Decision re-stating the original decision dated January 24, 2006 to reflect the extension of the call centre agreement until November 20, 2008. Two US-based applicants will have representatives located in Ontario. They will conduct trades in securities with, or on behalf of, customers or clients who are not residents of Canada and in doing so the representatives will not be required to be registered.
Securities Act, R.S.O. 1990, c. S.5, as am., s. 25.
IN THE MATTER OF
THE SECURITIES ACT,
R.S.O. 1990, CHAPTER S.5, AS AMENDED
IN THE MATTER OF
TD AMERITRADE HOLDING CORPORATION,
TD AMERITRADE SERVICES COMPANY, INC. AND
TD AMERITRADE, INC.
WHEREAS on January 24, 2006 the Ontario Securities Commission (the Commission) made a ruling pursuant to subsection 74(1) of the Act that TD Ameritrade Representatives (as defined below) who work in a call centre located in London, Ontario that answer inbound phone calls from Non-Canadian Clients (as defined below) are not subject to paragraph 25(1)(a) of the Act subject to certain terms and conditions (the Original Decision);
AND WHEREAS the Original Decision is in effect until the termination of the Call Centre Agreement (as defined below) on September 30, 2006 unless the TD Ameritrade Group (as defined below) notifies the Director of the Commission that the Call Centre Agreement will be terminated at a later date;
AND WHEREAS the TD Ameritrade Group has notified the Director of the Commission that the Call Centre Agreement has been extended until November 30, 2008;
AND WHEREAS the Original Decision applied only to TD Ameritrade Holding Corporation (formerly known as Ameritrade Holding Corporation, TD AHC) and TD Ameritrade Services Company, Inc. (formerly known as Ameritrade Services Company, Inc., TD ASCI);
AND WHEREAS TD Waterhouse Investor Services, Inc. is now known as TD Ameritrade, Inc. (TDA);
AND UPON the application of TD AHC, TD ASCI and TDA (together the TD Ameritrade Group) to the Commission for an order pursuant to subsections 144(1) and 74(1) of the Securities Act (Ontario) (the Act) varying the Original Decision and amending and restating it as set out below;
AND UPON considering the Application and the recommendation of the staff of the Commission;
AND UPON the TD Ameritrade Group having represented to the Commission as follows:
1. TD AHC (formerly known as Ameritrade Holding Corporation) is a corporation formed under the laws of the state of Delaware.
2. TD ASCI (formerly known as Ameritrade Services Company, Inc.) is a corporation formed under the laws of the state of Delaware, and is an indirect subsidiary of TD AHC.
3. TDA (formerly TD Waterhouse Investor Services, Inc.) is a corporation incorporated under the laws of the State of New York, and is registered as a broker-dealer with the U.S. Securities and Exchange Commission (the SEC).
4. TD Waterhouse Canadian Call Center Inc. (TDWCCC) is a corporation incorporated under the federal laws of Canada.
5. As part of an acquisition transaction which closed on January 24, 2006 (the Acquisition), TDA and TDWCCC became indirect subsidiaries of TD AHC.
6. On January 24, 2006 The Toronto-Dominion Bank (TD Bank) entered into a Call Centre Services Agreement with TDA and TD ASCI (Call Centre Agreement) whereby TD Bank agreed to provide certain call centre services as described therein (Call Centre Services) until September 30, 2006.
7. On July 5, 2006 the Call Centre Agreement was amended and restated (the Amended and Restated Call Centre Agreement) to provide for the continued provision of Call Centre Services until November 30, 2008, unless otherwise terminated or further extended.
8. The TD Ameritrade Group has notified the Director of the Commission that the term of the Call Centre Agreement has been extended from September 30, 2006 to November 30, 2008 pursuant to the Amended and Restated Call Centre Agreement.
9. Pursuant to the Amended and Restated Call Centre Agreement, representatives of the TD Ameritrade Group will consist of employees, subcontractors, agents and other third parties of, or appointed by, TD Bank who will provide the Call Centre Services in Ontario and who are either in direct communication with the customers of TD Ameritrade Group, or are line supervisors (the TD Ameritrade Representatives). Also pursuant to the Call Centre Agreement, the TD Ameritrade Representatives will be dedicated solely to providing Call Centre Services to TD Ameritrade Group only and will not be utilized to provide services to any other entity or business.
10. The TD Ameritrade Representatives will be dedicated to answering phone calls from clients who are not resident in Canada (Non-Canadian Clients) and individuals (NI 35-101 Clients) referred to in section 2.1 of National Instrument 35-101 -- Conditional Exemption from Registration for United States Broker-Dealers and Agents (NI 35-101) subject to obtaining any relief required under NI 35-101 to deal with such clients.
11. Within the call centre located in London, Ontario, TD Ameritrade Group's call centre operations are currently operated in accordance with all applicable rules established by various U.S. regulatory authorities including all applicable rules established by the SEC and the New York Stock Exchange (NYSE), and will continue to be subject to the same procedures that apply to TDA's existing U.S. business. TD Ameritrade Group's call centre operations will be examined at least annually by representatives from TD Ameritrade Group's compliance staff, and will be supervised by one or more properly qualified individuals acceptable to the NYSE.
12. TD Ameritrade Representatives will continue to comply with all registration and other requirements of applicable U.S. securities legislation in respect of trades conducted with, or on behalf of, Non-Canadian Clients.
13. TD Ameritrade Group will not establish accounts for, or trade securities with, or on behalf of, persons or companies who are resident in Canada except to the extent that TDA and its agents now conduct trading in Canada in accordance with dealer registration and prospectus exemptions that are available pursuant to NI 35-101.
14. Within the call centre located in London, Ontario, TD Ameritrade Group's call centre operations will be an opaque presence, inaccessible to any person or company other than Non-Canadian Clients and NI 35-101 Clients who direct inquiries to the TD Ameritrade Group.
AND UPON the Commission being satisfied that to do so would not be prejudicial to the public interest;
IT IS ORDERED, pursuant to subsection 144(1) of the Act, that the Original Decision is hereby varied.
IT IS RULED, pursuant to subsection 74(1) and 144(1) of the Act that:
(a) the TD Ameritrade Representatives shall not be subject to the requirements of paragraph 25(1)(a) of the Act where the TD Ameritrade Representatives act on behalf of TD Ameritrade Group in respect of trades in securities with or on behalf of Non-Canadian Clients conducted through the call centre located in London, Ontario provided that the TD Ameritrade Representatives comply with all registration and other requirements of applicable securities legislation in the U.S.; and
(b) TD Ameritrade Group the shall not be subject to the requirements of paragraph 25(1)(a) of the Act in respect of trading by it in securities with or on behalf of Non-Canadian Clients conducted through the call centre located in London, Ontario provided that:
(i) an TD Ameritrade Representative acts on behalf of TD Ameritrade Group in respect of such trading; and
(ii) TD Ameritrade Group complies with all registration and other requirements of applicable securities legislation in the U.S.
October 20, 2006
"Wendell S. Wigle"
"David L. Knight"