Securities Law & Instruments

Headnote

Trades by U.S. licensed broker dealer, which is an affiliate of Ontario registered investment dealer, exempted from requirements of clause 25(1)(a) of the Act, for trades made to persons or companies that are resident in the U.S.A., where the trade is made by the U.S. dealer (in its own right, or on behalf of another person or company resident in the U.S.) through individuals that are officers or salespersons of both the U.S. licensed dealer and Ontario registrant -- Individuals must be appropriately registered to make the trade on behalf of the Ontario registrant if instead the Ontario registrant were making the trade to an Ontario resident.

Statutes Cited

Securities Act, R.S.O. 1990, c. S.5, as am., ss. 25(1)(a), 74(1).

THE MATTER OF

THE SECURITIES ACT,

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

AND

IN THE MATTER OF

HARRIS PARTNERS LIMITED

AND HARRIS PARTNERS (USA) LIMITED

 

RULING

(SUBSECTION 74(1))

UPON the application (the "Application") of Harris Partners Limited ("Harris Canada") and Harris Partners (USA) Limited ("Harris U.S.") to the Ontario Securities Commission (the "Commission") for a ruling, pursuant to subsection 74(1) of the Act, that, where persons ("dual representatives") who are salespersons or officers of Harris U.S., who are also registered under the Act to trade on behalf of Harris Canada as salespersons or officers of Harris Canada, act on behalf of Harris U.S. in respect of trades in securities to persons or companies ("U.S. Clients") that are resident in the United States of America (the "U.S.A."), and the trade is made by Harris U.S., in its own right or on behalf of other U.S. Clients, such trades shall not be subject to clause 25(1)(a) of the Act;

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

AND UPON Harris Canada having represented to the Commission that:

1. Harris Canada, a corporation incorporated under the laws of Ontario, is registered under the Act as a dealer in the categories of "broker" and "investment dealer".

2. Harris Canada is a wholly-owned subsidiary of 2037490 Ontario Inc. ("Harris Holdco").

3. The head office (the "Ontario Office") of Harris Canada is in Ontario.

4. Harris U.S., a corporation incorporated under the laws of Ontario, is not registered under the Act.

5. Harris U.S. is a wholly-owned subsidiary of Harris Holdco.

6. Harris U.S. will operate out of the Ontario Office.

7. Harris U.S. is in the process of applying for: (a) registration as a "broker-dealer" by the Securities and Exchange Commission of the U.S.A. to carry on the business of a broker-dealer in the U.S.A., pursuant to section 15(b) of the Securities Exchange Act of 1934 of the U.S.A., and (b) to be a member of the National Association of Securities Dealers, Inc.

8. Harris U.S. was established as a vehicle for trading in Canadian securities with U.S. Clients, the majority of whom are institutional investors.

9. Harris U.S. will not trade in securities with or on behalf of persons or companies who are resident in Canada.

10. Although dual representatives will primarily act on behalf of Harris Canada, they may also act in Ontario on behalf of Harris U.S. in respect of trades with or on behalf of U.S. Clients.

11. Where Harris U.S. trades with or on behalf of U.S. Clients, Harris U.S. and any dual representatives who acts on behalf of Harris U.S. in respect of such trade, will comply with all registration and other requirements of applicable securities legislation in the U.S.A.

12. Harris U.S. will file with the Commission such reports as to its trading activities as the Commission may from time to time require.

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

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

IT IS RULED, pursuant to subsection 74(1) of the Act, that trades in securities to U.S. Clients, that are made by Harris U.S., for itself or on behalf of other U.S. Clients, and on behalf of Harris U.S. by dual representatives, shall not be subject to clause 25(1)(a) of the Act, provided that, at the time of the trade:

(A) Harris Canada is registered under the Act as a dealer in a category that would permit Harris Canada to act as a dealer for the trade, in compliance with clause 25(1)(a) of the Act, if the trade were instead being made by Harris Canada to a person or company resident in Ontario; and

(B) the registration of the relevant dual representative(s) would permit the dual representative to act on behalf of Harris Canada in respect of such trade, in compliance with clause 25(1)(a) of the Act, if the trade were instead being made by the dual representative on behalf of Harris Canada to a person or company resident in Ontario.

November 23, 2004

"Paul M. Moore"
"David L. Knight"