Securities Law & Instruments

Headnote

Section 80 of the Commodity Futures Act - relieffor Schedule III bank from requirement to register as an adviserwhere the performance of the service as an adviser is incidentalto principal banking business.

Statutes Cited

Commodity Futures Act, R.S.O. 1990, c. S.20,as am., sections 22(1)(b), 80.

Other

Section 74 Relief - Schedule III Banks.

IN THE MATTER OF

THE COMMODITY FUTURES ACT,

R.S.O. 1990, CHAPTER S.20,AS AMENDED

(the "Act")

AND

IN THE MATTER OF

WESTLB AG

 

ORDER

(Section 80)

UPON application (the "Application")by WestLB AG ("WestLB") to the Ontario SecuritiesCommission (the "Commission") for an order pursuantto section 80 of the Act exempting WestLB from the requirementto obtain registration as an adviser under clause 22(1)(b) ofthe Act in connection with the banking business to be carriedon by WestLB in Ontario;

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

AND UPON WestLB having represented tothe Commission that:

1. WestLB is a joint stock corporation dulyorganized and existing under the laws of the Federal Republicof Germany and is a validly existing banking organizationunder the banking laws of the Federal Republic of Germany;

2. WestLB has an extensive international branchnetwork. WestLB currently maintains a representative officein Toronto, Ontario. WestLB intends to participate in theCanadian domestic loan and structured finance markets by establishinga foreign bank lending branch;

3. In March, 2002, WestLB made an application(the "Bank Act Application") to the Office of theSuperintendent of Financial Institutions Canada ("OSFI")for an order under the Bank Act (Canada) (the "BankAct") permitting it to establish a lending branch underthe Bank Act and designating it on Schedule III to the BankAct;

4. Upon approval of the Bank Act Applicationand receipt of an order from the Superintendent of FinancialInstitutions approving the commencement and carrying on ofbusiness in Canada, WestLB will establish itself and commencebusiness as a foreign bank branch under the Bank Act;

5. Section 31(a) of the Act refers to a "banklisted on Schedule I or II to the Bank Act" in connectionwith the exemption from the adviser registration requirement,however no reference is made in the Act to entities listedon Schedule III to the Bank Act;

6. In order to ensure that WestLB, as an entityto be listed on Schedule III to the Bank Act, is able to providebanking services to businesses in Ontario it requires similarexemptions enjoyed by banking institutions incorporated underthe Bank Act to the extent that the current exemptions applicableto such banking institutions are relevant to the banking businessbeing undertaken by WestLB in Ontario;

7. WestLB will be performing certain foreignexchange advisory services in connection with its principalbanking business;

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

IT IS RULED pursuant to section 80 ofthe Act that, in connection with the authorized foreign bankingactivities to be carried on by WestLB in Ontario, WestLB isexempt from the requirement of clause 22(1)(b) of the Act wherethe performance of the service as adviser is solely incidentalto WestLB's principal banking business.

November 19, 2002.

"Robert W. Korthals"                    "HaroldP. Hands"