Multilateral Instrument 11-102 Passport System -- National Policy 11-203 Process for Exemptive Relief Applications in Multiple Jurisdictions -- National Instrument 33-109 Registration Information (NI 33-109) and Derivatives Regulation (Quebec) -- relief from certain filing requirements of NI 33-109 and Derivatives Regulation (Quebec) in connection with a bulk transfer of business locations and registered and non-registered individuals under an amalgamation in accordance with section 3.4 of Companion Policy 33-109CP to NI 33-109.
Applicable Legislative Provisions
Multilateral Instrument 11-102 Passport System.
National Instrument 33-109 Registration Information and Companion Policy 33-109CP.
October 29, 2013
IN THE MATTER OF
THE SECURITIES LEGISLATION OF
ONTARIO AND QUÉBEC
IN THE MATTER OF
THE PROCESS FOR EXEMPTIVE RELIEF APPLICATIONS
IN MULTIPLE JURISDICTIONS
IN THE MATTER OF
RICHARDSON GMP LIMITED
MACQUARIE PRIVATE WEALTH INC.
(MPW, and together with RGMP, the FILERS)
The principal regulator in Ontario (the Jurisdiction) has received an application from the Filers for a decision under the securities legislation of the Jurisdiction of the principal regulator (the Legislation) for relief from sections 2.2, 2.3, 2.5, 3.2, 4.1 and 4.2 of National Instrument 33-109 Registration Information (NI 33-109) pursuant to section 7.1 of NI 33-109 to allow the bulk transfer (the Bulk Transfer) of all the registered representatives and permitted individuals (Representatives) and all the locations of MPW to the amalgamated entity resulting from the Proposed Transaction (as defined below) and carrying on business as "Richardson GMP Limited" (Amalco), on or about November 1, 2013, in accordance with section 3.4 of the Companion Policy to NI 33-109 (the Exemption Sought).
The securities regulatory authority in Québec (the Derivatives Decision Maker) has received an application from the Filers for a decision under the derivatives legislation of Quebec for relief from section 11.1 of the Derivatives Regulation (Québec) pursuant to section 86 of the Derivatives Act (Québec) to allow the Bulk Transfer of any Representatives registered under Québec derivatives legislation and all of the associated locations of MPW to Amalco, on or about November 1, 2013, in accordance with section 3.4 of the Companion Policy to NI 33-109 (the Derivatives Exemption Sought).
Under the Process for Exemptive Relief Applications in Multiple Jurisdictions (for a hybrid application):
(a) the Ontario Securities Commission is the principal regulator for this application;
(b) the Filers have provided notice that subsection 4.7(1) of Multilateral Instrument 11-102 Passport System (MI 11-102) is intended to be relied upon by the Filers in all the other provinces and territories of Canada;
(c) the decision with respect to the Exemption Sought is the decision of the principal regulator; and
(d) the decision with respect to the Derivatives Exemption Sought evidences the decision of the Derivatives Decision Maker.
Defined terms contained in MI 11-102 and National Instrument 14-101 Definitions have the same meaning if used in this decision, unless otherwise defined.
This decision is based on the following facts represented by the Filers:
a) RGMP is a privately-held corporation incorporated pursuant to the laws of Canada and has a head office located in Toronto, Ontario.
b) RGMP provides a broad array of wealth management services to Canadians, including financial planning, wills and estates planning, tax planning, insurance planning, and brokerage services.
c) RGMP was formed as the result of the 2009 combination of GMP Private Client L.P., the wealth management business of GMP Capital Inc., and Richardson Partners Financial Limited, the wealth management business of James Richardson & Sons, Limited.
d) RGMP is an Investment Industry Regulatory Organization of Canada (IIROC) Dealer Member and is registered as an investment dealer in each of the provinces and territories of Canada and also as a derivatives dealer in the province of Québec.
e) As of the date hereof, RGMP has approximately 302 Representatives registered in one or more of the jurisdictions of Canada and 18 business locations throughout the jurisdictions of Canada.
f) For trading, custody, clearing and settlement purposes, RGMP acts as a Type 2 introducing broker to GMP Securities pursuant to a Uniform Type 2 Introducing/Carrying Broker Agreement dated November 12, 2009 (the RGMP/GMP Securities Platform).
g) To the best of RGMP's knowledge, RGMP is not in default of any requirements of the securities legislation or derivatives legislation of any jurisdiction of Canada.
a) MPW is a privately-held corporation incorporated pursuant to the laws of Canada and has a head office located in Toronto, Ontario.
b) MPW is a retail business offering a range of wealth management services to Canadians, including brokerage services and investment products and services.
