MRRS - Revocation of original MRRS decisiondocuments granting relief from suitability review requirements,which will no longer be relied upon now that IDA suitabilityexempt regime has been adopted.
Applicable Ontario Statutory Provisions
Securities Act, R.S.O. 1990, c.S.5, as am s.21.1(4), 144.
IDA Regulations Cited
IDA Regulation 1300.1(e) and (f), Policy 9.
IN THE MATTER OF
THE SECURITIES LEGISLATION OF
BRITISH COLUMBIA, ALBERTA,
SASKATCHEWAN AND ONTARIO
IN THE MATTER OF
THE MUTUAL RELIANCE REVIEW SYSTEM
FOR EXEMPTIVE RELIEF APPLICATIONS
BRITISH COLUMBIA, ALBERTA, SASKATCHEWAN AND ONTARIO
IN THE MATTER OF
SCOTIA CAPITAL INC.,
CHARLES SCHWAB CANADA, CO. AND
SCOTIA DISCOUNT BROKERAGE INC.
MRRS DECISION DOCUMENT
WHEREAS the local securities regulatoryauthority or regulator (the "Decision Maker") in eachof the provinces of British Columbia, Alberta, Saskatchewanand Ontario (the "Jurisdictions") has received anapplication from Scotia Capital Inc. (the "Filer"),Charles Schwab Canada, Co. (the "Schwab Filer") andScotia Discount Brokerage Inc. (the "SDBI Filer"),to revoke in the Jurisdictions the MRRS Decision Document datedNovember 1, 2000 IN THE MATTER OF CHARLES SCHWAB CANADA, CO.(the "Schwab Suitability Relief Order") and the MRRSDecision Document dated January 17, 2001 IN THE MATTER OF SCOTIADISCOUNT BROKERAGE INC. (the "SDBI Suitability Relief Order"),which provided, subject to terms and conditions, relief fromsuitability obligations under the securities legislation ofthe Jurisdictions and decided, subject to terms and conditions,that the suitability requirements of the Investment DealersAssociation of Canada ("IDA") do not apply to theSchwab Filer and the SDBI Filer;
AND WHEREAS the terms "SuitabilityRequirements", "IDA Suitability Requirements"and "Registered Representatives" shall each have therespective meanings ascribed thereto under the SDBI SuitabilityRelief Order and Schwab Suitability Relief Order;
AND WHEREAS, subsequent to the grantingof the Schwab Suitability Relief Order and the SDBI SuitabilityRelief Order, the IDA enacted amendments in September, 2001to the IDA Suitability Requirements and enacted IDA Policy No.9, allowing member firms approved under revised IDA Regulation1300.1(e) and (f) to accept orders from customers without asuitability determination where no recommendation was providedby the member ("Amended IDA Suitability Requirements");
AND WHEREAS under the securities legislationof British Columbia, Alberta, Saskatchewan and Ontario, a memberof the IDA may comply with its Suitability Requirements by complyingwith the Amended IDA Suitability Requirements;
AND WHEREAS the Schwab Filer wishes torevoke in the Jurisdictions the Schwab Suitability Relief Order,upon IDA approval of the Filer in respect of its division, tobe known as ScotiaMcLeod Direct Investing (the "Division"),pursuant to revised IDA Regulation 1300.1(e) and (f), as anorder-execution only service;
AND WHEREAS the SDBI Filer wishes torevoke in the Jurisdictions the SDBI Suitability Relief Orderupon approval of the Filer in respect of the Division as anorder-execution only service;
AND WHEREAS under the Mutual RelianceReview System for Exemptive Relief Applications (the "System"),the Ontario Securities Commission is the principal regulatorfor this application;
AND WHEREAS the Filer has represented,on its behalf and on behalf of the Division, to the DecisionMakers that:
1. the Filer is a corporation incorporated underthe Business Corporations Act (Ontario), and is an indirectwholly-owned subsidiary of The Bank of Nova Scotia ("BNS");
2. the Filer is registered under the Legislationas an investment dealer or equivalent and is a member of theIDA;
3. BNS acquired the shares of the Schwab Filer indirectly througha share purchase of Charles Schwab Canada Holdings, Limited("Holdings") a Nova Scotia company that owned allof the outstanding equity interest of the Schwab Filer;
4. on April 30, 2002, pending regulatory approval,SDBI Filer, the Filer, the Schwab Filer and Holdings will amalgamate(the "Amalgamation") under the laws of the Provinceof Ontario under the name "Scotia Capital Inc." ("Amalco");
5. post-Amalgamation, ScotiaMcLeod Direct Investing(the "Division") will be created as a new divisionof Amalco. The discount brokerage businesses and accounts ofthe SDBI Filer and the Schwab Filer will become the discountbrokerage business and accounts of the Division. The Divisionwill be an unincorporated business unit of Amalco;
6. the "ScotiaMcLeod Direct Investing"name of the Division is a trade name of the Filer currentlybeing registered with each of the provinces and territoriesof Canada;
7. the Filer in respect of the Division hasapplied to the IDA for approval as an order-execution servicepursuant to the Amended IDA Suitability Requirements; and
8. subject to receipt of the necessary approval from the IDA,the Division will operate in accordance with the Amended IDASuitability Requirements.
AND WHEREAS under the System, this MRRSDecision Document evidences the decision of each Decision Maker(collectively, the "Decision");
AND WHEREAS each of the Decision Makersis satisfied that the test contained in the Legislation thatprovides the Decision Maker with the Jurisdiction to make theDecision has been met;
THE DECISION of the Decision Makers inBritish Columbia, Alberta, Saskatchewan and Ontario is thatthe SDBI Suitability Relief Order and the Schwab SuitabilityRelief Order are revoked on the date of the approval by theIDA, pursuant to revised IDA Regulation 1300.1(e) and (f), ofthe Filer in respect of the Division as an order-execution onlyservice.
April 30, 2002.
"Howard I. Wetston" "H.Lorne Morphy" "David M. Gilkes"