Nexus Investment Management Inc. - MRRS Decision

Headnote

Relief granted from provision that prohibits a portfolio manager from investing in any issuer in which a "responsible person" or an associate of a responsible person is an officer or director unless that fact is disclosed to the client and the written consent of the client to the investment is obtained before the purchase. Relief was required because one officer of the applicant has a spouse who is a director of a reporting issuer in which the applicant has invested on behalf of its clients and a U.S. public company in which the applicant may, in the future, wish to invest on behalf of its clients.

Statutes Cited:

Securities Act, R.S.O. 1990, c. S.5, as am., s. 118(2)(a).

December 14, 2007

IN THE MATTER OF

THE SECURITIES LEGISLATION OF

ALBERTA, ONTARIO, and QUÉBEC

(the Jurisdictions)

AND

IN THE MATTER OF

THE MUTUAL RELIANCE REVIEW SYSTEM

FOR EXEMPTIVE RELIEF APPLICATIONS

AND

IN THE MATTER OF

NEXUS INVESTMENT MANAGEMENT INC.

MRRS DECISION DOCUMENT

Background

The local securities regulatory authority or regulator (the Decision Maker) in each of the Jurisdictions has received an application from Nexus Investment Management Inc. (the Filer) for a decision, under Subsection 121(2)(a)(ii) of the Securities Act (Ontario), Section 192(2)(a) of the Securities Act (Alberta), and Section 236 of the Regulations made under the Securities Act (Québec) (the Legislation), seeking an exemption from the prohibition (the Prohibition) contained in the Legislation prohibiting a portfolio manager from knowingly causing an investment portfolio managed by it to invest in any issuer in which a responsible person or an associate of the responsible person is an officer or director (the Requested Relief).

Under the Mutual Reliance Review System for Exemptive Relief Applications (the System):

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

(b) this MRRS decision document evidences the decision of each Decision Maker.

Interpretation

Defined terms contained in National Instrument 14-101 Definitions have the same meaning in this decision document unless they are otherwise defined in this decision document.

Representations

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

1. The Filer is incorporated under the laws of Ontario and has its head office in Toronto.

2. The Filer is registered as an adviser in the category of investment counsel and portfolio manager or equivalent in Ontario, British Columbia, Alberta, Québec and New Brunswick. It is also registered as a limited market dealer in Ontario.

3. The Filer provides investment advisory services for various clients and acts as the portfolio manager for three privately offered investment funds.

4. When acting as portfolio manager, investment decisions are made by a decision-making body, currently consisting of four persons (the Committee).

5. One officer of the Filer has a spouse who is a director of a reporting issuer in which the Registrant has invested on behalf of its clients and a U.S. public company in which the Registrant may, in the future, wish to invest on behalf of its clients.

6. The Filer will implement and enforce a policy in writing that would require any member of the Committee who is, or whose associate is, an officer or a director of a reporting issuer (or the equivalent):

(a) to disclose all material relationships with such issuer of such officer or director or any associate of such officer or director, to the registrant when they arise; and

(b) not to provide advice with respect to the purchase, holding or sale of securities of such issuer or to make or participate in making the decision to purchase, hold or sell such securities and, in particular, not to be present at a meeting of the Committee during any discussion of such issuer (the Non-Participation Policy).

Decision

Each of the Decision Makers is satisfied that the test contained in the Legislation that provides the Decision Maker with the jurisdiction to make the decision has been met.

The Decision of the Decision Makers under the Legislation is that the Requested Relief is granted until the coming into force of a successor or amendment to the Prohibition in the Legislation, on the condition that:

1. the Filer implements and enforces the Non-Participation Policy; and

2. upon the opening of an account with a new client and annually for all accounts, the Filer discloses the Non-Participation Policy and discloses the names of all issuers to which it applies.