c) MPW is an IIROC Dealer Member and is registered as an investment dealer in each of the provinces and territories of Canada and also as a derivatives dealer in the province of Québec.
d) MPW is a member of the Toronto Stock Exchange, TSX Venture Exchange and the Bourse de Montréal (collectively, the Exchanges).
e) As of the date hereof, MPW has approximately 415 Representatives registered in one or more of the jurisdictions of Canada and 16 business locations throughout the jurisdictions of Canada.
f) MPW is a self-clearing investment dealer (the MPW Platform), but also acts as a Type 3 introducing broker to National Bank for a discreet group of investment advisors and their clients pursuant to a Uniform Type 3 Introducing/Carrying Broker Agreement dated January 1, 2003 (the MPW/National Bank Platform).
g) To the best of MPW's knowledge, MPW is not in default of any requirements of the securities legislation or derivatives legislation of any jurisdiction of Canada.
a) Pursuant to a share purchase agreement dated September 9, 2013 between Macquarie BFS Holdings Ltd. (Vendor) and RGMP, the Vendor has agreed to sell and assign to RGMP, and RGMP has agreed to purchase from the Vendor, all of the issued and outstanding shares of MPW. RGMP and MPW will then amalgamate and continue under the name "Richardson GMP Limited" (the Proposed Transaction).
b) Appropriate notifications to, and requests for requisite consents, approvals and exemptions from, the securities regulators and securities regulatory authority, IIROC and the Exchanges have been or will be made in regard to the Proposed Transaction.
c) Each Representative (other than any Representative who will be terminated prior to the closing of the Proposed Transaction) will be transferred to Amalco pursuant to the Proposed Transaction (under the same registration/approval categories in which she/he is registered/approved on the National Registration Database).
d) RGMP and MPW wish to complete the Proposed Transaction, including the Bulk Transfer of business locations and Representatives, forthwith after receiving all applicable regulatory approvals, consents and exemptions required for the Proposed Transaction.
e) The Filers do not anticipate that there will be any disruption in the ability of the Filers to trade or advise on behalf of their respective clients either immediately before or immediately after the Bulk Transfer.
f) On or about November 1, 2013, as a result of the amalgamation, all of the current registrable activities of the Filers will become the responsibility of Amalco. Amalco will assume all of the existing registrations and approvals for all of the Representatives and all of the locations of the Filers.
g) Amalco will carry on the wealth management business of MPW in substantially the same manner as MPW prior to the Bulk Transfer with the exception that, for trading, custody, clearing and settlement purposes, the MPW Platform will be shifted to the RGMP/GMP Securities Platform (subject to certain transitional arrangements). The MPW/National Bank Platform will be preserved until on or about January 5, 2014, at which time it will be shifted to the RGMP/GMP Securities Platform.
h) Clients of MPW whose accounts will be transferred to Amalco (and, ultimately, to GMP Securities L.P. (as the carrying broker)) will be provided with all requisite notices contemplated by National Instrument 31-103 Registration Requirements, Exemptions and Ongoing Registrant Obligations, IIROC Rules 35 and 3500 and the Uniform Type 2 Introducing/Carrying Broker Agreement dated November 12, 2009 between RGMP, as introducing broker, and GMP Securities L.P., as carrying broker.
Submissions in support of exemptions
a) Given the significant number of Representatives and affected business locations of MPW, it would be unduly time-consuming to individually transfer all affected business locations and Representatives of MPW to Amalco in accordance with the requirements set out in NI 33-109. Moreover, it is imperative that the Bulk Transfer of the Representatives and locations occur on the same date in order to ensure that there is no break in registration.
b) The Bulk Transfer will not be contrary to the public interest and will have no negative consequence on the ability of the Filers to comply with all applicable regulatory requirements or their ability to satisfy any obligations to their clients.
Each of the principal regulator and the Derivatives Decision Maker is satisfied that the decision meets the test set out in the Legislation and the Derivatives Act (Québec) for the principal regulator and the Derivatives Decision Maker, respectively, to make the decision.
The decision of the principal regulator under the Legislation is the Exemption Sought is granted, provided that the Filers make acceptable arrangements with CDS Inc. for the payment of the costs associated with the Bulk Transfer, and make such arrangements in advance of the Bulk Transfer.
The decision of the Derivatives Decision Maker under the Derivatives Act (Québec) is that the Derivatives Exemption Sought is granted, provided that the Filers make acceptable arrangements with CDS Inc. for the payment of the costs associated with the Bulk Transfer, and make such arrangements in advance of the Bulk Transfer.