Securities Law & Instruments

Headnote

Decision pursuant to section 4.1 of Ontario Securities Commission Rule 31-505 forexemption from the suitability requirements under paragraph 1.5(b) subject to certainterms and conditions.

Rules Cited

Ontario Securities Commission Rule 31-505 "Conditions of Registration" (1999) 22O.S.C.B. 731.


IN THE MATTER OF THE SECURITIES ACT
R.S.O. 1990, c. S.5, AS AMENDED

AND

IN THE MATTER OF
SWIFT TRADE SECURITIES INC.

DECISION
(Rule 31-505)


On January 19, 2000, Swift Trade Securities Inc. ("Swift Trade") made an applicationpursuant to section 4.1 of Ontario Securities Commission Rule 31-505 for exemptionfrom the suitability requirements under paragraph 1.5(b).

In the application Swift Trade has made the following representations:

1. Prospective customers must complete a two week theory course, followed by athree-hour exam on which a grade of 70% is required to proceed to a four weekpractical course, which is also followed by an exam which requires a grade of70% to pass. Only by passing both courses are customers permitted to use theSwift Trade trading facilities.

2. Approved customers are required to provide a minimum initial deposit of U.S.$25,000 to open an account. A customer is not permitted to trade if his or heraccount is below U.S. $15,000.

3. Customers are required to sign a Customer Acknowledgement form whichindicates that day trading is speculative, that it is possible to lose all, part of ormore than one's investment.

4. The trading software used by customers does not permit over-margined trades.

5. Swift Trade does not advise its clients with respect to specific investments.

Based on the above and the other representations made in the application of January19, 2000, the Director hereby grants Swift Trade an exemption from the application ofparagraph 1.5(1)(b) of Rule 31-505 on an order-by-order basis subject to the followingconditions:

1. Swift Trade must exercise diligence in ascertaining the financial circumstances(including investment experience and investment objectives) of a prospectivecustomer in order to determine whether a day trading strategy is suitable for thecustomer;

2. Swift Trade must exercise diligence in ascertaining whether the financialcircumstances of a customer have changed such that continuing to pursue a daytrading strategy is no longer suitable for the customer;

3. Swift Trade must exercise diligence to ensure that each customer understandsthe operation of Swift Trade's order execution systems and procedures;

4. Swift Trade must exercise diligence to ensure that each customer understandsthe risk associated with day trading by (i) providing each customer with aseparate disclosure statement indicating the risks of day trading, and (ii)providing each customer with training to ensure that each customer understandsthe fundamentals of day trading.

"William R. Gazzard"