J.P. Morgan Securities LLC

Headnote

Filer exempted from section 13.12 [restriction on lending to clients] of National Instrument 31-103 Registration Requirements, Exemptions and Ongoing Registrant Obligations The filer is applying for registration as a restricted dealer The filer is a registered broker-dealer with the SEC and a member of FINRA Terms and conditions on the exemptions require that: (i) the head office or principal place of business of the filer be in the USA; (ii) the filer be registered under the securities legislation of the USA in a category of registration that permits it to carry on the activities in the USA that registration as an investment dealer would permit it to carry on in Ontario, (iii) by virtue of the securities legislation of the USA, the filer is subject to requirements in respect of lending money, extending credit or providing margin to clients that result in substantially similar regulatory protections to those provided for under the capital and margin requirements of IIROC, that would be applicable if the filer if it were registered under the Act as an investment dealer and were a member of IIROC.

Instruments Cited

Multilateral Instrument 11-102 Passport System, s. 4.7.

National Instrument 14-101 Definitions.

National Instrument 31-103 Registration Requirements and Exemptions, ss. 13.12, 15.1.

November 11, 2011

IN THE MATTER OF

THE SECURITIES LEGISLATION OF

ONTARIO

(the "Jurisdiction")

AND

IN THE MATTER OF

THE PROCESS FOR EXEMPTIVE RELIEF

APPLICATIONS IN MULTIPLE JURISDICTIONS

AND

IN THE MATTER OF

J.P. MORGAN SECURITIES LLC

("Filer")

DECISION

Background

The principal regulator in the Jurisdiction has received an application from the Filer (the "Application") for a decision under the securities legislation of the Jurisdiction of the principal regulator (the "Legislation") for an exemption from the requirement contained in section 13.12 [restriction on lending to clients] of National Instrument 31-103 Registration Requirements, Exemptions and Ongoing Registrant Obligations ("NI 31-103") that a registrant must not lend money, extend credit or provide margin to a client (the "Exemption Sought").

Under the Process for Exemptive Relief Applications in Multiple Jurisdictions (for a passport review application):

(a) the Ontario Securities Commission is the principal regulator for this Application, and

(b) the Filer has provided notice that section 4.7(1) of Multilateral Instrument 11-102 Passport System ("MI 11-102") is being relied upon in British Columbia, Alberta, Saskatchewan, Manitoba, Québec, New Brunswick, Nova Scotia, Prince Edward Island, Newfoundland and Labrador, Yukon, Northwest Territories and Nunavut (and together with the Jurisdiction, the "Canadian Jurisdictions").

Interpretation

Terms defined in National Instrument 14-101 Definitions and MI 11-102 have the same meaning if used in this decision, unless otherwise defined or the context otherwise requires.

Representations

This decision is based on the following facts represented by the Filer:

1. The Filer is a company incorporated under the laws of the State of Delaware. Its head office is located at 383 Madison Avenue, New York, NY 10179, United States of America ("U.S.A.").

2. The Filer is a wholly owned subsidiary of J.P. Morgan Securities Holdings LLC, a Delaware corporation, and an indirect wholly owned subsidiary of JP Morgan Chase & Co., a Delaware corporation.

3. The Filer is registered as a broker-dealer with the United States ("U.S.") Securities and Exchange Commission ("SEC"), and is a member of the Financial Industry Regulatory Authority ("FINRA"). This registration permits the Filer to carry on in the U.S.A., being its home jurisdiction, substantially similar activities that registration as an investment dealer would authorize it to carry on in the Jurisdiction if the Filer were registered under the Legislation as an investment dealer.

4. The Filer is a member of major securities exchanges, including the NASDAQ and NYSE Euronext ("NYSE").

5. In addition, the Filer is relying on the international dealer exemption under section 8.18 of NI 31-103 and the international adviser exemption under section 8.26 of NI 31-103 in the Canadian provinces of British Columbia, Alberta, Saskatchewan, Manitoba, Québec, New Brunswick, Nova Scotia, Prince Edward Island, Newfoundland and Labrador.

6. The Filer acts as a primary dealer in U.S. government securities, makes markets in money market instruments and U.S. government agency securities, underwrites and trades corporate debt and asset-backed securities, municipal bonds and notes, common and preferred stock and convertible bond offerings, advises clients on business strategies, capital structures and financial strategies, and structures derivative transactions to meet client needs. The Filer also enters into repurchase and resale agreements, including matched-book transactions, and securities borrowed and loaned transactions to finance securities activities.

7. The Filer is registered, or has applied to be registered, as a restricted dealer, with terms and conditions including that it may only deal with permitted clients as defined in section 1.1. of NI 31-103, in the Canadian Jurisdictions. As a restricted dealer under the securities legislation of the Canadian Jurisdictions, the Filer is subject to the prohibition on lending money, extending credit or providing margin to a client in section 13.12 of NI 31-103.

8. The Filer may engage in activities which may be considered lending money, extending credit or providing margin to clients. All such activities are conducted in compliance with the rules of its home jurisdiction.

9. In certain comments received on NI 31-103, after it was published for comment, it was suggested that the prohibitions in section 13.12 should not apply to certain dealers that are members of foreign self-regulatory organizations, or subject to regulatory requirements in a foreign jurisdiction, where the dealer is subject to margin regimes similar to that imposed by the Investment Industry Regulatory Organization of Canada ("IIROC"). The Canadian Securities Administrators responded to these comments by suggesting that these circumstances could be considered on a case-by-case basis, through exemption applications, and that an exemption should be made available to registrants who have "adequate measures in place to address the risks involved and other related regulatory concerns".

10. The Filer is subject to regulations of the Board of Governors of the U.S.A. Federal Reserve System ("FRB"), the SEC, FINRA and the NYSE regarding the lending of money, extension of credit and provision of margin to clients (the "U.S.A. Margin Regulations") that provide protections that are substantially similar to the protections provided by the requirements regarding the lending of money, extension of credit and provision of margin to clients to which dealer members of IIROC are subject. In particular, the Filer is subject to the margin requirements imposed by the FRB, including Regulations T, U and X, under applicable SEC rules and under NYSE Rule 431.The Filer is in compliance in all material respects with all applicable U.S.A. Margin Regulations.

Decision

The principal regulator is satisfied that the decision meets the test set out in the Legislation for the principal regulator to make the decision.

The decision of the principal regulator under the Legislation is that the Exemption Sought by the Filer is granted so long as:

(a) the head office or principal place of business of the Filer is in the U.S.A.;

(b) the Filer is registered under the securities legislation of the U.S.A. in a category of registration that permits it to carry on the activities in the U.S.A. that registration as an investment dealer would permit it to carry on in the Jurisdiction;

(c) by virtue of the registration referred to in paragraph (b), including required membership in one or more self-regulatory organizations, the Filer is subject to requirements in respect of its lending money, extending credit or providing margin to clients (including clients that are located in Canada) that result in substantially similar regulatory protections to those provided for under the capital and margin requirements of IIROC that would be applicable to the Filer if it were registered under the Legislation as an investment dealer and were a member of IIROC.

It is further the decision of the principal regulator that the Exemption Sought shall expire on the date that is the earlier of:

(a) the date that the Filer's registration as a restricted dealer in the Jurisdiction expires or is revoked; and

(b) March 31, 2013.