Applicant for registration as limited market dealer exempted, pursuant to section 218 of the Regulation, from section 213 of the Regulation, subject to terms and conditions.
Securities Act, R.S.O. 1990, c. S.5, as am., s. 26(3).
Regulation made under the Securities Act, R.R.O. 1990, Reg. 1015, as am., ss. 213, 218 and Part V.
National Instrument 81-102 -- Mutual Funds, Part 6.
Ontario Securities Commission Notice 35-701 Residency Requirements for Advisers and their Partners and Officers.
IN THE MATTER OF
THE SECURITIES ACT, R.S.O. 1990,
CHAPTER S.5, AS AMENDED (THE "ACT")
IN THE MATTER OF
R.R.O. 1990, REGULATION 1015,
AS AMENDED (THE "REGULATION"),
MADE UNDER THE ACT
IN THE MATTER OF
LAZARD ASSET MANAGEMENT (CANADA), INC.
(Section 218 of the Regulation)
UPON the application (the Application) of Lazard Asset Management (Canada), Inc. (the Applicant) to the Ontario Securities Commission (the Commission) for an order, pursuant to section 218 of the Regulation, exempting the Applicant from the requirement in section 213 of the Regulation that the Applicant be incorporated, or otherwise formed or created, under the laws of Canada or a province or territory of Canada, in order for the Applicant to be registered under the Act as a dealer in the category of "limited market dealer";
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 the State of Delaware, United States of America ("U.S.A"). The head office of the Applicant is located in New York, New York, U.S.A.
2. The Applicant is registered as an investment adviser with the Securities and Exchange Commission of the U.S.A under the Investment Advisers Act of 1940.
3. The Applicant is currently registered under the Act as an adviser in the categories of "investment counsel" and "portfolio manager"; and, due to the fact that the Applicant was not at the time of its initial registration (and continues not to be) a resident in Canada, the Director imposed specific terms and conditions (the Existing Terms and Conditions) on this registration pursuant to subsection 26(2) of the Act and as contemplated by Ontario Securities Commission Notice 35-701 Residency Requirements for Advisers and their Partners and Officers.
4. The Applicant has applied for registration under the Act as a dealer in the category of "limited market dealer", in addition to its existing registration as an adviser.
5. In connection with its existing registration under the Act as an adviser, and its application for registration under the Act as a dealer, the Applicant has appointed an agent for service of process, that is resident in Ontario, and has submitted a completed a Form of Submission to Jurisdiction and Appointment of Agent for Service of Process for a Non-Resident Business, in the required form. In addition, each of the individuals that is currently registered to act as an adviser on behalf of the Applicant and any individuals that are subsequently registered to act as an adviser on behalf of the Applicant, or registered to trade on behalf of the Applicant, will: (i) to the extent not otherwise resident in Ontario, appoint an agent for service that is resident in Ontario; and (ii) will irrecoverably and unconditionally submit to the non-exclusive jurisdiction of the judicial, quasi-judicial, and administrative tribunals of Ontario, and any administrative or other proceedings in Ontario arising out of, or related to or concerning, their registration under the Act or their activities as a registrant.
6. Currently, the primary focus of the Applicant's activities in Canada is to provide investment management and advisory services to institutional clients, financial intermediaries, private clients and investment vehicles.
7. The Applicant has applied for registration under the Act as a "limited market dealer" in order to market and sell, to accredited investors and other exempt purchasers, securities of investment funds, with these dealer activities to be undertaken directly, or in conjunction with, or through, another appropriately registered dealer (including providing and receiving referrals to and from such dealer).
8. The Applicant will only participate in the distribution of securities in Ontario pursuant to exemptions from the prospectus requirement in the Act.
9. The Applicant does not propose to incorporate (or otherwise form or create) a separate Canadian company (or other entity) in order to carry out its proposed dealer activities in Ontario, which the Applicant believes can be carried out by itself on a more cost-effective and efficient basis but may establish one or more branch offices in Canada to facilitate its proposed activities in Canada.
10. In connection with its application for registration as a "limited market dealer", the Applicant has agreed to the imposition of terms and conditions (the New Terms and Conditions), set out in the attached Schedule A, on its registration under the Act as "limited market dealer" and as "investment counsel" and "portfolio manager", in replacement for the Existing Terms and Conditions.
