Securities Law & Instruments

Headnote

Applicant for registration as an international dealer exempted from the requirement in subsection 208(2) of the Regulation that it carry on the business of an underwriter in a country other than Canada where applicant carries on the business of a dealer in another country and will not act as an underwriter in Ontario.

Statutes Cited

Securities Act, R.S.O. 1990, c. S.5, as am.

Regulations Cited

Regulation made under the Securities Act, R.R.O., Reg. 1015, as am., ss. 100(3), 208, 208(2) and 211.

IN THE MATTER OF

THE SECURITIES ACT,

R.S.O. 1990, CHAPTER S.5, AS AMENDED (the "Act")

AND

IN THE MATTER OF

R.R.O. 1990, REGULATION 1015,

AS AMENDED (the "Regulation")

AND

IN THE MATTER OF

FIRST CLEARING, LLC

 

ORDER

(Section 211 of the Regulation)

UPON the application (the "Application") of First Clearing, LLC (the "Applicant") to the Ontario Securities Commission (the "Commission") for an order, pursuant to section 211 of the Regulation, exempting the Applicant from the requirement in subsection 208(2) of the Regulation that the Applicant carry on the business of an underwriter in a country other than Canada, in order for the Applicant to be registered under the Act as a dealer in the category of "international dealer";

AND UPON considering the Application and the recommendation of staff of the Commission;

AND UPON the Applicant having represented to the Commission that:

1. The Applicant is not currently registered in any capacity under the Act and has filed an application for registration under the Act as a dealer in the category of "international dealer".

2. The Applicant is a limited liability company organized under the laws of the state of Delaware in the United States of America (the "USA"). The Applicant's registered office is in Virginia in the USA.

3. The Applicant is registered as a broker-dealer in the USA with the Securities and Exchange Commission and carries on the business of a broker-dealer in the USA. The Applicant is a member in good standing of the National Association of Securities Dealers, Inc.

4. In the USA, the Applicant carries on the business of a broker-dealer (as defined in sections 3(a)(4) and 3(a)(5) of the Securities Exchange Act of 1934). The Applicant acts as a carrying broker and engages in clearance and settlement transactions in global securities.

5. The Applicant does not currently act as an underwriter in the USA or in any jurisdiction in the world.

6. Subsection 208(2) of the Regulation provides that: "No person or company may register as an international dealer unless the person or company carries on the business of a dealer and underwriter in a country other than Canada".

7. The Applicant will not act as an underwriter in Ontario if it is registered under the Act as an "international dealer", despite the fact that subsection 100(3) of the Regulation deems an "international dealer" to have been granted registration as an underwriter for the purposes of a distribution which it is authorized to make by section 208 of the Regulation.

8. In the absence of this Order, the Applicant would not meet the requirements of the Regulation for registration as a dealer in the category of "international dealer" as it does not carry on the business of an underwriter in a country other than Canada.

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

IT IS ORDERED, pursuant to section 211 of the Regulation, that, in connection with the registration of the Applicant as a dealer under the Act in the category of "international dealer", the Applicant is exempt from the provisions of subsection 208(2) of the Regulation requiring that the Applicant carry on the business of an underwriter in a country other than Canada, provided that, so long as the Applicant is registered under the Act as an "international dealer":

(1) the Applicant carries on the business of a dealer in a country other than Canada; and

(2) despite subsection 100(3) of the Regulation, the Applicant does not act as an underwriter in Ontario.

April 6, 2004.

"Paul M. Moore"
"Susan Wolburgh Jenah"