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 F4s on behalf of its directing minds, who are certain executive officers and officers involved in the Ontario business activities.
Securities Act, R.S.O. 1990, c. S.5, as am., s. 147.
Regulation made under the Securities Act, R.R.O. 1990, Reg. 1015, as am., ss. 116, 117, 118.
Multilateral Instrument 33-109 -- Registration Information.
September 21, 2006
IN THE MATTER OF
THE SECURITIES ACT,
R.S.O. 1990, CHAPTER S.5, AS AMENDED
IN THE MATTER OF
LAZARD FRÈRES & CO. LLC
(Subsection 7.1(1) of Multilateral Instrument 33-109)
UPON the application of Lazard Frères & Co. 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:
(a) The Applicant is a limited liability company governed by the laws of the State of New York of the United States of America and is a direct wholly-owned subsidiary of Lazard Group LLC. The head office of the Applicant is located in New York, New York.
(b) The Applicant is presently registered under the Act as an international dealer and intends to maintain that registration. The Applicant is also registered as a broker-dealer with the U.S. Securities and Exchange Commission, the NASD, the MSRB and as a broker-dealer in all 50 states, the District of Columbia and Puerto Rico.
(c) The Applicant carries on business as a broker dealer in the United States.
(d) The Applicant has approximately 198 officers which include, 56 vice-presidents, 20 senior vice-presidents, 47 directors and 75 managing directors. The Applicant does not have a board of directors.
(e) 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. It is currently anticipated that of the Applicant's approximately 198 officers, no more than 10 will be involved in the Applicant's trading activity in Ontario and will therefore seek registration as Registered Individuals.
(f) The Applicants remaining officers will be Non-Registered Individuals, as defined in MI 33-109. Of the Applications 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 "vice president", "senior vice-president", "director" or a 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. 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 three people.
(g) The Applicant seeks relief from the requirement to submit Form 33-109F4s for the Nominal Officers. The Applicant proposes to submit Form 33-109F4s on behalf of each 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 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.
(h) In the absence of the requested exemption, 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 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.
(i) 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 Decision 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 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"