AND UPON the Commission being satisfied that to do so would not be prejudicial to the public interest;
IT IS ORDERED, pursuant to section 218 of the Regulation, that, in connection with the registration of the Applicant under the Act as a dealer in the category of a "limited market dealer", the Applicant is hereby exempted from section 213 of the Regulation, provided that:
1. the Applicant complies with the New Terms and Conditions; and
2. this exemption shall terminate on the day that is three years after the date hereof, unless earlier renewed.
January 16, 2007
Terms and Conditions on Registration of
Lazard Asset Management (Canada), Inc.
1. Before the Applicant acts as an adviser to, or carries on any trading activities for, any person or company pursuant to its registration under the Act as a adviser or dealer, the Applicant shall (if it has not already done so) provide to that person or company a statement in writing that:
(i) discloses the non-resident status of the Applicant in Ontario;
(ii) identifies the Applicant's jurisdiction of residence, the name and address of the Applicant's agent for service of process in Ontario; and
(iii) disclose that legal rights may not be enforceable, as a result of the non-resident status of the Applicant in Ontario.
2. The Applicant will not change its agent for service of process in Ontario without giving the Director and its clients 30 days' prior notice of such change, which shall, in the case of the Director, be given by filing with the Commission (Attention: Manager, Registrant Regulation) a new Submission to Jurisdiction and Appointment of Agent for Service of Process, in the required form.
3. In addition to complying with the provisions of Part V of the Regulation applicable to the Applicant as a registrant, if the Applicant is holding any securities, funds, or other assets on behalf of a client it will ensure that such assets are:
(a) held under the custodianship of a custodian that:
(i) satisfies the requirement prescribed, for acting as the custodian or sub-custodian of the portfolio securities of a mutual fund, in Part 6 of National Instrument 81-102 -- Mutual Funds; and
(ii) is subject to the agreement announced by the Bank for International Settlements on July 1, 1988 concerning international convergence of capital measurement and capital standards; or
(b) deposited with or delivered to a depository or clearing agency that is authorized to operate a book-based system, if the asset is a security,
provided, that in each case, the assets are held on terms and in a manner consistent with the Applicant satisfying the obligations that are applicable to the Applicant as a registrant under Part V of the Regulation;
4. The Applicant will inform the Director immediately upon the Applicant becoming aware that:
(a) it has ceased to be registered with the Securities and Exchange Commission in the U.S.A. as an investment adviser under the Investment Advisers Act of 1940;
(b) its registration in any other jurisdiction is not being renewed or is being suspended or revoked;
(c) it is the subject of an investigation or disciplinary action by any financial services or securities regulatory authority or self-regulatory authority;
(d) that the licensing or registration of any of the individuals (an "Applicant Representative"), that are registered under the Act to act as an adviser or trade on its behalf, by any financial services or securities regulatory authority in any Canadian or foreign jurisdiction or self-regulatory authority is not being renewed or is being suspended or revoked; or
(e) that any Applicant Representative is the subject of an investigation or disciplinary action by any financial services or securities regulatory authority or self-regulatory authority in any Canadian or foreign jurisdiction.
5. The Applicant will pay any 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.
6. The Applicant will make any books and records (including electronic records) of the Applicant that are outside of Ontario readily accessible to the Commission, and will produce these books and records for the Commission within a reasonable time, upon the request of the Commission.
7. If the laws of the jurisdiction in which the Applicant's books and records are located prohibit production of these books and records in Ontario, without the consent of a client of the Applicant, the Applicant shall, upon the request of the Commission:
(a) so advise the Commission; and
(b) use its best efforts to obtain the client's consent to the production of the books and records.
8. The Applicant will, upon the Commission's request, provide a representative to assist the Commission in compliance and enforcement matters.
9. The Applicant and each of the individuals registered to act as an adviser or trade on behalf of the Applicant 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 clients -- 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 or orders would be enforceable against the Applicant if the Applicant were resident in Ontario.
10. If the laws of the Applicant's jurisdiction of residence that are otherwise applicable to the giving of evidence or production of documents prohibit the Applicant or a witnesses from giving evidence without the consent or leave of a client or 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 the client's consent to the giving of the evidence.
11. The Applicant will maintain appropriate registration and regulatory organization membership, in the Canadian or foreign jurisdiction of its principal operations, and if required, in its Canadian or foreign jurisdiction of residence.
12. Where the Applicant acts as an adviser to a mutual fund or a non-redeemable investment fund, the Applicant shall cause to be disclosed in any offering documents for the fund a statement in writing disclosing the non-resident status of the Applicant and the name and address of its agent for service of process in Ontario.