Mutual Reliance Review System for Exemptive Relief Applications -- National Instrument 33-109 -- Registration Information (NI 33-109) -- relief from certain filing requirements of NI 33-109 in connection with a bulk transfer of business locations and registered and non-registered individuals under an asset acquisition.
Applicable Ontario Statutory Provisions
National Instrument 33-109 -- Registration Information.
November 2, 2007
IN THE MATTER OF
THE SECURITIES LEGISLATION OF
ONTARIO, NEW BRUNSWICK AND NOVA SCOTIA
IN THE MATTER OF
THE MUTUAL RELIANCE REVIEW SYSTEM
FOR EXEMPTIVE RELIEF APPLICATIONS (MRRS)
IN THE MATTER OF
PEAK INVESTMENT SERVICES INC. /
SERVICES EN PLACEMENTS PEAK INC. (PISI)
AXA FINANCIAL SERVICES INC./
AXA SERVICES FINANCIERS INC. (AFSI)
(AFSI, together with PISI, the Filers)
MRRS DECISION DOCUMENT
The local securities regulatory authority or regulator (the Decision Maker) in each of the Jurisdictions has received an application from the Filers for a decision under the securities legislation of the Jurisdictions (the Legislation) exempting the Filers from requirements of National Instrument 33-109 -- Registration Information (NI 33-109) so as to permit the Filers to bulk transfer (the Bulk Transfer) to PISI under the National Registration Database (NRD), the office locations and certain registered and non-registered individuals that are associated on NRD with the Filers (the Representatives) following the acquisition of the assets of AFSI by PISI on or about October 1, 2007 (the Asset Acquisition) pursuant to an agreement dated June 22, 2007 (the Agreement) between AFSI, PISI to pursue business activities under the corporate name "PEAK Investment Services Inc. / Services en placements PEAK inc." (the Requested Relief).
Under the MRRS:
(a) the Ontario Securities Commission is the principal regulator for this application; and
(b) the MRRS decision document evidences the decision of each Decision Maker.
Defined terms contained in National Instrument 14-101 -- Definitions have the same meaning in this decision unless they are defined in this decision.
This decision is based on the following statements presented by the Filers:
1. PISI is registered as a mutual fund dealer or equivalent in all provinces of Canada, except for Newfoundland and Labrador and the territories, as a firm in group savings plan brokerage and investment contract dealer and scholarship plan dealer in Quebec under An Act respecting the distribution of financial products and services (R.S.Q., chapter D-9.2) (the Distribution Act) and as a limited market dealer in Ontario. PISI is a member of the Mutual Fund Dealers Association of Canada (the MFDA).
2. AFSI is registered as a mutual fund dealer or equivalent in British Columbia, New Brunswick, Nova Scotia, Ontario and Quebec, as a firm in group savings plan brokerage and scholarship plan dealer in Quebec under the Distribution Act and as a limited market dealer in Ontario. AFSI is a member of the MFDA.
3. PISI is incorporated pursuant to the laws of the province of Quebec (Companies Act (R.S.Q.c.C-38, Part 1A). PISI related entities also include PEAK Securities Inc., PEAK Insurance Services Inc. (PEAK Insurance), and PEAK Financial Services Inc. (PEAK Financial). PEAK Insurance and PEAK Financial are not a securities regulated entity.
4. Pursuant to the Agreement, AFSI will also transfer to PISI certain client accounts holding segregated funds as well as certain salespersons who are authorized to act in the sector of the insurance of persons and pursue activities as a representative in insurance of persons. PISI is registered in insurance of persons in Quebec and is in the process of registering, in the equivalent, in other provinces of Canada.
5. PISI and AFSI, to the best of their knowledge, are not in default of any of the requirements of the Legislation in the Jurisdictions.
6. The Asset Acquisition is proposed to take effect on or about October 1, 2007.
7. As a result of the Asset Acquisition, all business locations and the Representatives of AFSI will be transferred to PISI.
8. The Asset Acquisition does not involve any third parties. PISI will carry on all mutual fund dealer business of AFSI in substantially the similar manner with substantially similar directors and the same mutual fund salespersons as AFSI.
9. For the purposes of NRD, the successor registrant to AFSI will be PISI.
10. The Filers have informed their Representatives that following the Asset Acquisition the representatives of AFSI will be employed in the same capacity by PISI.
11. The Filers have organized the Bulk Transfer on NRD of all affected business locations and Representatives to PISI.
12. The Asset Acquisition will not be contrary to public interest and will have no negative consequences on the ability of PISI to comply with all applicable regulatory requirements or the ability to satisfy any obligations of its clients and the clients of AFSI.
13. Given the number of business locations and the number of Representatives of AFSI, it would be exceedingly difficult and onerous to transfer each business location and each Representative to PISI from AFSI in accordance with the requirements set out in the Legislation.
14. As a result of NRD system constraints, and the significant number of Representatives to be transferred from AFSI to PISI, it would be difficult, costly, and time consuming to effect the transfer as a separate and distinct transfer of branch and sub-branch office locations and each Representative while ensuring that all such transfers occur at the same time in order to preclude any disruption of individual registrations or PISI business activities.
15. A separate but similar relief order will be granted in Quebec pursuant to the Distribution Act.
Each of the Decision Makers is satisfied that the test contained in the Legislation that provides the Decision Maker with the jurisdiction to make the decision has been met.
The decision of the Decision Makers pursuant to the Legislation is that the Requested Relief is granted, and the following requirements of the Legislation shall not apply to the Filers in respect of the Representatives and business locations that will be bulk transferred from AFSI to PISI:
(a) the requirement to submit a notice regarding the termination of each employment, partner, or agency relationship under Section 4.3 of NI 33-109;
(b) the requirement to submit a notice regarding each individual who ceases to be a permitted individual under Section 5.2 of NI 33-109;
(c) the requirement to submit a registration application for each individual applying to become a registered individual under Section 2.2 of NI 33-109;
(d) the requirement to submit a Form 33-109F4 for each permitted individual under Section 3.3 of NI 33-109; and
(e) the requirement under Section 3.2 of NI 33-109 to notify the regulator of a change to the business location information in Form 33-109F3
provided that the Filers make acceptable arrangements with CDS INC. for the payment of the costs associated with the Bulk Transfer, and make such payment in advance of the Bulk Transfer.