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 33109 in connection with a bulk transfer of business locations and registered individuals pursuant to an asset purchase in accordance with section 3.4 of Companion Policy 33-109CP Registration Information.
Applicable Legislative Provisions
Multilateral Instrument 11-102 Passport System, s. 4.7(1).
National Instrument 33-109 Registration Information, ss. 2.2, 2.3, 3.2, 4.2.
Companion Policy 33-109CP Registration Information, s. 3.4.
National Policy 11-203 Process for Exemptive Relief Applications in Multiple Jurisdictions.
November 28, 2014
IN THE MATTER OF
THE SECURITIES LEGISLATION OF
QUEBEC AND ONTARIO
IN THE MATTER OF
THE PROCESS FOR EXEMPTIVE RELIEF APPLICATIONS IN MULTIPLE JURISDICTIONS
IN THE MATTER OF
INVESTIA FINANCIAL SERVICES INC.
TEN STAR FINANCIAL INC.
(“TSF”) (the “Filers”)
The securities regulatory authority or regulator in each of the Jurisdictions (the “Decision Maker”) has received an application from the Filers for a decision under the securities legislation of each of Ontario and Quebec (the “Legislation”) providing exemptions from the requirements contained in sections 2.2, 2.3, 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 (“TSF Individuals “) and all business locations (“Locations”) of TSF (branches and sub-branches) from TSF to INVESTIA, on the Transaction Date (defined below), in accordance with section 3.4 of the Companion Policy to NI 33-109 (the “Exemption Sought”). The application received from the Filers is in connection with the proposed acquisition by INVESTIA of all dealer rights and interest in TSF mutual fund and segregated fund business whereby TSF client accounts will be transferred to INVESTIA (the “Transaction”).
Under the Process for Exemptive Relief Applications in Multiple Jurisdictions (for a dual application):
(a) L’Autorité des marchés financiers is the principal regulator for the application,
(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 British Columbia, Alberta, Saskatchewan and Manitoba , and
(c) the decision is the decision of the principal regulator and evidences the decision of the securities regulatory authority or regulator in Ontario.
Terms defined in MI 11-102 and National Instrument 14-101 Definitions have the same meaning if used in this decision, unless otherwise defined.
This decision is based on the following facts represented by the Filers:
Investia Financial Services Inc.
1. INVESTIA is a company constituted by amalgamation under the Canadian Business Corporations Act (“CBCA”) on September 1, 2009. It is a wholly-owned subsidiary of Industrial Alliance Insurance and Financial Services Inc.
2. INVESTIA is registered in Québec as a firm in the following categories: exempt market dealer, mutual fund dealer, restricted dealer and scholarship plan dealer. In the other provinces and territories of Canada, INVESTIA is registered as a dealer in the categories of exempt market dealer and mutual fund dealer. In addition, INVESTIA is a member of the Mutual Fund Dealers Association of Canada (“MFDA”).
3. INVESTIA’s registered head-office is located at 6700 Boulevard Pierre-Bertrand, Suite 300, Quebec, Province of Quebec, G2J 0B4.
4. INVESTIA is in compliance with all of the MFDA’s requirements and is not in default of any requirements of securities legislation in any of the jurisdictions in which it is registered.
Ten Star Financial Inc.
5. TSF is a corporation constituted under the CBCA. It is a wholly-owned subsidiary of Ten Star Holdings Inc. Ten Star Holdings Inc. is owned by two individuals, David Baird and his spouse, Joyce Baird.
6. TSF is registered as a dealer in the category of mutual fund dealer in the provinces of British Columbia, Alberta, Saskatchewan, Manitoba, Ontario and Quebec and as a dealer in the category of exempt market dealer in Ontario. TSF is also a member of the MFDA.
7. TSF’s registered head office is located at 95 Hamilton Street North, Suite 8, Waterdown, Ontario, L0R 2H0.
8. TSF is in compliance with all of the MFDA’s requirements and is not in default of any requirements of securities legislation in any of the jurisdictions in which it is registered.
The Proposed Transaction
9. INVESTIA intends to acquire all dealer rights and interest in TSF’s mutual fund and segregated fund business on or about December 1, 2014 (the “Transaction Date”).
10. TSF’s client accounts will be transferred to INVESTIA on the Transaction Date by way of a negative confirmation, as per MFDA Staff Notice MSN-0017.
11. On 26 September, 2014, the MFDA issued a letter approving the Transaction.
Submissions in support of exemptions
12. Subject to obtaining the Exemption Sought, no disruption in the services provided by the TSF Individuals to TSF’s clients to be transferred to INVESTIA as part of the Transaction is anticipated as a result of the Transaction.
13. The Exemption Sought will not have any negative consequences on INVESTIA’s ability to comply with any applicable regulatory requirements or to satisfy any obligations in respect of its clients and TSF’s clients to be transferred to INVESTIA as part of the Transaction.
14. Given the number of TSF Individuals and Locations to be transferred from TSF to INVESTIA on the Transaction Date, it would be unduly time consuming and difficult to transfer each of the TSF Individuals and Locations through the National Registration Database (“NRD”) in accordance with the requirements of National Instrument 33-109 Registration Information (“NI 33-109”) if the Exemption Sought is not granted.
15. TSF is registered as a mutual fund dealer in six provinces, i.e. British Columbia, Alberta, Saskatchewan, Manitoba, Ontario and Quebec, and as an exempt market dealer in Ontario. Investia is also registered as a mutual fund dealer in those six provinces and as an exempt market dealer in Ontario. This provides the opportunity to seamlessly transfer the TSF Individuals and Locations on the Transaction Date by way of the Bulk Transfer.
16. At the time of the Bulk Transfer, the TSF Individuals will be all of the registered individuals of TSF save and except for two registered individuals of TSF which will not be part of the Bulk Transfer. The Locations will be the only branches and sub-branches of TSF. Accordingly, the transfer of the TSF Individuals and Locations on the Transaction Date by means of Bulk Transfer can be implemented without any significant disruption to the activities of the TSF Individuals, the Locations, TSF and INVESTIA.
17. Allowing the Bulk Transfer of the TSF Individuals to occur on the Transaction Date will benefit (and have no detrimental impact on) TSF’s clients to be transferred to INVESTIA as part of the Transaction by ensuring that there is no interruption in registration of the TSF Individuals.
18. The Exemption Sought complies with the requirements of and the reasons for a bulk transfer as set out in Section 3.4 of the Companion Policy to NI 33-109 and Appendix C thereto.
19. It would not be prejudicial to the public interest to grant the Exemption Sought.
Each of the Decision Makers is satisfied that the decision meets the tests set out in the Legislation for the Decision Maker to make the decision.
The decision of the Decision Makers under the Legislation is that the Exemption Sought is granted provided that the Filers make acceptable arrangements with CGI Information Systems and Management Consultants Inc. in respect of the Bulk Transfer and the Filers make these arrangements in advance of the Bulk Transfer.
Superintendent, Client Services and Distribution Oversight