Securities Law & Instruments

Headnote

Section 147 of the Act -- Registrant registered in the categories of international advisor and international dealer under the Act -- section 4.1 of Rule 35-502 -- Registrant exempt from requirement in subsection 21.10(3) of the Act that it file annual audited financial statements prepared in accordance with Canadian GAAP with the Commission and the requirement in subsection 33(2)(b) of the Act that it notify the Director of changes in information relating to information about directors and officers that was not required to be furnished to the Director upon initial registration.

Statutes Cited

Securities Act, R.S.O. 1990, c. S.5, as am., ss. 21.10(3), 33(2)(b), 147

Rules Cited

Ontario Securities Commission Rule 35-502 -- Non Resident Registrants, s. 4.1

IN THE MATTER OF

THE SECURITIES ACT,

R.S.O. 1990, AS AMENDED (THE "ACT")

AND

RULE 35-502 MADE UNDER THE SECURITIES ACT,

R.R.O. 1990 (THE "RULE")

AND

IN THE MATTER OF

BEAR, STEARNS & CO. INC.

 

ORDER

(Section 147 of the Act)

UPON the application of Bear, Stearns & Co. Inc. ("the Registrant") to the Ontario Securities Commission (the "Commission") for an order pursuant to section 147 of the Act that the Registrant be exempt from (i) the requirement under subsection 21.10(3) of the Act relating to the filing of financial statements prepared in accordance with Canadian generally accepted accounting principles ("Canadian GAAP"); and (ii) the requirement under subsection 33(2) of the Act to notify the Director of certain changes in information;

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

AND UPON the Registrant having represented to the Commission that:

1. The Registrant is registered with the Commission as an adviser in the category of international adviser (investment counsel and portfolio manager) and as a dealer in the category of international dealer.

2. The Registrant is a corporation organized under the laws of the State of Delaware and having its principal place of business at 383 Madison Avenue, New York, NY 10179. The Registrant is a global investment banking, security trading and brokerage firm and is registered as an investment adviser and as a broker-dealer with the United States Securities and Exchange Commission and is also a member of the American Stock Exchange, the Boston Stock Exchange, the Chicago Board Options Exchange, the Chicago Stock Exchange, the Cincinnati Stock Exchange, the International Securities Exchange, NASDAQ, the New York Stock Exchange, the Pacific Stock Exchange, and the Philadelphia Stock Exchange. The Registrant is also a registered futures commission merchant with the United States National Futures Association and the United States Commodity Trading Commission and is a member of the National Association of Securities Dealers.

3. Pursuant to Section 4.1 of the Rule an international adviser may apply for an exemption from the requirement to file annual audited financial statements prepared in accordance with Canadian GAAP as required under subsection 21.10(3) of the Act only if it is not registered in any category of registration in addition to international adviser. As the Registrant is registered with the Commission under both the categories of international adviser (investment counsel and portfolio manager) and international dealer, it does not qualify to file for the exemption from the requirement to file annual audited financial statements provided for in section 4.1 of the Rule.

4. In the absence of the requested ruling, subsection 21.10(3) of the Act would require the Registrant to file with the Commission, annual audited financial statements prepared in accordance with Canadian GAAP. The Registrant is not otherwise required to prepare its financial statements in accordance with Canadian GAAP and is not otherwise required to file annual audited financial statements with the Commission because it is staff practice to not require a registrant who is registered in Ontario solely in the category of international dealer to provide annual financial statements.

5. The requirement to prepare annual audited financial statements in accordance with Canadian GAAP will be expensive and time-consuming for the Registrant and will place unnecessary compliance burdens on the Registrant.

6. Subsection 33(2)(b) of the Act requires a registrant to notify the Director of a change in the directors or officers of the registrant. It has been staff practice to require an applicant for registration as an international adviser to provide, at the time of the application, information about only those directors and officers who will be providing advice to Ontario residents.

7. The requirement that the Registrant notify the Director of changes in information required to be reported under subsection 33(2)(b) of the Act to the extent that the change required to be reported relates to information about directors and officers that was not required to be furnished to the Director upon the filing of the Registrant's initial registration application will be expensive and time-consuming for the Registrant and will place unnecessary compliance burdens on the Registrant.

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

IT IS ORDERED, pursuant to section 147 of the Act, that, for so long as the Registrant is registered only in the categories of international adviser and international dealer under the Act, the Registrant is exempt from:

(i) the requirement under subsection 21.10(3) of the Act that it file annual audited financial statements prepared in accordance with Canadian GAAP with the Commission in connection with its registration as an adviser in the category of international adviser in Ontario; and

(ii) the requirement under subsection 33(2)(b) of the Act that it notify the Director of changes in information relating to information about directors and officers of the Registrant that was not required to be furnished to the Director upon the Registrant's initial registration as an international adviser under the Act.

June 27, 2003.

"Paul M. Moore"
"H. Lorne Morphy"