Cantor Fitzgerald Canada Corporation and Versant Partners Inc.

Decision

Headnote

Under paragraph 4.1(1)(a) of National Instrument 31-103 Registration Requirements, Exemptions and Ongoing Registrant Obligations a registered firm must not permit an individual to act as a dealing, advising or associate advising representative of the registered firm if the individual acts as an officer, partner or director of another registered firm that is not an affiliate of the first-mentioned firm. The firms require relief for a limited period of time. The individual will have sufficient time to adequately serve both firms. As one firm is inactive, conflicts of interest are unlikely to arise. The firms have policies in place to handle potential conflicts of interest. The firms are exempted from the prohibition.

Applicable Legislative Provisions

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

National Instrument 31-103 Registration Requirements, Exemptions and Ongoing Registrant Obligations, ss. 4.1, 15.1.

August 24, 2012

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

CANTOR FITZGERALD CANADA CORPORATION

(CANTOR CANADA)

AND

VERSANT PARTNERS INC.

(VERSANT) (CANTOR CANADA and VERSANT are,

collectively, THE FILERS)

DECISION

Background

The principal regulator in the Jurisdiction has received an application from the Filers for a decision under the securities legislation of the Jurisdiction of the principal regulator (the Legislation) for relief from the requirement in paragraph 4.1(1)(a) of National Instrument 31-103 Registration Requirements, Exemptions and Ongoing Registrant Obligations (NI 31-103), pursuant to section 15.1 of NI 31-103, to permit Michael Jams, a director and the President and Chief Executive Officer of Versant, to be registered as both a dealing representative of Cantor Canada and as the ultimate designated person, officer and a director of Versant for a limited period of time to maintain the registration of Versant for purposes of reorganizing its affairs and soliciting prospective purchasers of Versant (the Exemption Sought). As per IIROC's requirement, Michael Jams is to remain the ultimate designated person of Versant in order for Versant to be granted inactive status until March 29, 2013 or such earlier time as Versant is either de-registered or sold.

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

(a) the Ontario Securities Commission is the principal regulator for this application; and

(b) the Filers have provided notice that section 4.7(1) of Multilateral Instrument 11-102 Passport System (MI 11-102) is intended to be relied upon by the Filers in Alberta, British Columbia, Manitoba, New Brunswick, Nova Scotia, Quebec and Saskatchewan (with Ontario, the 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.

Representations

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

1. Cantor Canada is registered as (i): an investment dealer in Alberta, British Columbia, Manitoba, New Brunswick, Newfoundland and Labrador, Nova Scotia, Ontario, Prince Edward Island, Québec, Saskatchewan, Yukon, Northwest Territories and Nunavut; (ii) a dealer member of the Investment Industry Regulatory Organization of Canada (IIROC); and (iii) a participating organization of the Toronto Stock Exchange (TSX).

2. Cantor Canada engages primarily in institutional trading activities

3. Versant is registered as (i) an investment dealer in Alberta, British Columbia, Manitoba, New Brunswick, Nova Scotia, Ontario, Quebec, Saskatchewan; (ii) a dealer member of IIROC; and (iii) a participating organization/member or subscriber of the TSX (including Select), CDNX, Pure, Alpha and Omega.

4. Versant is primarily engaged in the business of providing financial services (including investment banking, institutional sales and trading and research) in Canada.

5. The Filers are not, to the best of their knowledge, in default of any requirement of securities legislation in any of the Jurisdictions.

6. Cantor Canada has provided notice pursuant to Section 11.9 of NI 31-103 of the proposed transfer (the Proposed Transaction) of certain assets of Versant to Cantor Canada, including but not limited to certain of its clients, certain fixed assets of Versant, the name Versant (post IIROC de-registration of Versant) and related intellectual property and the rights and benefits under Versant's office lease in Montreal, Quebec. In addition to the Proposed Transaction, Cantor Canada will be offering employment to certain employees of Versant.

7. The Proposed Transaction is designed to permit Cantor Canada to expand its operations in the functional areas of institutional equities sales and trading, investment banking, and equity research in a timely and efficient manner. It is intended that key management and production staff of Versant will become employed by Cantor Canada. Subsequent to the close of the transaction and integration of the expanded business lines, Cantor Canada intends to leverage its expanded Canadian platform with additional market hires of production staff to complement the experienced Versant professionals who will have joined Cantor Canada.

8. Michael Jams is a director, the President and Chief Executive Officer, and a dealing representative of Versant and acts as Versant's ultimate designated person. Following the closing of the Proposed Transaction, it is intended that Michael Jams will be an officer of Cantor Canada and will be registered with Cantor Canada as a dealing representative, and will continue to be a director and officer of Versant and act as the ultimate designated person of Versant (the Dual Registration).

9. Versant has undertaken to IIROC that it will not conduct any registrable securities activities following the closing of the Proposed Transaction without prior IIROC approval, and is being granted "inactive status" by IIROC effective as of the closing date of the Proposed Transaction for a fixed period ending March 29, 2013, for the purpose of reorganizing its affairs and soliciting potential purchasers of Versant. Prior to the closing date of the Proposed Transaction, clients of Versant will be provided with notice of the Proposed Transaction that includes information about the transfer of client accounts to Cantor Canada as well as information that Versant will no longer offer brokerage services to its clients.

10. There is a valid business reason for the Dual Registration in that it will permit Versant to retain its IIROC membership with "inactive status" and its investment dealer registration while it reorganizes its affairs and solicits potential purchasers.

11. Michael Jams will have sufficient time to adequately meet his obligations to each firm.

12. The Filers have in place policies and procedures to address conflicts of interest and the inactive status of Versant will facilitate this, by largely or entirely avoiding any conflicts of interest.

13. Furthermore, Cantor Canada has compliance and supervisory policies and procedures in place to monitor the conduct of its representatives.

14. Cantor Canada will supervise Michael Jams' activities on behalf of Versant, including by holding meetings regularly with him and by obtaining regular status reports from him.

15. In the absence of the Exemption Sought, Michael Jams would be prohibited under paragraph 4.1(1)(a) of NI 31-103 from acting as a dealing representative of Cantor Canada while also acting as an officer, director and the Ultimate Designated Person of Versant.

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 is granted provided that the Exemption Sought expires on March 29, 2013.

"Marrianne Bridge"
Deputy Director,
Compliance and Registrant Regulation
Ontario Securities Commission