The Applicant and its representatives in theApplicant's Canadian call centre are exempted from the registrationrequirements and the prospectus requirements contained in theLegislation, to permit them to deal with certain clients underNational Instrument 35-101 - Conditional Exemption from Registrationfor United States Broker-Dealers and Agents.
Securities Act, R.S.O. 1990, c. S.5, as amendedss. 25(1), 74(1).
National Instrument 35-101 - Conditional Exemptionfrom Registration for United States Broker-Dealers and Agents.
IN THE MATTER OF
THE SECURITIES LEGISLATIONOF
BRITISH COLUMBIA, ALBERTA,SASKATCHEWAN, MANITOBA,
ONTARIO, QUEBEC, NEW BRUNSWICK,PRINCE EDWARD ISLAND,
NOVA SCOTIA AND NEWFOUNDLANDAND LABRADOR
IN THE MATTER OF
THE MUTUAL RELIANCE REVIEWSYSTEM
FOR EXEMPTIVE RELIEF APPLICATIONS
IN THE MATTER OF
TD WATERHOUSE INVESTOR SERVICES,INC.
MRRS DECISION DOCUMENT
WHEREAS the local securities regulatoryauthority or regulator (the "Decision Maker") in eachof British Columbia, Alberta, Saskatchewan, Manitoba, Ontario,Quebec, New Brunswick, Prince Edward Island, Nova Scotia andNewfoundland and Labrador (the "Jurisdictions") hasreceived an application from TD Waterhouse Investor Services,Inc. ("TDW") for a decision pursuant to the securitieslegislation of the Jurisdictions (the "Legislation")exempting TDW and its agents from the dealer, adviser and underwriterregistration requirements contained in the Legislation (the"Registration Requirements") and the prospectus requirementcontained in the Legislation (the "Prospectus Requirement")so as to permit them to deal with the individuals ("NI35-101 Clients") referred to in section 2.1 of NationalInstrument 35-101 - Conditional Exemption from Registrationfor United States Broker-Dealers and Agents ("NI 35-101")provided such dealings are conducted in accordance with allterms and conditions of NI 35-101 save and except for the requirementthat TDW has no office or physical presence in any jurisdictionof Canada.
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 it has been represented byTDW to the Decision Makers that:
1. TDW is a corporation incorporated underthe laws of the State of New York, U.S.A. and is a whollyowned indirect subsidiary of The Toronto-Dominion Bank ("TDBank"), a bank listed on Schedule I of the Bank Act(Canada).
2. The head office of TDW is in New York,New York, U.S.A.
3. TDW is registered as a broker-dealer withthe United States Securities and Exchange Commission pursuantto Section 15(b) of the Securities Exchange Act of1934 as amended, to carry on business as a broker-dealer inthe United States of America ("U.S.A.").
4. TDW is proposing to transfer a portionof its broker call centre operations to an office in London,Ontario that it will operate through TD Waterhouse CanadianCall Center Inc., a wholly owned subsidiary of TDW incorporatedunder the laws of Ontario. This office will be a call centre(the "London Call Centre") dedicated to answeringinbound phone calls from clients of TDW who are not residentsof Canada ("Non-Canadian Clients") and will nototherwise be accessible to or by any person or company otherthan TDW and its associates and affiliates.
5. The scope of the London Call Centre's operationswill initially consist of responding to inbound Non-CanadianClient calls, providing information on market activities anddevelopments and company products and services, customer accountinformation, technical support and Web access support, providingstock market quotes and answering customer inquiries aboutmarket/account activity. Representatives of TDW (the "Representatives")will not initially take orders since the calls to be directedto the London Call Centre will be limited to customer serviceenquiries that can be resolved administratively.
6. The Representatives will not be, and willnot initially be required to be, registered under U.S.A. securitieslaw, although they will be finger-printed and required tofollow the employee screening procedures employed by TDW forits non-registered personnel in the U.S.A.
7. The London Call centre will be operatedin accordance with all applicable rules established by thevarious U.S.A. regulatory authorities, including the SEC andthe New York Stock Exchange (the "NYSE"). The LondonCall Centre will be subject to the same procedures set inplace for TDW's existing U.S.A. business, it will be examinedat least annually by representatives from TDW's compliancestaff in New York, and it will be supervised by one or moreproperly qualified individuals acceptable to the NYSE.
8. Eventually, the Representatives will beregistered under U.S. securities law in order to enable themto accept and route, but not execute, trading orders. TheLondon Call Centre will remain dedicated to answering inboundphone calls from Non-Canadian Clients and NI 35-101 Clients.
9. TDW and the Representatives will not dealwith or on behalf of persons or companies who are residentin Canada except for NI 35-101 Clients in accordance withNI 35-101 other than the requirement that TDW have no officeor physical presence in any jurisdiction of Canada.
10. TDW and the Representatives who work inthe London Call Centre on behalf of TDW in respect of tradeswith or on behalf of Non-Canadian Clients and NI 35-101 Clientswill comply with all registration and other requirements ofapplicable securities legislation in the U.S.A.
11. The London Call Centre will be an opaquepresence inaccessible to any person or company other thanNon-Canadian Clients and NI 35-101 Clients whose calls aredirected to the London Call Centre by TDW.
12. The Ontario Securities Commission (the"OSC") has issued a ruling (the "Ontario Ruling")pursuant to subsection 74(1) of the Act providing that
(a) the Representatives working in the LondonCall Centre shall not be subject to the requirements ofparagraph 25(1)(a) of the Act where the Representativesact on behalf of TDW in respect of trades in securitieswith or on behalf of Non-Canadian Clients, provided thatthe Representatives comply with all registration and otherrequirements of applicable securities legislation in theU.S.A.; and
(b) TDW shall not be subject to the requirementsof paragraph 25(1)(a) of the Act with respect to tradingby it through the London Call Centre in securities withor on behalf of Non-Canadian Clients, provided that:
(i) a Representative working in the LondonCall Centre acts on behalf of TDW in respect of such trading;and
(ii) TDW complies with all registrationand other requirements of applicable securities legislationin the U.S.A.
13. TDW currently relies on NI 35-101 forthe purposes of dealing with NI 35-101 Clients, however, section2.1 of NI 35-101 requires that TDW have "no office orphysical presence in any jurisdiction" of Canada.
14. As a consequence of the trading activitythat would be accommodated by the Ontario Ruling, TDW willtechnically no longer be able to continue to rely on NI 35-101as it may be argued that TDW has an office or other physicalpresence in Canada as a portion of its broker call centreoperations will be located in London, Ontario.
AND WHEREAS pursuant to the System thisMRRS Decision Document evidences the decision of each DecisionMaker (collectively, the "Decision");
AND WHEREAS each of the Decision Makersis satisfied that the tests contained in the Legislation thatprovides the Decision Maker with the jurisdiction to make theDecision has been met;
THE DECISION of the Decision Makers pursuantto the Legislation is that the Registration Requirement andthe Prospectus Requirement shall not apply to TDW and its agentsso as to permit them to deal with NI 35-101 Clients providedsuch dealings are conducted in accordance with all terms andconditions of NI 35-101 save and except for the requirementthat TDW has no office or physical presence in any jurisdictionof Canada, and provided that the only office or physical presencethat TDW has in Canada is the London Call Centre.
July 26, 2002.
"Paul M. Moore" "RobertL. Shirriff"