Certain officers and directors of the applicantare not subject to section 25(1) of the Securities Act(Ontario) in connection with the applicant's proposed applicationfor registration as an adviser in the category of non-Canadianadviser.
Securities Act, R.S.O. 1990, c. S.5, as am.,ss.25(1) and 74(1).
Regulation made under the Securities Act, R.R.O.,Reg. 1015, as am., ss.99(2), 99(3).
Ontario Securities Commission Notice 13 - ResidencyRequirements for Advisers and Their Partners and Officers.
IN THE MATTER OF
THE SECURITIES ACT,
R.S.O. 1990, CHAPTER S. 5,AS AMENDED (the "Act")
REGULATION 1015 UNDER THESECURITIES ACT,
R.R.O. 1990, AS AMENDED (the"Regulation")
IN THE MATTER OF
ROBERT W. BAIRD & CO.INCORPORATED
(Subsection 74(1) of the Act)
UPON the application of Robert W. Baird& Co. Incorporated (the "Applicant") to the OntarioSecurities Commission (the "Commission") for an order(the "Order") pursuant to subsection 74(1) of theAct that certain officers and directors of the Applicant arenot subject to subsection 25(1) of the Act in connection withthe Applicant's proposed application for registration (the "ProposedRegistration Application") as an adviser in the categoryof non-Canadian adviser (investment counsel and portfolio manager)(the "Proposed Registration") under paragraphs 2 and3 of section 99 of the Regulation, subject to certain termsand conditions set forth below;
AND UPON considering the applicationand the recommendation of staff of the Commission;
AND UPON the Applicant having representedto the Commission that:
1. The Applicant is a Wisconsin corporationhaving its principal place of business at 777 East WisconsinAvenue, Milwaukee, Wisconsin and is a subsidiary of BairdFinancial Corporation. The Applicant's ultimate parent companyis Northwestern Mutual Life Insurance Company, a Wisconsincorporation with its head office at 720 East Wisconsin Avenue,Milwaukee, Wisconsin. Northwestern Mutual Life Insurance Companyis a mutual insurance company owned by its policyholders.
2. The Applicant is currently registered asa dealer in Ontario in the category of international dealer.
3. The Applicant is an international wealthmanagement, investment banking, asset management and privateequity firm servicing clients in the United States through88 U.S. office locations. The Applicant has approximately2,441 employees including 809 financial advisers.
4. The Applicant has 1,125 directors and officers.
5. The Applicant is proposing to make theProposed Registration Application on the basis of OntarioSecurities Commission Notice 13 - Residency Requirements forAdvisers and their Partners and Officers (17 OSCB 4206) ("Notice13").
6. Under Notice 13, a non-Canadian adviseris required to comply fully with the requirements ordinarilyapplicable to fully registered Ontario advisers, includingthe requirement of subsection 25(1) of the Act that each officerand director of the Applicant register with the Commission.
7. Of the Applicant's 1,125 directors andofficers, 1,121 will not be directly involved in the Applicant'sadvisory activities in Ontario ("Non-Counselling Officers").Only four officers of the Applicant will be directly involvedin the Applicant's Ontario advisory activities.
8. Of the Applicant's 1,121 Non-CounsellingOfficers, 1,096 would not reasonably be considered to be directorsor senior officers of the Applicant from a functional pointof view. These officers have the title "vice president"or a similar title and are not in charge of a principal businessunit, division or function of the Applicant (the "NominalOfficers"). Only 25 of the Applicant's Non-CounsellingOfficers actually exercise a director or senior officer functionfor the Applicant. Of these 25 directors and senior or executiveofficers, only two are involved in the Applicant's U.S. advisorybusiness. The other 23 are involved in the Applicant's otherbusinesses such as mergers and acquisitions, broker-dealer,equity research, investment banking, capital markets, andequity and fixed income trading. For U.S. reporting purposes,the Applicant only considers the Chairman, President and ChiefExecutive Officer, Secretary, Chief Financial Officer andAssistant Secretary of the Applicant to be executive officers.
9. The Applicant is proposing to registerfour officers as counselling officers of the Applicant inOntario ("Counselling Officers") under the ProposedRegistration. The Counselling Officers will include at leastone designated compliance officer for the purpose of OntarioSecurities Commission Rule 31-505 Conditions of Registration(the "Designated Compliance Officer").
10. Each applicant as Counselling Officerwill complete and execute an application for registration.The Counselling Officers will be the officers of the Applicantwho will be directly involved in the Applicant's Canadianadvisory activities.
11. In the absence of the requested Order,paragraph (c) of subsection 25(1) of the Act would requirethat each of the Applicant's 1,121 directors and officers,including the Applicant's Non-Counselling Officers and NominalOfficers register with the Commission as a director or officerof the Applicant in conjunction with the Proposed RegistrationApplication. These individual registrations would need alsoto be amended on a constant basis to ensure that current informationwas on file with the Commission.
12. The requirement that each of the Applicant'sNon-Counselling Officers comply with the Adviser RegistrationRequirement would impose an administrative and complianceburden on the Applicant in preparing and processing theseapplications that would be unduly onerous and disproportionateto the scope of the Applicant's proposed advisory activitiesin Canada.
13. In the absence of the requested Order,the requirement that all of the Applicant's 1,121 Non-CounsellingOfficers and Nominal Officers comply with the Adviser RegistrationRequirement would effectively preclude the Applicant fromundertaking the Proposed Registration Application.
AND UPON being satisfied that it couldnot be prejudicial to the public interest for the Commissionto make the requested Order on the basis of the terms and conditionsproposed,
IT IS ORDERED pursuant to subsection74(1) of the Act that each Non-Counselling Officer of the Applicantbe exempted from subsection 25(1) of the Act in connection withthe Proposed Registration Application, subject to complianceby the Applicant with the following terms and conditions:
(a) That the Applicant cause all of itsdirectors and officers who would be carrying on advisoryactivities in Ontario to register as Counselling Officers;
(b) That the Applicant cause any new officersand directors who would be carrying on advisory activitiesin Ontario, and any Non-Counselling Officers, includingany Nominal Officers who subsequently become directly involvedin advisory activities in Ontario, to register as CounsellingOfficers; and
(c) That the Designated Compliance Officermonitor and supervise the Ontario advisory activities ofthe Applicant's Counselling Officers with respect to compliancewith Ontario securities laws and the conditions of the Applicant'sregistration as an adviser in Ontario.
August 30, 2002.
"Howard I. Wetston" "RobertW. Korthals"