Under paragraph 4.1(1)(b) 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 is registered as a dealing, advising or associate advising representative of another registered firm. The Filers are affiliated entities and have valid business reasons for the individuals to be registered with both firms. The Filers have policies in place to handle potential conflicts of interest. The Filers 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.
October 15, 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
EPOCH INVESTMENT PARTNERS, INC.
TD ASSET MANAGEMENT INC.
TD WATERHOUSE PRIVATE INVESTMENT COUNSEL INC.
The principal regulator in the Jurisdiction has received an application from Epoch, TDAM and TDWPIC (each a Filer, and together, the Filers) for a decision under the securities legislation of the Jurisdiction of the principal regulator (the Legislation) for relief from the restriction under paragraph 4.1(1)(b) 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 John Andrew Miller (Miller), currently an advising and dealing representative of Epoch, to also be a registered dealing representative of both TDAM and TDWPIC (the Exemption Sought).
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 each jurisdiction of Canada outside of Ontario (together with Ontario, the Jurisdictions).
Terms defined in National Instrument 14-101 Definitions and MI 11-102 have the same meaning if used in this decision, unless otherwise defined.
This decision is based on the following facts represented by the Filers:
1. Epoch is incorporated in Delaware, United States under the Delaware General Corporation Law. The head office of Epoch is located in New York, United States. Epoch is registered as:
a. an adviser in the category of portfolio manager in Alberta, British Columbia, Manitoba, New Brunswick, Newfoundland and Labrador, Nova Scotia, Ontario, Quebec and Saskatchewan; and
b. a dealer in the category of exempt market dealer in Manitoba and Ontario.
2. Epoch is primarily engaged in the business of investment management.
3. TDAM is incorporated under the Business Corporations Act (Ontario) and its head office is located in Toronto, Ontario. TDAM is registered as:
a. an adviser in the category of portfolio manager in each jurisdiction of Canada;
b. a dealer in the category of exempt market dealer in each jurisdiction of Canada;
c. an investment fund manager in Newfoundland and Labrador, Ontario and Quebec; and
d. an adviser in the category of commodity trading manager in Ontario.
4. TDAM is primarily engaged in the management of various investment funds and provides portfolio management services.
5. TDWPIC is a wholly-owned subsidiary of TDAM and is a corporation incorporated under the Canada Business Corporations Act. TDWPIC's head office is located in Toronto, Ontario. TDWPIC is registered in each jurisdiction of Canada as a dealer in the category of exempt market dealer and as an adviser in the category of portfolio manager.
6. TDWPIC is primarily engaged in the business of portfolio management activities.
7. Epoch, TDAM and TDWPIC are specified affiliates. Epoch is a wholly-owned subsidiary of Epoch Holding Corporation which is an indirect wholly-owned subsidiary of The Toronto-Dominion Bank (TD Bank), a bank listed in Schedule I to the Bank Act (Canada); TDAM is a wholly-owned subsidiary of TD Bank, and TDWPIC is a wholly-owned subsidiary of TDAM.
8. The Filers are not in default of any requirement of securities or derivatives legislation in any of the Jurisdictions.
9. In March 2013, TD Bank indirectly acquired Epoch. Accordingly, the Exemption Sought will allow TD Bank to integrate the product lines of its recently acquired affiliate (Epoch) with two of its current registrants (TDAM and TDWPIC).
10. Miller is currently registered with Epoch as an advising representative in all jurisdictions where Epoch is registered as a portfolio manager. He is also registered as a dealing representative in Ontario under Epoch's exempt market dealer registration. If the Exemption Sought is granted, in addition to being registered as an advising representative and dealing representative of Epoch, Miller would be registered as a dealing representative of TDAM and TDWPIC under their respective registrations as exempt market dealers (the Multiple Registration).
11. Miller's role with TDAM and TDWPIC would be as the resident Epoch product specialist marketing the Epoch product line to these affiliates. Miller will devote the majority of his time to these activities. The Multiple Registration will allow Miller to support the TDAM and TDWPIC registered representatives by attending client or prospective client meetings with those registered representatives (in order to provide information to these clients on the Epoch line of products). Miller will have no TDAM or TDWPIC clients and he will not make investment recommendations to such clients in respect of investing in Epoch products. Miller intends to devote his time between Epoch, TDAM and TDWPIC, with his activities continuing to be completely directed to the Epoch product line.
12. There are valid business reasons for Miller to be registered with each of the Filers, namely:
a) to provide support to TDAM and TDWPIC representatives through Miller's expertise in the Epoch product line; and
b) to attend client meetings to provide information to TDAM and TDWPIC clients about Epoch's products, including investment strategies and philosophy.
13. The Filers' Chief Compliance Officers will ensure Miller has sufficient time and resources to adequately serve each Filer and their clients.
14. The Filers are each wholly-owned direct or indirect subsidiaries of TD Bank and, accordingly, the Multiple Registration will not give rise to the conflicts of interest present in a similar arrangement involving unrelated, arm's length firms. The interests of the Filers are aligned, and as Miller's role at TDAM and TDWPIC would be to support the business activities and interests of each of the Filers, the potential for conflicts of interest arising from the Multiple Registration is remote.
15. The Filers have policies and procedures in place that address any conflicts of interest that may arise as a result of the Multiple Registration and the Filers believe they will be able to appropriately deal with these conflicts.
16. The Filers will be able to deal with conflicts of interest, including supervising how Miller will deal with these conflicts of interest. Miller will be supervised by each of the Filers and is subject to all policies and procedures addressing conflicts of interest that may arise as a result of the Multiple Registration.
17. Miller shall act in the best interest of all clients of the Filers and will deal fairly, honestly and in good faith with those clients.
18. In order to minimize any client confusion, Miller will disclose his Multiple Registration to TDAM or TDWPIC clients when he attends a meeting with these clients.
19. In the absence of the Exemption Sought, the Filers would be prohibited under paragraph 4.1(1)(b) of NI 31-103 from permitting Miller to act as a representative of TDAM and TDWPIC while he also registered as an advising and dealing representative of Epoch, even though the Filers are affiliates.
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 circumstances described above in paragraphs 13, 15, 16, 17 and 18 remain in place.