A U.S. sub-adviser who is retained by a B.C. Manager relying on the exemptionfrom registration in Ontario provided in section VI.4 of OSC Policy 4.8 Non ResidentAdvisers, is not subject to the requirements of paragraph 25(1)(c) of the Act toregister as an adviser in Ontario, subject to certain conditions.
Securities Act, R.S.O. 1990, c. S.5, as amended, ss. 25(1)(c), 74(1).
R.S.O. 1990, c.S.5, AS AMENDED (the "Act")
IN THE MATTER OF
ROCKEFELLER & CO., INC.
UPON the application of Rockefeller & Co., Inc. ("Rockefeller") to the OntarioSecurities Commission (the "Commission") for a ruling, pursuant to section 74(1) of theAct, that certain investment advisery services provided by Rockefeller are not subjectto section 25 of the Act;
AND UPON considering the application and the recommendation of the staff ofthe Commission;
AND UPON Rockefeller having represented to the Commission as follows:
1. The Applicant , which is incorporated under the laws of the State of New York,is registered with the United States Securities and Exchange Commission("SEC") as a SEC registered investment adviser. The Applicant does not havea place of business in the Province of Ontario with partners or officers residentin Ontario who are acting as advisers on its behalf in Ontario and is thus a non-resident adviser as such term is used in OSC Policy 4.8 (as defined below).
2. Ethical Funds Inc. (the "Manager") has advised the Applicant that it is registeredin the Province of British Columbia as an adviser in the category of portfoliomanager.
3. The Manager has advised the Applicant that it is the manager of EthicalCanadian Equity Fund, Ethical RSP North American Equity Fund, Ethical GlobalEquity Fund, Ethical RSP Global Equity Fund, Credential Income and GrowthPortfolio, Credential Balanced Portfolio, Credential Growth Portfolio andCredential Equity Portfolio organized under the laws of British Columbia (the"BC Funds"), in respect of which a simplified prospectus dated December 22,1999 was filed in British Columbia and Ontario and certain other jurisdictions,and that it acts as portfolio manager of the BC Funds.
4. The Manager has advised the Applicant that the simplified prospectus of the BCFunds discloses that the Manager may retain sub-advisers who are foreignresidents and that the Manager will remain liable for all portfolio advice providedand as well that the enforcement of legal rights against any such sub-advisermay be impaired as a result of its residency outside Canada.
5. The Applicant anticipates being retained by the Manager as a sub-adviser toprovide investment advice with respect to Ethical Global Equity Fund and maybe retained by the Manager as a sub-adviser with respect to other mutual fundscomprising the BC Funds or other mutual funds that do not have an address inOntario in respect of which the Manager acts as manager, including as portfoliomanager, (collectively, the "Manager's BC Funds").
6. The Manager has advised the Applicant that it will not be registered as anadviser in the Province of Ontario and, in connection with the offering of theunits of the BC Funds in the Province of Ontario, will rely on the exemption fromregistration provided in Section VI.4. of OSC Policy 4.8 Non Resident Advisers("OSC Policy 4.8").
7. Contemporaneously with the making of this Application, the Applicant hasapplied for an exemption from the requirement to register as an adviser in theProvince of British Columbia in connection with its anticipated activities as asub-adviser to the Manager in respect of the Manager's BC Funds (its "BCSubadvisory Activities") and it anticipates being granted such exemptive relief.Were the Applicant to register in the Province of British Columbia as an adviserin connection with its BC Subadvisory Activities, rather than relying on theexemptive relief anticipated to be provided by the British Columbia SecuritiesCommission, the Applicant would rely on the exemption from registration inSection VI.4. of OSC Policy 4.8 when units of the Manager's BC Funds weredistributed to investors in the Province of Ontario.
AND UPON the Commission being of the opinion that to do so would not beprejudicial to the public interest;
IT IS RULED, pursuant to subsection 74(1) of the Act, that in connection with itsinvestment advisery activities in relation to its BC Subadvisory Activities, Rockefelleris not subject to the requirements of paragraph 25(1)(c) of the Act to register as anadviser,
(a) the Manager is registered in the Province of British Columbia as an adviser,
(b) the obligations and duties of Rockefeller are set out in a written agreement withthe Manager that contains an agreement of the Manager to the matters outlinedbelow in condition (c); and
(c) the simplified prospectus of the Manager's BC Funds in respect of whichRockefeller is performing its BC Subadvisory Activities provides that theManager will remain liable for the portfolio or investment advice provided byRockefeller or the Manager otherwise agrees, in a document providing rights tothe unitholders of the Manager's BC Funds in respect of which Rockefeller isperforming its BC Subadvisory Activities, to be responsible for the advicereceived from Rockefeller, and this responsibility is not waived.
January 7th, 2000.
"Howard I. Wetston" "R. Stephen Paddon"