HeadnoteRule31-507 - Section 4.1 extension of time frame in which to becomea SRO member - registrant working diligently with IDA to completeapplication.
RuleCitedOSCRule 31-507 - SRO Membership - Securities Dealers and Brokers
INTHE MATTER OF
R.S.O.1990, c.S.5, AS AMENDED (the "Act")
INTHE MATTER OF
RULE31-507 ("RULE 31-507")
SROMEMBERSHIP - SECURITIES DEALERS AND BROKERS
INTHE MATTER OF
RCOCWEALTH MANAGEMENT INC.
(Section4.1 of Rule 31-507)
UPON RCOC Wealth Management Inc. (the "Applicant")having made an application (the "Application") to the Directorof the Ontario Securities Commission (the "Commission") fora decision pursuant to section 4.1 of Rule 31-507 to exemptthe Applicant from the application of sections 1.1(1) and 2.2of Rule 31-507 which would require the Applicant to be a memberof a self-regulatory organization ("SRO") recognized by theCommission under section 21.1 of the Act on or before December31, 2001;
AND UPON considering the Application and therecommendation of staff of the Commission;
AND UPON the Applicant having represented tothe Director that:
1.The Applicant is a corporation incorporated under the BusinessCorporations Act (Ontario) and is not a reporting issuerin any of the provinces or territories of Canada or in any otherjurisdiction.
2.The Applicant is registered under the Act as a dealer in thecategory of "securities dealer".
3.The Applicant's registration under the Act as a dealer in thecategory of "securities dealer" is subject to renewal on December31, 2001 (the "Renewal Date").
4.In compliance with section 3.1 of Rule 31-507, the Applicantprovided notice to the Investment Dealers Association of Canada(the "IDA") by letter dated December 27, 2000 of the Applicant'sintention to seek membership in the IDA.
5.Completion of the Applicant's application for IDA membership(the "IDA Application") was delayed during the period whilethe Applicant considered its alternatives, including surrenderingits registration, re-registering in another registration categoryand the feasibility of IDA membership.
6.Completion of the IDA Application was further delayed when theApplicant's Vice-President, Operations left the Applicant'semploy soon after the Applicant decided to pursue IDA membership.
7.To date, the Applicant has been unable to fulfil the capitalrequirements of IDA membership.
8.After discussions with Berkshire Securities Inc. ("BSI"), aregistered dealer that is a member in good standing with theIDA, the Applicant has decided to discontinue its pursuit ofIDA membership and to instead surrender its registration afterthe wind down of its securities dealer activities, includingthe transfer of the Applicant's client accounts to BSI.
9.In the absence of the Decision, sections 1.1(1) and 2.2 of Rule31-507 would have the effect of requiring the Applicant, onor before the Renewal Date, to be a member of the IDA or theMutual Fund Dealers Association of Canada, and to change itsregistration category to that of investment dealer or mutualfund dealer, as applicable.
10.The Applicant is diligently negotiating with BSI to ensure theorderly wind down of the Applicant's securities dealer activities,including the transfer of the Applicant's client accounts toBSI.
11.The Applicant has advised its clients that it is winding downits business and that each client has the option of transferringhis or her accounts to BSI or to any other dealer as requestedby the client.
12.The wind down of the Applicant's securities dealer activities,including the transfer of the Applicant's client accounts toBSI will not be completed prior to the Renewal Date.
13.The Applicant requires its registration as a "securities dealer"under the Act to continue until the completion of the wind downof the Applicant's securities dealer activities, including thetransfer of the Applicant's client accounts to BSI.
14.The Applicant has agreed to the terms and conditions on itsregistration set out in Schedule "A" effective as of the dateof this Exemption.
AND UPON the Director being satisfied thatto do so would not be prejudicial to the public interest;
IT IS THE DECISION OF THE DIRECTOR, pursuantto section 4.1 of Rule 31-507, that, the Applicant is herebyexempt from the requirements of sections 1.1(1) and 2.2 of Rule31-507 that it be a member of a SRO recognized by the Commissionunder section 21.1 of the Act on or before the Renewal Date,provided that this exemption shall terminate on the date thatis the earlier of:
(1) the date on which the wind down of the Applicant's securitiesdealer activities has been completed, including the transferof all the Applicant's client accounts to BSI; and
(2) April 1, 2002.
December 28, 2001.
"Robert F. Kohl"
TERMSAND CONDITIONS ON THE REGISTRATION
OFRCOC WEALTH MANAGEMENT INC.
1.RCOC Wealth Management Inc. will not open a new account forany person or company that did not already have one or moreactive accounts at RCOC Wealth Management Inc. on December 31,2001.