors.

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 did not accept the proposal and requested an opportunity to be heard.

5. The Registrant requested to be heard through a written submission, which was received on August 9, 2007.

Submissions

6. The Registrant asked that his registration be allowed to continue without terms and conditions. Ms. Connors noted that the debt had been incurred over the period 2001 to 2003 when she was a commissioned salesperson making her own tax remittances. Due to her former husband being unemployed over parts of this time, the registrant fell into arrears on her tax payments.

7. Ms. Connors continues to pay down the debt but still owed approximately $3,000 at the time of her submission.

8. The fit and proper standard for registration 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.

9. The fit and proper standard for registration is both an initial and an ongoing requirement for registrants. The Requirement to Pay gave staff concern regarding the financial soundness of the Registrant and her continued fitness for registration. To mitigate the 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 Theresa Darlene Connors.

Decision

10. 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. This practice is consistent with the investor protection mandate of the OSC. The terms and conditions are removed when the financial obligations resulting from the event are satisfied. The fact that the Registrant had been paying down the debt owed is not a factor in staff's recommendation to impose terms and conditions.

11. I find that the Requirement to Pay does have a negative bearing on the registrant's financial soundness. Therefore, the terms and conditions as set out in Exhibit A will be imposed on the registration of Theresa Darlene Connors.

October 1, 2007

"David M. Gilkes"

 

Exhibit A

Terms and Conditions of Registration

for

Theresa Darlene Connors

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.

_________________________
_________________________
Approved Officer for
Theresa Darlene Connors
Investors Group Financial Services Inc.
 
_________________________
_________________________
Print Name of Approved 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
Investors Group Financial Services Inc.
 
_________________________
_________________________
Print Name
Date

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