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Dimensional Fund Advisors Canada Inc. - s. 80
Headnote
Subsection 80(1) of the Commodity Futures Act (Ontario) (the CFA) - relief from the registration requirements of paragraph 22(1)(b) of the CFA granted to extra-provincial advisers in respect of the provision of advisory services relating to futures contracts to funds that do not have an address in Ontario, subject to certain terms and conditions.
Statutes Cited
Commodity Futures Act, R.S.O. 1990. c. C.20., as am., ss. 22(1)(b), 80.
Ontario Securities Commission Rule 35-502 Non-Resident Advisers, ss. 7.4, 7.5.
IN THE MATTER OF
THE COMMODITY FUTURES ACT
R.S.O. 1990, CHAPTER C.20, AS AMENDED
(the CFA)
AND
IN THE MATTER OF
DIMENSIONAL FUND ADVISORS CANADA INC.
ORDER
(Subsection 80)
UPON the application of Dimensional Fund Advisors Canada Inc. (the Applicant) to the Ontario Securities Commission (the Commission) for a ruling, under subsection 80 of the CFA, that the Applicant, affiliates of the Applicant (the Affiliates) and their respective directors, officers and employees are not subject to the requirements of paragraph 22(1)(b) of the CFA with respect to advice provided to mutual funds (collectively, the Funds) managed by the Applicant with respect to commodity futures contracts and commodity futures options;
AND UPON considering the application and the recommendation of the staff of the Commission;
AND UPON the Applicant having represented to the Commission that:
1. The Applicant is a corporation incorporated under the Canada Business Corporations Act. The head office of the Applicant is located in British Columbia. The Applicant does not have an address in Ontario.
2. The head offices of the Affiliates are or will be located outside of Canada. None of the Affiliates have an address in Ontario.
3. The Applicant is registered as an adviser in the category of portfolio manager under the Securities Act (British Columbia) (the BCSA). This registration permits the Applicant to provide advice in British Columbia with respect to securities (including futures and options) and exchange contracts within the meaning of the BCSA.
4. The Affiliates are or will be registered or otherwise qualified under applicable laws in the United States or in the jurisdiction where their head office is located to provide investment counselling and portfolio management services.
5. The Applicant is the manager and principal portfolio advisor of the Funds. The head office of each of the Funds is located in British Columbia. None of the Funds has an address in Ontario.
6. Securities of the Funds will be distributed in Ontario either pursuant to a simplified prospectus filed with the Commission or pursuant to exemptions from the prospectus requirements under the Securities Act (Ontario) (the OSA).
7. The Affiliates will be the sub-advisers to the Applicant with respect to the Funds. The Affiliates wish to advise the Funds with respect to commodity futures contracts and commodity futures options within the meaning of the CFA.
8. The obligations of the Affiliates are or will be set out in a written agreement with the Applicant.
9. The Applicant has or will contractually agree with the Funds to be responsible for any loss to the Funds that arises out of the failure of any Affiliate to:
(a) exercise the powers and discharge the duties of its office honestly, in good faith and in the best interests of the Funds; or
(b) exercise the degree of care, diligence and skill that a reasonably prudent person would exercise in the circumstances;
(the Assumed Obligations).
10. The Applicant cannot be relieved by the Funds or the Funds' securityholders from its responsibility for any liability arising under the Assumed Obligations.
AND WHEREAS paragraph 22(1)(b) of the CFA prohibits a person or company from acting as an adviser unless the person is registered as an adviser, or is registered as a partner or an officer of a registered adviser and is acting on behalf of a registered adviser, and the registration is in accordance with the CFA and the regulations;
AND UPON the Commission being satisfied that to make this ruling would not be prejudicial to the public interest;
IT IS ORDERED under section 80 of the CFA that the Applicant, the Affiliates and their respective directors, officers and employees are not subject to the requirement of paragraph 22(1)(b) of the CFA in respect of the advice they provide to the Funds, provided that:
(a) all advice by the Applicant and the Affiliates to the Funds is given and received, or portfolio management services are provided, outside of Ontario;
(b) the Applicant remains registered under the BCSA and permitted to provide advice in British Columbia with respect to exchange contracts;
(c) the Applicant, the Affiliates and the Funds continue to not have addresses in Ontario;
(d) the obligations of the Affiliates are set out in a written agreement with the Applicant;
(e) the Applicant remains responsible to the Funds or the Funds' securityholders for the Assumed Obligations; and
(f) this order shall terminate three years from the date of the order.
August 29, 2006
"Paul M. Moore"
"Harold P. Hands"