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Morgan Stanley & Co. Incorporated - s. 7.1(1) of MI 33-109
Headnote
Application pursuant to section 7.1 of MI 33-109 that the Applicant be relieved from the Form 33-109F requirements in respect of certain of its nominal officers. The exempted officers are without significant authority over any part of the Applicant's operations and have no connection with its Ontario operation. The Applicant is still required to submit 33-109 F4's on behalf of its directing minds, who are certain Directors and "Executive Officers" and its Registered Individuals which are those officers involved in the Ontario business activities.
Statutes Cited
Securities Act, R.S.O. 1990, c. S.5, as am., s. 147.
Rules Cited
Multilateral Instrument 33-109 -- Registration Information.
IN THE MATTER OF
THE SECURITIES ACT (ONTARIO),
R.S.O. 1990, c. S.5, AS AMENDED
AND
IN THE MATTER OF
MORGAN STANLEY & CO. INCORPORATED
ORDER
(Section 7.1(1) of Multilateral Instrument 33-109)
UPON the application (the Application) of Morgan Stanley & Co. Incorporated (the Applicant) pursuant to section 7.1 of Multilateral Instrument 33-109 Registration Information (MI 33-109) for an exemption from the requirement in subsection 2.1(c) and section 3.3 of MI 33-109 that the Applicant submit a completed Form 33-109F4 for all non-registered individuals (Non-Registered Individuals) of the Applicant in connection with the Applicant's registration as a dealer in the category of limited market dealer (LMD);
AND UPON considering the Application;
AND UPON the Applicant having represented to the Director that:
1. The Applicant is a corporation organized under the laws of the State of Delaware. The Applicant's principal place of business is in New York City, New York.
2. The Applicant is currently registered in Ontario as a dealer in the category of international dealer and as an advisor in the category of international adviser (investment counsel and portfolio manager). The Applicant has applied to the Commission for registration as a non-resident LMD.
3. The Applicant is a global financial services firm and is registered in the United States with the United States Securities and Exchange Commission (the SEC) as a broker-dealer and as an investment adviser. The Applicant is also a member of the National Association of Securities Dealers (the NASD). The Applicant has approximately 10,000 employees. The Applicant has 7 directors and approximately 3,800 officers, 5 of which may be characterized as executive officers.
4. All individuals who intend to trade in securities in Ontario on behalf of the Applicant under the Applicant's non-resident LMD registration will register as registered individuals (Registered Individuals) in accordance with the registration requirement under section 25(1) of the Act and the requirements of MI 33-102 National Registration Database (MI 33-102), by submitting a Form 33-109F4 completed with all the information required for a Registered Individual. It is currently anticipated that of the Applicant's approximately 3,800 officers, less than 1% will be involved in the Applicant's trading activity in Ontario and will therefore seek registration as Registered Individuals.
5. The Applicant's remaining directors and officers will be Non-Registered Individuals, as defined in MI 33-109. Of the Applicant's Non-Registered Individuals, many would not reasonably be considered to be directors or officers from a functional point of view. These individuals (the Nominal Officers) have the title of "managing director", "vice president" or a similar title, but are not in charge of a business unit, division or function of the Applicant and, in any event, will not be involved in or have oversight of the Applicant's dealer activities in Ontario. For purposes of reporting to securities regulatory authorities, the Applicant considers only the holders of its most senior executive positions to be officers (the Executive Officers).
6. The Applicant seeks relief from the requirement to submit a Form 33-109F4 for each of its the Nominal Officers.
7. The Applicant proposes to submit a Form 33-109F4 on behalf of each of its directors (the Directors) and Executive Officers, completed with all the information required for a Non-Registered Individual. The Applicant also proposes to submit a Form 33-109F4 for its designated compliance officer under the Applicant's non-resident LMD registration (the Compliance Officer). The Compliance Officer will monitor and supervise the Ontario trading activities of the Applicant with respect to compliance with Ontario securities laws and any conditions of the Applicant's registration as a limited market dealer in Ontario.
8. In the absence of the requested exemption, subsection 2.1(c) and section 3.3 of MI 33-109 would require that in conjunction with its non-resident LMD registration, the Applicant submit a completed Form 33-109F4 for each of its Non-Registered Individuals which would include its Nominal Officers and any new Nominal Officers, rather than limiting this filing requirement to the much smaller number of directors and Executive Officers and the Compliance Officer. The information contained in the filed Form 33-109F4 would also need to be monitored on a constant basis to ensure that notices of change were submitted in accordance with the requirements of section 5.1 of MI 33-109.
9. Given the limited scope of the Applicant's proposed activities in Ontario and the number of its Nominal Officers, none of whom will have any involvement in the Applicant's Ontario activities, the preparation and filing of a Form 33-109F4 on behalf of each Nominal Officer would achieve no regulatory purpose, while imposing an unwarranted administrative and compliance burden on the Applicant.
AND WHEREAS the Director is satisfied that it would not be prejudicial to the public interest to make the requested Order on the basis of the terms and conditions proposed;
IT IS ORDERED, pursuant to section 7.1 of MI 33-109, that the Applicant is exempt from the requirement in subsection 2.1(c) and section 3.3 of MI 33-109 to submit a completed Form 33-109F4 for each of its Non-Registered Individuals who are Nominal Officers not involved in its Ontario business provided that the Nominal Officers shall at no time include any director, Executive Officer or Compliance Officer or other officer who will be involved in, or have oversight of, the Applicant's activities in Ontario in any capacity.
March 20, 2006
"David M. Gilkes"