Securities Law & Instruments

Headnote

Investment advice by a U.S. registered investment adviser exempted from the requirements of paragraph 25(3) of the Act, subject to certain conditions, for investment advice provided to persons or entities who are resident in the United States with respect to securities of U.S. issuers -- Supervisory memorandum of understanding between the Ontario Securities Commission and the Filer's principal regulator.

Applicable Legislative Provisions

Statutes Cited

Securities Act, R.S.O. 1990, c. S.5, as amended s. 25(3).

December 29, 2015

IN THE MATTER OF THE SECURITIES ACT, R.S.O. 1990, CHAPTER S.5, AS AMENDED (the Act) AND IN THE MATTER OF GLOBAL AUTOTRADING INC. (the Filer) AND JIMMY TALBOT

VARIATION ORDER (Subsection 144(1) of the Act)

WHEREAS the Ontario Securities Commission (Commission) issued an order (Previous Relief) dated December 20, 2013 pursuant to subsection 74(1) of the Act for an exemption from the adviser registration requirement in subsection 25(3) of the Act;

AND WHEREAS the Commission issued an order (Subsequent Relief) dated December 16, 2014 pursuant to section 144 of the Act to vary the Previous Relief by extending the termination date of the Previous Relief from December 20, 2014 to December 31, 2015;

AND WHEREAS pursuant to Ontario Securities Commission Rule 32-505 Conditional Exemption from Registration for United States Broker-Dealers and Advisers Servicing U.S. Clients from Ontario, which came into effect on June 5, 2015, the Filer does not require the Previous Relief in respect of clients in the United States of America (US);

AND WHEREAS the Filer requires relief with respect to existing clients in the United Kingdom, Australia, Bermuda, Italy and Switzerland (Secondary Countries);

AND WHEREAS the Commission has received an application from the Filer pursuant to section 144 of the Act requesting that the Commission further vary the Previous Relief to: (a) extend the termination date of the Previous Relief from December 31, 2015 to December 31, 2016; and (b) amend the Previous Relief such that it does not grant unneeded relief with respect to the Filer's clients in the US but maintains the existing relief in respect of the Filer's clients in the Secondary Countries;

AND WHEREAS the Commission has been advised that the Filer has pending applications for registration under a category set out in the Act and for exemptive relief from certain requirements of Ontario securities law;

AND WHEREAS the Commission has determined that it is not prejudicial to the public interest to issue this order that further varies the Previous Relief to extend it in the manner contemplated above;

IT IS ORDERED, pursuant to section 144 of the Act, that the Previous Relief, as varied by the Subsequent Relief, be further varied by:

(1) replacing

"an exemption from the adviser registration requirement in section 25(3) of the Act for: (a) the Filer; and (b) Jimmy Talbot, who is engaging in, or holding himself out as engaging in the business of advising others when acting on behalf of the Filer (the Filer's Adviser), in respect of advice to persons or companies that are not resident in Canada (the Exemption Sought)."

with

"an exemption from the dealer and adviser registration requirements in sections 25(1) and 25(3) of the Act for: (a) the Filer; and (b) Jimmy Talbot, who is engaging in, or holding himself out as engaging in the business of advising others or trading in securities when acting on behalf of the Filer (the Filer's Representative), in respect of advice to or trades on behalf of persons or companies that are not resident in: (a) Canada; or (b) a jurisdiction where the Filer and the Filer's Representative are able to rely on an exemption from registration under Ontario securities law (the Exemption Sought).";

(2) deleting paragraph 16 of the Previous Relief and replacing it with:

"The Filer provides its services to residents in the United States of America (U.S.) as well as to a nominal number of clients in the United Kingdom, Australia, Bermuda, Italy and Switzerland (the Secondary Countries).";

(3) deleting paragraph 17 of the Previous Relief and replacing it with:

"The Filer does not currently have any clients who are resident in Canada. Furthermore, the Filer and the Filer's Representative will only provide their services, including activities that require registration under Ontario securities law, to clients who are not resident in Canada. The Filer will not accept new clients who are resident in any jurisdiction other than the U.S. until such time that the Filer and the Filer's Representative obtain the appropriate registrations, or are able to rely on an applicable exemption from registration.";

(4) deleting paragraph 18 of the Previous Relief and replacing it with:

"The Filer and the Filer's Representative will confirm the residency of all new clients who open an account with the Filer to ensure they are resident in the U.S. If the Filer and the Filer's Representative obtain the appropriate registrations, or are able to rely on an applicable exemption from registration, such that they are able to accept new clients who are resident in a jurisdiction other than the U.S., the Filer and the Filer's Representative will confirm the residency of each such client prior to the client opening an account with the Filer. The Filer will confirm the residency of each of its clients on an annual basis.";

(5) deleting paragraph 24 of the Previous Relief and replacing it with:

"Pursuant to Ontario Securities Commission Rule 32-505 Conditional Exemption from Registration for United States Broker-Dealers and Advisers Servicing U.S. Clients from Ontario (OSC Rule 32-505), which came into effect on June 5, 2015, the Filer and the Filer's Representative do not require relief in respect of clients in the U.S.";

(6) adding the following paragraph 25 immediately after paragraph 24 of the Previous Relief:

"There is no relief comparable to that in OSC Rule 32-505 available to the Filer and the Filer's Representative with respect to clients in the Secondary Countries.";

(7) adding the following condition as paragraph (a.1) immediately after paragraph (a) of the Previous Relief:

"the Filer and the Filer's Representative will not accept any new clients who are resident in any jurisdiction other than the U.S., until such time that the Filer and the Filer's Representative obtain the appropriate registrations, or are able to rely on an applicable exemption from registration;";

(8) deleting the condition in paragraph (c) of the Previous Relief and replacing it with:

"the Filer and the Filer's Representative currently meet, and will continue to meet, the requirements to be able to rely on OSC Rule 32-505 in respect of providing services to clients who are resident in the U.S.;";

(9) replacing "the Exemption Sought shall terminate on December 31, 2015" with "the Exemption Sought shall terminate on December 31, 2016"; and

(10) replacing "Filer's Adviser", wherever such term occurs in the Previous Relief, with "Filer's Representative".

"Mary Condon"
"Janet Leiper"
Commissioner
Commissioner
Ontario Securities Commission
Ontario Securities Commission