Mutual Reliance Review System for Exemptive Relief Applications -- extension of time period for delivery to clients of a revised statement of policies and conflicts of interest rules.
Applicable Ontario Legislation
Ontario Regulation 1015, R.R.O. 1990, s. 223(3)(b), 233.
September 13, 2004
IN THE MATTER OF
THE SECURITIES LEGISLATION OF
ALBERTA, ONTARIO, QUEBEC,
NOVA SCOTIA AND NEWFOUNDLAND AND LABRADOR
IN THE MATTER OF
THE MUTUAL RELIANCE REVIEW SYSTEM
FOR EXEMPTIVE RELIEF APPLICATIONS
IN THE MATTER OF
CANACCORD CAPITAL CORPORATION
MRRS DECISION DOCUMENT
The local securities regulatory authority or regulator (the Decision Maker) in each of Alberta, Ontario, Quebec, Nova Scotia and Newfoundland and Labrador (the Jurisdictions) has received an application from Canaccord Capital Corporation (the Filer) for a decision under the securities legislation of the Jurisdictions (the Legislation) that the requirement contained in the Legislation for the Filer to provide a revised conflict of interest rules statement or statement of policies (the Statement) to each of its clients on or before the 45th day after filing such statement with the securities regulatory authorities be extended to permit the Filer to provide such statement to its clients on or before October 15, 2004.
Under the Mutual Reliance Review System for Exemptive Relief Applications,
(a) the Ontario Securities Commission is the principal regulator for this application, and
(b) this MRRS decision document evidences the decision of each Decision Maker.
Defined terms contained in National Instrument 14-101 Definitions have the same meaning in this decision unless they are defined in this decision.
This decision is based on the following facts represented by the Filer:
1. Canaccord Capital Inc. (Canaccord) is the 100% holding company of the Filer which is a registered dealer in each of the Jurisdictions;
2. Canaccord completed an initial public offering (the IPO) of its common shares on June 30, 2004 (the Effective Date);
3. Prior to the Effective Date, the Manufacturers Life Insurance Company (Manulife) (and its subsidiaries) were related issuers to both Canaccord and the Filer, as Manulife held rights to acquire shares in Canaccord, that if such rights were exercised, would give Manulife 20.16% of all the outstanding shares of Canaccord;
4. As a result of the IPO, Manulife's interest in Canaccord was reduced to shares representing 13.07% of the common shares of Canaccord. Neither Manulife nor its affiliates are entitled to nominate 20% of the directors of Canaccord or the Filer and neither Canaccord nor its affiliates have officers or directors which constitute at least 20% of the directors of Canaccord or the Filer. Manulife and its subsidiaries are no longer related issuers of Canaccord or the Filer.
5. The Filer prepared a revised Statement (the Revised Statement) and filed it with each of the securities regulatory authorities in the provinces of Alberta, Ontario, Nova Scotia and Newfoundland and Labrador on July 29, 2004;
6. Manulife and its subsidiaries were removed from the list of related issuers in the Revised Statement.
7. The Filer prepared a French version of the Revised Statement and filed it with the Autorité des marchés financiers on August 24, 2004;
8. The Filer is required under the securities regulation of each of the Jurisdictions, other than Quebec, to provide each of its clients in those Jurisdictions with a copy of the Revised Statement no later than September 12, 2004;
9. The Filer is required under the securities regulation of Quebec to provide each of its clients in Quebec with a copy of the Revised Statement no later than October 8, 2004;
10. The Filer is currently planning to conduct its regular quarterly mailing (the Quarterly Mailing) of account statements to all of its clients during the week of October 11, 2004 and proposes to enclose the Revised Statement with the Quarterly Mailing;
11. The Filer has approximately 100,000 client accounts and estimates that a separate mailing of the Revised Statement to each of its clients would cost approximately $80,000; and
12. The Filer abides by all other requirements of the Legislation pertaining to related issuers and conflicts of interest.
Each of the Decision Makers is satisfied that the test contained in the Legislation that provides the Decision Maker with the jurisdiction to make the Decision has been met.
The decision of the Decision Makers under the Legislation is that the requirement contained in the Legislation for the Filer to provide a revised conflict of rules statement or statement of policies to each of its clients on or before the 45th day after filing such statement with the securities regulatory authorities shall not apply to the Filer provided that on or prior to October 15, 2004 the Filer includes a copy of the Revised Statement with its Quarterly Mailing to its clients.
"Robert L. Shirriff"
"Wendell S. Wigle"