Securities Law & Instruments

 

Headnote

Application for an order pursuant to section211 of the Regulation exempting the Applicants from the provisionsof clause (d) of subsection 208(1) of the Regulation requiringthat the Applicants may only trade securities that are foreignsecurities.

IN THE MATTER OF
THE SECURITIES ACT, R.S.O. 1990,
CHAPTER S. 5, AS AMENDED (the "Act")

AND

IN THE MATTER OF
ONTARIO REGULATION 1015, R.R.O. 1990,
AS AMENDED (the "Regulation")

AND

IN THE MATTER OF
BNY ESI & CO., INC.,
B-TRADE SERVICES LLC AND
G-TRADE SERVICES LTD.

ORDER
(Section 211 of the Regulation)

UPON the application (the "Application")of BNY ESI & Co., Inc. ("BNY ESI"), B-Trade ServicesLLC ("B-Trade Services") and G-Trade Services Ltd.("G-Trade Services") (together, the "Applicants")to the Ontario Securities Commission (the "Commission")for an order (the "Order"), pursuant to section 211of the Regulation, exempting B-Trade, BNY ESI and G-Trade fromthe requirement in clause (d) of subsection 208(1) of the Regulation;

AND UPON considering the Applicationand the recommendation of staff of the Commission;

AND UPON the Applicants having representedto the Commission as follows.

1. Each of the Applicants is a subsidiary ofThe Bank of New York.

2. BNY ESI is a Delaware (U.S.) corporationbased in New York, registered with the Commission as an internationaldealer.

3. B?Trade Services is a Delaware (U.S.) limitedliability company based in New York, registered with the Commissionas an international dealer.

4. G-Trade Services is a Bermuda limited companybased in Bermuda, and is in the process of applying to the Commissionfor registration as an international dealer.

5. The Bloomberg Tradebook System is an electronictrading system in equity and debt securities. Although approximately90% of its activity in equity securities is limited to order-routing,it does have an internal order-matching facility which constitutesit as an alternative trading system (an "ATS") underNational Instrument 21-101 Marketplace Operation ("NI 21?101").
6. The Bloomberg Tradebook System will route or execute ordersin securities, including securities issued by an issuer incorporated,formed or created under the laws of Canada or any province orterritory of Canada, that are:

(a) listed on the Toronto Stock Exchange (TSX),

(b) interlisted on the TSX and a non-Canadianmarketplace, or

(c) listed on a non-Canadian marketplace butnot on the TSX (together, "Bloomberg Tradebook Equity Securities").

7. Bloomberg Tradebook LLC currently offersthe Bloomberg Tradebook System in Canada. Once all necessaryregulatory approvals have been obtained, the Bloomberg TradebookSystem will be offered in Canada by Bloomberg Tradebook CanadaCompany ("Bloomberg Tradebook Canada").

8. B-Trade Services is the executing brokerand BNY ESI is the clearing broker for participants that effecttransactions in U.S. equity securities through the BloombergTradebook System, including those securities that are inter-listedon the TSX and a U.S. marketplace and are routed to or executedon a U.S. marketplace.

9. G-Trade Services is the executing and clearingbroker for participants that effect transactions in non-U.S.equity securities through the Bloomberg Tradebook System, includingthose securities that are listed only on the TSX or are inter-listedon the TSX and a non-Canadian marketplace and are routed tothe TSX.

10. Subsection 208(1) of the Regulation providesthat an international dealer may act as a market intermediarysolely for the purposes of, amongst other things, trading witha designated institution in "foreign securities",as defined in subsection 204(1). Whether a security is or isnot a "foreign security" does not depend upon wherethe security is listed. The definition of "foreign security"includes a security issued by an issuer incorporated, formedor created under the laws of a jurisdiction other than Canada,or any province or territory of Canada or a security issuedby a country other than Canada or by any political divisionof the country.

AND UPON the Commission being satisfiedthat to do so would not be prejudicial to the public interest;

IT IS ORDERED, pursuant to section 211of the Regulation, that, in connection with the registrationof the Applicants as a dealer under the Act in the categoryof "international dealer", each of the Applicantsis exempt from the provisions of clause (d) of subsection 208(1)of the Regulation requiring that the Applicants may only tradesecurities that are foreign securities, provided that the exemptiononly applies to Bloomberg Tradebook Equity Securities tradedthrough the Bloomberg Tradebook System.

September 13, 2002.

"H.L. Morphy"      "H.P. Hands"