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FRM Americas LLC - 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 "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.
November 3, 2006
IN THE MATTER OF
THE SECURITIES ACT,
R.S.O. 1990, CHAPTER S.5, AS AMENDED
(the ACT)
AND
IN THE MATTER OF
FRM AMERICAS LLC
DECISION
(Subsection 7.1(1) of Multilateral Instrument 33-109)
UPON the application of FRM Americas LLC (the Applicant) to the Ontario Securities Commission (the Commission) 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) of MI 33-109 that the Applicant submit a completed Form 33-109F4 for all Non- Registered Individuals of the Applicant in connection with the Applicant's registration as a dealer in the category of a limited market dealer (LMD);
AND UPON considering the application and the recommendation of staff of the Commission;
AND UPON the Applicant having represented to the Director that:
1. The Applicant is a limited liability company organized under the laws of the State of Delaware. The head office of the Applicant is located in New York, New York.
2. The Applicant is not presently registered in any capacity under the Act. The Applicant has applied to the Commission for registration under the Act as a non-resident limited market dealer.
3. The primary focus of the Applicant's activities is on the marketing, sale and management of specialized alternative investments, including funds of hedge funds and related private offerings to institutions, accredited investors and other exempt purchasers.
4. All individuals who intend to trade in securities in Ontario on behalf of the Applicant will register as Registered Individuals in accordance with the registration requirement under section 25(1) of the Act and the requirements of Multilateral. Instrument 31-102 - National Registration Database (MI 31-102), by submitting a Form 33-109F4 completed with all the information required for a Registered Individual.
5. The Applicant has six (6) directors and approximately 27 officers. It is currently anticipated that of the Applicant's approximately 27 officers, no more than 2 will be involved in the Applicant's trading activity in Ontario and will therefore seek registration as Registered Individuals.
6. The Applicants remaining directors and officers will be considered Non-Registered Individuals, as defined in MI 33-109. Of these Non-Registered Individuals many would not reasonably be considered to be directors or officers from a functional point of view. These individuals have the title "vice president" or similar title, but are not in charge of a principal 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 (the Nominal Officers). For purposes of reporting to securities regulatory authorities the Applicant considered only the holders of its most senior managing director positions to be officers (the Executive Officers) which would include a total of seven (7) people, five (5) of whom are also directors.
7. The Applicant seeks relief from the requirement to submit Form 33-109F4s for its Nominal Officers. The Applicant proposes to submit Form 33-109F4s on behalf of each director and its Executive Officers completed with all the information required for a Non-Registered Individual. The Applicant also proposes to submit a Form 33-109F4 for the designated compliance officer under the Applicant's proposed non-resident LMD registration (the Designated Compliance Officer). The Designated 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 LMD in Ontario.
8. In the absence of the requested relief, subsection 2.1(c) of MI 33-109 would require that in conjunction with its 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, the Executive Officers and the Designated 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 Nominal Officers, none of whom will have any involvement in the Applicant's Ontario activities, the preparation and filing of Form 33-109F4s 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) of MI 33-109 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 limited market dealer business in Ontario business, provided that at no time will the Nominal Officers include any director, Executive Officer or Designated Compliance Officer, or other officer who will be involved in, or have oversight of, the Applicant's limited market dealer activities in Ontario in any capacity.
"David M. Gilkes"