BMO Nesbitt Burns Inc. and BMO Nesbitt Bunrs Ltée/Ltd

Headnote

Multilateral Instrument 11-102 Passport System -- National Policy 11-203 Process for Exemptive Relief Applications in Multiple Jurisdictions -- National Instrument 33-109 Registration Information (NI 33-109) -- Derivatives Regulation (Québec) relief from certain filing requirements of NI 33-109 and Derivatives Regulation (Québec) in connection with a bulk transfer of business locations and registered and non-registered individuals under an amalgamation in accordance with section 3.4 of Companion Policy 33-109CP to NI 33-109.

Applicable Legislative Provisions

Multilateral Instrument 11-102 Passport System.

National Instrument 33-109 Registration Information, ss. 2.2, 2.5, 3.2, 4.1, 5.2.

October 31, 2012

IN THE MATTER OF

THE SECURITIES LEGISLATION OF

QUÉBEC AND ONTARIO

(the Territories)

AND

IN THE MATTER OF

THE PROCESS FOR EXEMPTIVE RELIEF

APPLICATIONS IN MULTIPLE JURISDICTIONS

AND

IN THE MATTER OF

THE DERIVATIVES LEGISLATION OF QUÉBEC

AND

IN THE MATTER OF

BMO NESBITT BURNS INC. (BNBI)

BMO NESBITT BUNRS LTÉE/LTD (BNBL)

(the Filers)

DECISION

Background

The securities regulatory authority or regulator in each of the Territories (Decision Maker) have received an application from the Filers for a decision under the securities legislation of the Territories (the Legislation) for relief from sections 2.2, 2.3, 2.5, 2.6, 3.2 and 4.2 pursuant to section 7.1 of National Instrument 33-109 Registration Information (NI 33-109) to allow the bulk transfer (the Bulk Transfer) of all the registered individuals and all the locations of BNBL to BNBI, on or about November 1, 2012, in accordance with section 3.4 of the Companion Policy to NI 33-109 (the Exemption Sought).

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

(a) the Autorité des marchés financiers 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 in Alberta, British Columbia, Manitoba, New Brunswick, Newfoundland and Labrador, Northwest Territories, Nova Scotia, Nunavut, Prince Edward Island, Québec, Saskatchewan and Yukon (with Ontario, the Jurisdictions).

The Autorité des marchés financiers also received an application from the Filers for a decision under the derivatives legislation of Québec for relief from section 11.1 of Derivatives Regulation (Québec) (the Regulation) pursuant to section 86 of the Derivatives Act (Québec) (the Derivatives Legislation) to allow the Bulk Transfer of all registered individuals under the Derivatives Legislation and all of the associated locations of BNBL to BNBI, on or about November 1, 2012, in accordance with section 3.4 of the Companion Policy to NI 33-109 (the Derivatives Exemption Sought).

Interpretation

Terms defined in MI 11-102 and National Instrument 14-101 Definitions have the same meanings in this decision unless they are otherwise defined in this decision.

Representations

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

1. The Filers are both subsidiaries of Bank of Montreal.

2. BNBI is an Investment Industry Regulatory Organization of Canada (IIROC) member registered as an investment dealer in the Jurisdictions. BNBI is also registered as a derivatives dealer in Québec, portfolio manager and futures commission merchant in Ontario, and futures commission merchant in Manitoba. BNBI has applied for registration as a financial planning firm in Québec under the Act respecting the distribution of financial products and services.

3. BNBL is an IIROC member registered in the categories of investment dealer, derivatives dealer, and financial planning firm in Québec

4. The Filers will amalgamate on November 1, 2012 and continue carrying on registrable activities as BMO Nesbitt Burns Inc. (Amalco).

5. IIROC has approved the proposed amalgamation of the Filers.

6. The Filers, to the best of their knowledge, are not in default of any requirements of the securities legislation in any Jurisdiction and/or Derivatives Legislation.

7. On or about November 1, 2012, as a result of the amalgamation, all of the current registrable activities of the Filers will become the responsibility of Amalco. Amalco will assume all of the existing registrations and approvals for all of the registered individuals and all of the locations of the Filers.

8. BNBI and BNBL currently function as a single business and therefore business will continue as normal following the amalgamation. There will be no disruption to BNBI's ability to advise and trade on behalf of its clients and BNBL's clients upon the amalgamation. All clients will be notified of the amalgamation.

9. Amalco will carry on the same securities business carried on by BNBI and BNBL prior to the amalgamation. All personnel and business locations will remain the same.

10. Given the significant number of locations and registered individuals of BNBL, it would be extremely difficult and unduly time-consuming to transfer each individual registration to Amalco in accordance with the requirements of 33-109. Moreover, it is important that the transfer of the locations and individuals occur on the same date, in order to ensure that there is no lapse in registration.

11. The Bulk Transfer will not be contrary to the public interest and will have no negative consequence on the ability of the Filers to comply with all applicable regulatory requirements or the ability to satisfy obligations to their clients.

Decision

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

The decision of the principal regulator under the Legislation is that the Exemption Sought is granted provided that the Filers make acceptable arrangements with CDS Inc. for the payment of the costs associated with the Bulk Transfer, and makes such payment in advance of the Bulk Transfer.

The decision of Autorité des marches financiers under the Derivatives Legislation is that the Derivatives Exemption Sought is granted provided that the Filers make acceptable arrangements with CDS Inc. for the payment of the costs associated with the Bulk Transfer, and makes such payment in advance of the Bulk Transfer.