CIBC World Markets Inc.

Decision

Headnote

NP 11-203 Process for Exemptive Relief Applications in Multiple Jurisdictions -- Coordinated Review -- Registered investment dealer exempted from section 228 of Regulation 1015 made under the Securities Act (Ontario) (the Regulation) for recommendations in respect of securities of its parent bank, subject to conditions -- Decision permits the registrant to make recommendations in the circumstances contemplated by subsection 228(2) of the Regulation, but without having to comply with the requirement for (comparative) information, similar to that set forth in respect of the bank, for a substantial number of other persons or companies that are in the industry or business of the bank, to the extent that such comparative information is not known, or ascertainable, by the registrant -- By incorporating other requirements from subsection 228(2), the decision also provides that the space and prominence restrictions in clause 228(2)(d) only relate to the information for which there is such comparative information.

Applicable Ontario Statutory Provisions

Ontario Regulation 1015, R.R.O. 1990, as am., ss. 228, 233.

October 10, 2008

IN THE MATTER OF

THE SECURITIES LEGISLATION OF

ONTARIO, NOVA SCOTIA AND

NEWFOUNDLAND AND LABRADOR

(the Jurisdictions)

AND

IN THE MATTER OF

THE PROCESS FOR EXEMPTIVE RELIEF

APPLICATIONS IN MULTIPLE JURISDICTIONS

AND

IN THE MATTER OF

CIBC WORLD MARKETS INC.

(the Filer)

 

DECISION

Background

The securities regulatory authority or regulator in each of the Jurisdictions (the Decision Maker) has received an application from the Filer for a decision under the securities legislation of the Jurisdictions (the Legislation) that the provisions (the Recommendation Prohibition) in the Legislation which provide that no registrant shall, in any medium of communication, recommend or cooperate with any person [or company] in the making of any recommendation, that the securities of the registrant or a related issuer of the registrant or, in the course of a distribution, that the securities of a connected issuer of the registrant, be purchased, sold or held, shall not, in certain circumstances, apply to the Filer, in respect of securities of its parent bank, the Canadian Imperial Bank of Commerce (the Bank) (the Exemptive Relief Sought).

Under the Process for Exemptive Relief Applications in Multiple Jurisdictions (for a coordinated review application):

(a) the Ontario Securities Commission is the principal regulator for this application, and

(b) the decision is the decision of the principal regulator and evidences the decision of each other Decision Maker.

Interpretation

Terms defined in National Instrument 14-101 Definitions have the same meaning if used in this decision, unless otherwise defined.

Representations

This decision is based on the following facts represented by the Filer:

1. The Filer is a corporation incorporated under the laws of Ontario and has its head office in Toronto, Ontario. To the best of its knowledge, the Filer is not in default of securities legislation in any jurisdiction.

2. The Bank is a Canadian chartered bank named in Schedule I of the Bank Act (Canada) (the Bank Act) and has its head office in Toronto, Ontario.

3. The Filer is a wholly-owned subsidiary of the Bank and, as such, the Bank is a "related issuer" of the Filer for the purposes of the Recommendation Prohibition.

4. The Filer is registered under the Legislation of each of the Jurisdictions as a dealer in the category of "broker" and/or "investment dealer," or the equivalent(s).

5. The Filer is a full-service investment bank and securities brokerage that provides equity research report coverage on a large number of securities issuers.

6. As a member of the Investment Industry Regulatory Organization of Canada (IIROC), the Filer is obliged to comply with IIROC Rule 3400 Research Restrictions and Disclosure Requirements (IIROC Rule 3400).

7. Guideline No. 3 of IIROC Rule 3400 states:

Dealer Members should adopt standards of research coverage that include, at a minimum, the obligation to maintain and publish current financial estimates and recommendations on securities followed, and to revisit such estimates and recommendations within a reasonable time following the release of material information by an issuer or the occurrence of other relevant events.

8. In each of the Jurisdictions, the Legislation provides an exemption (the Statutory Exemption) from the Recommendation Prohibition for a recommendation to purchase, sell or hold securities of an issuer (Recommendation), that is contained in a circular, pamphlet or similar publication (Report) that is published, issued or sent by a registrant and is of a type distributed with reasonable regularity in the ordinary course of its business, provided that the Report:

a) includes in a conspicuous position, in type not less legible than that used in the body of the Report:

(i) a full and complete statement (a Relationship Statement) of the relationship or connection between the registrant and the issuer of the securities; and

(ii) a full and complete statement of the obligations of the registrant under the Recommendation Prohibition and the Statutory Exemption;

b) includes information (Comparative Information) similar to that set forth in respect of the issuer of the securities in respect of a substantial number of other persons or companies (Competitors) that are in the industry or business of the issuer of the securities; and

c) does not give materially greater space or prominence to the information set forth in respect of the issuer of the securities than to the information set forth in respect of any other person or company described therein.

9. So long as the Filer remains a related issuer of the Bank, the Filer cannot rely on the Statutory Exemption from the Recommendation Prohibition to publish in any Report any Recommendation with respect to securities of the Bank, including a revision to a previous Recommendation, in response to:

a) the release of interim financial statements of the Bank or information concerning such financial statements; or

b) the release of information, or the occurrence of any event, that might reasonably be interpreted to have, or possibly have, a significant effect on the value of any securities issued by the Bank, or the continued validity of previously published financial estimates or Recommendation issued by the Filer in respect of any securities issued by the Bank;

unless, at the relevant time, the Filer has been able to ascertain, and is able to include in the Report, Comparative Information for a substantial number of Competitors of the Bank, and also satisfy the requirements of the Statutory Exemption relating to space and prominence of information, referred to in paragraph 8(c) above.

10. The Filer will be precluded from including in any Report Comparative Information for a substantial number of Competitors of the Bank if, at the relevant time:

a) there is no Comparative Information for any Competitors that is known, or ascertainable, by the Filer, or

b) there is no Comparative Information for a substantial number of Competitors of the Bank that is known or ascertainable, by the Filer.

Decision

Each of the Decision Makers is satisfied that the decision meets the test set out in the Legislation for the Decision Maker to make the decision.

The decision of the Decision Makers under the Legislation is that the Exemptive Relief Sought is granted, subject to the following conditions. The Recommendation Prohibition shall not apply to Recommendations of the Filer in respect of securities of the Bank that are made by the Filer in a Report in response to:

i) the release of interim financial statements of the Bank or information concerning such financial statements; or

ii) the release of information, or the occurrence of any event, that might reasonably be interpreted to have, or possibly have, a significant effect on the value of securities issued by the Bank, or the continued validity of previously published financial estimates or Recommendation issued by the Filer in respect of any securities issued by the Bank;

if, at the relevant time, Comparative Information for a substantial number of Competitors of the Bank is not known, or ascertainable, by the Filer, provided that:

A) the Report includes in a conspicuous position, in type not less legible than that used in the body of the Report:

I) a Relationship Statement of the relationship or connection between the Filer and the Bank; and

II) a full and complete statement of the obligations of the Filer under the Recommendation Prohibition and this Decision;

B) for any information in respect of the Bank that is included in the Report, for which there is Comparative Information for any Competitors that is known, or ascertainable, by the Filer, the Report includes such Comparative Information;

C) for any information referred to paragraph (b) above, the Report does not give materially greater prominence to the information in respect of the Bank than to Comparative Information for any Competitors of the Bank that is included in the Report; and

D) this Decision shall terminate on the day that is two years after the date of this Decision.

"Margot C. Howard"
Commissioner
Ontario Securities Commission
 
"Paulette L. Kennedy"
Commissioner
Ontario Securities Commission