HeadnoteSection80 of the Commodity Futures Act - relief for Schedule III backfrom the requirement to register as an adviser where the performanceof the service as an adviser is incidental to the principal bankingbusiness.
StatutesCitedCommodityFutures Act, R.S.O. 1990, c.C20, as am., sections 22(1)(b), 80
INTHE MATTER OF
THECOMMODITY FUTURES ACT,
R.S.O.1990, CHAPTER C. 20, AS AMENDED (the "Act")
INTHE MATTER OF
ABNAMRO BANK N.V.
UPONapplication (the "Application") by ABN AMRO Bank N.V.("ABN AMRO") to the Ontario Securities Commission (the "Commission")for an order pursuant to section 80 of the Act exempting ABNAMRO from the requirement to obtain registration as an adviserunder clause 22(1)(b) of the Act in connection with the bankingbusiness to be carried on by ABN AMRO in Ontario;
ANDUPON considering the Application and the recommendationof the staff of the Commission;
ANDUPON ABN AMRO having represented to the Commissionthat:
1.ABN AMRO is organized under the laws of the Netherlands. Theprincipal office of ABN AMRO is located in the Netherlands.
2.ABN AMRO is the fifth largest European banking group and, togetherwith its subsidiaries, provides a comprehensive range of financialservices including corporate and investment banking, lease andtrade financing, venture capital and asset management and investmentmanagement services.
3.ABN AMRO has approximately 1,000 branches in the Netherlands.ABN AMRO also has operations in approximately 60 countries outsidethe Netherlands. In Canada, ABN AMRO has a wholly-owned subsidiary,ABN AMRO Bank Canada, which is a Schedule II chartered bankunder the Bank Act (Canada) (the "Bank Act").
4.Recent amendments to the Bank Act permit foreign banks to operatedirectly in Canada through branches, rather than separate subsidiarySchedule II banks.
5.On October 5, 2000, ABN AMRO submitted an application (the "BankAct Application") to the Office of the Superintendent of FinancialInstitutions Canada ("OSFI") for an order establishing a fullservice foreign bank branch in Canada and for an order approvingthe commencement and carrying on of business in Canada pursuantto sections 524 and 534 of the Bank Act, respectively. ABN AMROexpects that these orders will be granted by OSFI on or aboutDecember 31, 2001.
6.Upon approval of the Bank Act Application, ABN AMRO will establishand commence business as a foreign bank branch under the BankAct.
7.The operations of ABN AMRO's foreign bank branch will be primarilycomprised of wholesale deposit-taking, corporate and commerciallending, leasing and related treasury functions (the "PrincipalBanking Business").
8.ABN AMRO intends to provide products and services in its PrincipalBanking Business primarily to the following clients:
(a) Her Majesty in right of Canada or in right of a provinceor a territory, an agent of Her Majesty in either of those rightsand includes a municipal or public body empowered to performa function of government in Canada, or an entity controlledby Her Majesty in either of those rights;
(b) the government of a foreign country or any political subdivisionthereof, an agency of the government of a foreign country orany political subdivision thereof, or an entity that is controlledby the government of a foreign country or any political subdivisionthereof;
(c) an international agency of which Canada is a member, includingan international agency that is a member of the World Bank Group,the Inter-American Development Bank, the Asian Development Bank,the Caribbean Development Bank and the European Bank for Reconstructionand Development and any other international regional bank;
(d) a financial institution (i.e. (a) a bank or an authorizedforeign bank under the Bank Act; (b) a body corporate to whichthe Trust and Loan Companies Act (Canada) applies,(c) an association to which the Cooperative Credit AssociationAct (Canada) applies, (d) an insurance company or fraternalbenefit society to which the Insurance Companies Act(Canada) applies, (e) a trust, loan or insurance corporationincorporated by or under an Act of the legislature of a provinceor territory in Canada, (f) a cooperative credit society incorporatedand regulated by or under an Act of the legislature of a provinceor territory in Canada, (g) an entity that is incorporated orformed by or under an Act of Parliament or of the legislatureof a province or territory in Canada that is primarily engagedin dealing in securities, including portfolio management andinvestment counselling and is registered to act in such capacityunder the applicable legislation, and (h) a foreign institutionthat is (i) engaged in the banking, trust, loan or insurancebusiness, the business of a cooperative credit society or thebusiness of dealing in securities or is otherwise engaged primarilyin the business of providing financial services, and (ii) isincorporated or formed otherwise than by or under an Act ofParliament or of the legislature of a province or territoryin Canada);
(e) a pension fund sponsored by an employer for the benefitof its employees or employees of an affiliate that is registeredand has total plan assets under administration of greater than$100 million;
(f) a mutual fund corporation that is regulated under an Actof the legislature of a province or territory in Canada or underthe laws of any other jurisdiction and has total assets underadministration of greater than $10 million;
(g) an entity (other than an individual) that has gross revenueson its own books and records of greater than $5 million as ofthe date of its most recent annual financial statements; or
(h) any other person with respect to a trade in a security whichhas an aggregate acquisition cost to the purchaser of greaterthan $150,000.
9.ABN AMRO's foreign bank branch will be performing certain foreignexchange advisory services in connection with its PrincipalBanking Business.
10.Banks chartered under Schedules I and II to the Bank Act areexempt from the registration requirement of paragraph 22(1)(b)of the Act. However, since ABN AMRO's foreign bank branch willnot be chartered under Schedule I or II to the Bank Act, theregistration exemption under the Act is not available to it.
11.In order to ensure that ABN AMRO, as an entity listed on ScheduleIII to the Bank Act, will be able to provide banking servicesto businesses in Ontario, it requires the registration exemptioncurrently enjoyed by banking institutions incorporated underthe Bank Act to the extent that the registration exemption applicableto such banking institutions under the Act is relevant to thebanking business to be undertaken by ABN AMRO in Ontario.
AND UPON the Commission being satisfied that to doso would not be prejudicial to the public interest;
ITIS ORDERED pursuant to section 80 of the Act that,upon the making of an order by OSFI under the Bank Act permittingABN AMRO to establish a branch listed in Schedule III to theBank Act, ABN AMRO is exempt from the registration requirementof clause 22(1)(b) of the Act where the performance of the serviceas an adviser is solely incidental to ABN AMRO's Principal BankingBusiness in Ontario.
"PaulMoore" "Robert W. Korthals"