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) -- 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 in accordance with section 3.4 of Companion Policy 33-109CP to NI 33-109.
Applicable Legislative Provisions
Multilateral Instrument 11-102 Passport System, s. 4.7(1).
National Instrument 33-109 Registration Information, ss. 2.2, 2.3, 2.5, 3.2, 4.2, 7.1.
Companion Policy 33-109CP to National Instrument 33-109 Registration Information, s. 3.4.
May 16, 2013
IN THE MATTER OF
THE SECURITIES LEGISLATION OF
IN THE MATTER OF
THE PROCESS FOR EXEMPTIVE RELIEF
APPLICATIONS IN MULTIPLE JURISDICTIONS
IN THE MATTER OF
KEYBASE FINANCIAL GROUP INC.
W. H. STUART MUTUALS LTD. (the Filers)
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 requirements contained in sections 2.2, 2.3, 2.5, 3.2 and 4.2 of National Instrument 33-109 Registration Information (NI 33-109) pursuant to section 7.1 of NI 33-109 to allow the bulk transfer (the Bulk Transfer) of registered individuals and business locations of W. H. Stuart Mutuals Ltd. (Stuart) to Keybase Financial Group Inc. (Keybase), on or about the Bulk Transfer Date (defined below), 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:
(a) the Ontario Securities Commission is the principal regulator for this application; and
(b) the Filers have provided notice that subsection 4.7(1) of Multilateral Instrument 11-102 Passport System (MI 11-102) is intended to be relied upon by the Filers in all of the other provinces of Canada (other than Ontario) and in the territory of Nunavut.
Terms defined in MI 11-102 and National Instrument 14-101 Definitions have the same meaning if used in this decision, unless otherwise defined.
The decision is based on the following facts represented by the Filers:
1. Stuart is a corporation incorporated under the laws of Ontario and has its head office in Ontario.
2. Stuart is registered as mutual fund dealer in all provinces of Canada other than Québec.
3. Stuart is a member of the Mutual Fund Dealers Association of Canada (the MFDA).
4. Keybase is a corporation governed under the laws of Canada and has its head office in Ontario.
5. Keybase is registered as a mutual fund dealer and exempt market dealer in all provinces of Canada and in the territory of Nunavut.
6. Keybase is a member of the MFDA.
7. Stuart and Keybase have entered into an asset purchase agreement (the Purchase Agreement) providing for the acquisition by Keybase of substantially all the assets of Stuart, including the transfer of client accounts and the transfer of registered individuals from Stuart to Keybase on or about May 31, 2013 or such earlier date as the parties may agree (the Bulk Transfer Date).
8. Given the significant number of locations and number of registered individuals of Stuart to be transferred to Keybase, it would be unduly time-consuming to transfer each to Keybase in accordance with the requirements of NI 33-109. Moreover, it is imperative that the transfer of the locations and individuals occur on the same date, in order to ensure that there is no break in registration or the ability of registered individuals to continue to service clients.
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 Filers make acceptable arrangements with CDS Inc. for the payment of the costs associated with the Bulk Transfer.