Application to the Commission for an order, pursuant to section 218 of Regulation 1015 of the Securities Act (Ontario), that the requirement in section 213 of the Regulation, which provides that a registered dealer that is not an individual must be a company incorporated, or a person formed or created, under the laws of Canada or a province or territory of Canada, shall not apply for three years to City of London Investment Management Company Limited. The order sets out the terms and conditions applicable to a non-resident limited market dealer.
Ontario Regulation 1015, R.R.O. 1990, sec. 213, 218.
October 19, 2004
IN THE MATTER OF
THE SECURITIES ACT, R.S.O. 1990,
C. S.5, AS AMENDED
IN THE MATTER OF
R.R.O. 1990, REGULATION 1015,
IN THE MATTER OF
CITY OF LONDON INVESTMENT MANAGEMENT COMPANY LIMITED
(Section 218 of the Regulation)
UPON the application (the Application) from City of London Investment Management Company Limited (the Applicant) to the Ontario Securities Commission (the "Commission") for an order pursuant to section 218 of the Regulation that the requirement in section 213 of the Regulation, which provides that a registered dealer that is not an individual must be a company incorporated, or a person formed or created, under the laws of Canada or a province or territory of Canada, shall not apply to the Applicant;
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 a corporation incorporated under the laws of England & Wales. The head office of the Applicant and its primary operations are located in London, England;
2. the Applicant provides investment management and investment advisory services to its clients and is regulated by the Financial Services Authority (the FSA) in the United Kingdom;
3. the Applicant is also registered as an adviser in the United States with the Securities and Exchange Commission, as an international adviser in Ontario with the Commission, and as a foreign adviser in Alberta with the Alberta Securities Commission;
4. the Applicant effectively operates out of London, England and does not have any personnel or offices in Canada;
5. the Applicant wants to be able to sell securities on an exempt basis to investors in Ontario as a non-resident limited market dealer pursuant to the registration and prospectus exemptions contained in the Act and Ontario Securities Commission Rule 45-501 - Exempt Distributions;
AND UPON the Commission being satisfied that to make this order would not be prejudicial to the public interest;
IT IS ORDERED THAT, pursuant to section 218 of the Regulation, that, in connection with the registration of the Applicant as a dealer under the Act in the category of limited market dealer, the Applicant is exempt from the provisions of section 213 of the Regulation requiring that the Applicant be a company incorporated, or a person formed or created, under the laws of Canada or a province or territory of Canada, for a period of three years, provided that:
(a) the Applicant appoints an agent for service of process in Ontario;
(b) the Applicant shall provide to each client that it acts for as a non-resident limited market dealer in Ontario a statement in writing disclosing the non-resident status of the Applicant, the Applicant's jurisdiction of residence, the name and address of the agent for service of process of the Applicant in Ontario, and the nature of risks to clients that legal rights may not be enforceable;
(c) the Applicant will not change its agent for service of process in Ontario without giving the Commission 30 days' prior notice of such change by filing a new Submission to Jurisdiction and Appointment of Agent for Service of Process;
(d) the Applicant and each of its registered salespersons, officers, and directors irrevocably and unconditionally submits to the non-exclusive jurisdiction of the judicial, quasi-judicial, and administrative tribunals of Ontario and any administrative proceedings in Ontario, in any proceedings arising out of or related to or concerning its registration as a non-resident limited market dealer under the Act or its activities in Ontario as such a registrant;
(e) the Applicant, in its capacity as a non-resident limited market dealer in Ontario, will not have custody of, or maintain customer accounts in relation to, securities, funds, and other assets of its clients resident in Ontario;
(f) the Applicant will inform the Director immediately upon the Applicant: (i) ceasing to be regulated by the FSA in the United Kingdom; (ii) becoming aware of its registration in any other jurisdiction not being renewed or being suspended or revoked; or (iii) becoming aware that it is the subject of an investigation or disciplinary action by any financial services or securities regulatory authority or self-regulatory authority (or of similar issues with its salespersons, officers, or directors that are registered in Ontario);
(g) the Applicant will pay the increased compliance and case assessment costs of the Commission due to the Applicant's location outside Ontario, including the cost of hiring a third party to perform a compliance review on behalf of the Commission;
(h) the Applicant will make its books and records outside Ontario, including electronic records, readily accessible in Ontario, and will produce physical records for the Commission within a reasonable time if requested. If the laws of the jurisdiction in which the Applicant's books and records are located prohibit production of the books and records in Ontario without the consent of the relevant client, the Applicant shall, upon a request by the Commission: (a) so advise the Commission; and (b) use its best efforts to obtain the client's consent to the production of such books and records;
(i) the Applicant will have available a person, possibly a third party, to assist the Commission in compliance and enforcement matters;
(j) the Applicant and each of its registered salespersons, officers, and directors will comply, at the Applicant's expense, with requests under the Commission's investigation powers and orders under the Act in relation to the Applicant's dealings with Ontario clients as a non-resident limited market dealer, including producing documents and witnesses in Ontario, submitting to audit or search and seizure process or consenting to an asset freeze, to the extent such powers would be enforceable against the Applicant if the Applicant were resident in Ontario. If the laws of the Applicant's jurisdiction of residence that are otherwise applicable to the giving of evidence or the production of documents prohibit the Applicant or the witnesses from giving the evidence without the consent or leave of the relevant client and any third party, including a court of competent jurisdiction, the Applicant shall: (a) so advise the Commission; and (b) use its best efforts to obtain such client's or third party's consent to the giving of such evidence; and
(k) the Applicant will maintain appropriate registration or self regulatory organization membership, if and where applicable, in its jurisdiction of residence.
October 19, 2004.
"Robert L. Shirriff"
"Paul M. Moore"