Securities Law & Instruments

Headnote

Exemption pursuant to section 15.1 of NationalInstrument 21-101 Marketplace Operation and section 12.1 ofNational Instrument 23-101 Trading Rules from the requirementto comply with National Instrument 21-101 and National Instrument23-101 until the earlier of September 2, 2002 and the date onwhich Bloomberg Tradebook Canada is in a position to complywith all of the re1quirements of the ATS Rules.

IN THE MATTER OF

NATIONAL INSTRUMENT 21-101MARKETPLACE OPERATION

AND NATIONAL INSTRUMENT 23-101TRADING RULES

AND

IN THE MATTER OF

THE MUTUAL RELIANCE REVIEWSYSTEM

FOR EXEMPTIVE RELIEF APPLICATIONS

AND

IN THE MATTER OF

BLOOMBERG TRADEBOOK LLC AND

BLOOMBERG TRADEBOOK CANADACOMPANY

 

MRRS DECISION DOCUMENT

WHEREAS the securities regulatory authorityor regulator in each of the Provinces of British Columbia, Alberta,Ontario and Quebec (each, a "Decision Maker") hasreceived an application from Bloomberg Tradebook LLC ("TradebookLLC") for a decision under section 15.1 of National Instrument21-101 Marketplace Operation and section 12.1 of National Instrument23-101 Trading Rules that the requirement to comply with NationalInstrument 21-101 Marketplace Operation and National Instrument23-101 Trading Rules (together, the "ATS Rules") doesnot apply to Bloomberg Tradebook LLC ("Tradebook LLC")until the earlier of September 2, 2002 and the date on whichBloomberg Tradebook Canada Company ("Bloomberg TradebookCanada") is in a position to comply with all of the requirementsof the ATS Rules;

AND WHEREAS pursuant to the Mutual RelianceReview System for Exemptive Relief Applications (the "System")the Ontario Securities Commission is the principal regulatorfor this application;

AND WHEREAS Tradebook LLC and BloombergTradebook Canada have represented to the Decision Makers that:

1. Tradebook LLC was formed under the lawsof the State of Delaware on March 28, 1996 and is registeredas an international dealer under the Securities Act(Ontario) and as a securities dealer under the SecuritiesAct (British Columbia). Tradebook LLC's members are BloombergL.P., as to a 99% membership interest, and Bloomberg T-Book,Inc., as to a 1% membership interest. Bloomberg L.P. is aDelaware limited partnership and Bloomberg T-Book, Inc. isa Delaware corporation.

2. Bloomberg Tradebook Canada is a Nova Scotiaunlimited liability company incorporated on February 15, 2001and is 100% owned by Bloomberg Canada LLC, a Delaware limitedliability company, formed on February 1, 2001. Bloomberg CanadaLLC is 100% owned by Bloomberg L.P.

3. Tradebook LLC markets and offers the BloombergTradebook System, an electronic trading system in equity andfixed income securities. Although approximately 90% of itsactivity is limited to order-routing, it does have an internalorder-matching facility which constitutes it as an alternativetrading system (an "ATS") under the ATS Rules. TradebookLLC also markets and offers the Bloomberg BondTrader System,an electronic bulletin board system on which securities dealersdisplay quotations in government fixed-income securities.Tradebook LLC offers the Bloomberg Tradebook System and BloombergBondTrader System to institutional investors, brokers anddealers located in the Provinces of Ontario, British Columbia,Quebec and Alberta.

4. Following the publication of the ATS Ruleson August 17, 2001, Bloomberg Tradebook Canada initiated proceedingsto obtain membership in the Investment Dealers' Associationof Canada (the "IDA") and registration as an investmentdealer in order to comply with the requirements of the ATSRules. Bloomberg Tradebook Canada will assume from TradebookLLC the responsibility for offering the Bloomberg TradebookSystem and Bloomberg BondTrader System to Canadian brokers,dealers and institutional investors as soon as it obtainssuch registrations and membership and is able to comply withthe other requirements of the ATS Rules.

5. Bloomberg Tradebook Canada filed its applicationmaterial with the Toronto office of the IDA in October, 2001.Bloomberg Tradebook Canada continues to diligently pursuesatisfaction of IDA membership requirements. Bloomberg TradebookCanada has also applied for registration as an investmentdealer in the Provinces of Ontario, Quebec, British Columbiaand Alberta.

6. On December 21, 2001, Bloomberg TradebookCanada filed Form 21-101F2 (Initial Operations Report) withthe securities regulatory authorities in British Columbia,Alberta, Ontario and Quebec.

7. Tradebook LLC and Bloomberg Tradebook Canadaare diligently pursuing satisfaction of the other requirementsof the ATS Rules and have had on-going discussions with staffof the Ontario Securities Commission regarding complianceand related issues under the ATS Rules.

8. In connection with its international dealerregistration, Tradebook LLC is required to comply with certainterms and condition of registration, including a restrictionon categories of clients. Tradebook LLC restricts its clientsin British Columbia and will continue to restrict its clientsin British Columbia to such categories of clients as are permittedunder its international dealer registration.

9. The ATS Rules came into force on December1, 2001. On December 1, 2001, the securities regulatory authorityin each of the provinces of British Columbia, Alberta, Ontarioand Quebec granted Tradebook LLC an exemption from the requirementsof the ATS Rules until the earlier of April 1, 2002 and thedate on which Bloomberg Tradebook Canada is in a positionto comply with all of the requirements of the ATS Rules. Anextension to the earlier of July 1, 2002 and the date on whichBloomberg Tradebook Canada is in a position to comply withall the requirements of the ATS Rules was granted on April3, 2002. A further extension to the earlier of August 1, 2002and the date on which Bloomberg Tradebook Canada is in a positionto comply with all of the requirements of the ATS Rules wasgranted on July 2, 2002.

AND WHEREAS pursuant to the System thisMRRS Decision Document evidences the decision of each DecisionMaker (collectively, the "Decision");

AND WHEREAS each of the Decision Makersare satisfied that the test contained in the ATS Rules thatprovides the Decision Maker with the jurisdiction to make theDecision has been met;

THE DECISION of the Decision Makers isthat Tradebook LLC is exempt from the requirements of the ATSRules until the earlier of September 2, 2002 and the date onwhich Bloomberg Tradebook Canada is in a position to complywith all of the requirements of the ATS Rules.

August 2, 2002.

"Randee B. Pavalow"