Section 80 of the Commodity Futures Act (Ontario) -- Relief from the adviser registration requirements of subsection 22(1)(b) of the CFA in respect of acting as an adviser to a pension fund sponsored by an affiliate of the applicant for the benefit of the employees of the affiliate, with respect to commodity futures contracts and/or commodity futures options that are traded on a commodity futures exchange.
Commodity Futures Act, R.S.O. 1990, c. C.20, as am., ss. 22(1)(b), 80.
Securities Act, R.S.O. 1990, c. S.5, as am.
Rule 35-502 -- Non Resident Advisers.
IN THE MATTER OF
THE COMMODITY FUTURES ACT,
R.S.O. 1990, CHAPTER C.20, AS AMENDED
IN THE MATTER OF
DUPONT CAPITAL MANAGEMENT CORPORATION
(Section 80 of the CFA)
UPON the application (the Application) of DuPont Capital Management Corporation (the Applicant) for an order pursuant to section 80 of the CFA that the Applicant and any individuals engaging in, or holding themselves out as engaging in, the business of advising others when acting on behalf of the Applicant (the Representatives) be exempt, for a period of five years, from the registration requirements of paragraph 22(1)(b) of the CFA in respect of acting as an adviser to the E.I. du Pont Canada Company Pension Plan (the Fund) with respect to commodity futures contracts and/or commodity futures options that are traded on a commodity futures exchange;
AND UPON considering the Application and the recommendation of staff of the Commission;
AND UPON the Applicant having represented to the Commission that:
1. The Applicant is a corporation incorporated under the laws of Delaware, is not ordinarily resident in Ontario and is a wholly-owned subsidiary of E.I. DuPont de Nemours and Company (DuPont).
2. The Applicant is registered as an investment adviser with the United States Securities and Exchange Commission (the SEC). The Applicant is not registered in any capacity under the CFA or the Securities Act (Ontario) (the OSA). However, the Applicant relies on the international adviser exemption set out in section 8.26 of National Instrument 31-103 Registration Requirements, Exemptions and Ongoing Registrant Obligations in Alberta, British Columbia, Manitoba, Ontario and Saskatchewan.
3. The Applicant is exempt in the U.S. from the advisor registration requirement of the Commodity Futures Trading Commission with respect to advising in commodity futures contracts and/or commodity futures options that are traded on a commodity futures exchange.
4. E.I. du Pont Canada Company (DuPont Canada) is incorporated under the laws of the Canada Business Corporations Act, and carries on manufacturing and other business activities in Canada. DuPont Canada is also a wholly-owned subsidiary of DuPont.
5. DuPont Canada established the Fund under the laws of Ontario for the benefit of its employees in Canada, and is the administrator and sponsor of the Fund.
6. DuPont Canada has decided that it is prudent to continue to retain the investment services of the Applicant, an affiliated company, pursuant to an investment management agreement, to provide investment advice to the Fund with respect to securities, commodity futures contracts and/or commodity futures options.
7. Pursuant to section 7.6 (Advising Pension Funds of Affiliates) of OSC Rule 35-502 Non Resident Advisers (Rule 35-502), the Applicant is exempt from the adviser registration requirement of the OSA with respect to acting as an adviser for the Fund since the Applicant is not ordinarily resident in Ontario and the Fund is sponsored by Dupont Canada, an affiliate of the Applicant, for the benefit of the employees of Dupont Canada.
8. Paragraph 22(1)(b) of the CFA prohibits a person or company from acting as an adviser unless the person or company is registered as an adviser under the CFA, or is registered as a partner or an officer of a registered adviser and is acting on behalf of a registered adviser. Under the CFA, "adviser" means a person or company engaging in or holding himself, herself or itself out as engaging in the business of advising others as to trading in "contracts", and "contracts" means commodity futures contracts and commodity futures options.
9. There is presently no rule under the CFA that provides an exemption from the adviser registration requirement in paragraph 22(1)(b) of the CFA for a person or company acting as an adviser in respect of commodity futures options and commodity futures contracts that is similar to the exemption from the adviser registration requirement in section 25(1)(c) of the OSA for acting as an adviser (as defined in the OSA) in respect of securities that is provided under section 7.6 of Rule 35-502.
AND UPON being satisfied that it would not be prejudicial to the public interest for the Commission to grant the exemption requested on the basis of the terms and conditions proposed;
IT IS ORDERED pursuant to section 80 of the CFA that the Applicant and its Representatives are exempted from the requirements of paragraph 22(1)(b) of the CFA in respect of acting as an adviser in connection with the Fund, provided that:
(a) The Applicant and its Representatives are appropriately registered or licensed to advise the Fund with respect to commodity futures contracts and/or commodity futures options that are traded on a commodity futures exchange pursuant to the applicable legislation of their principal jurisdiction, or are entitled to rely on appropriate exemptions from such registrations or licenses;
(b) this Order shall expire five years after the date hereof.
March 26, 2013