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 and Derivatives Regulation (Québec) 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 to NI 33-109.
Applicable Legislative Provisions
Multilateral Instrument 11-102 Passport System.
National Instrument 33-109 Registration Information, ss. 2.2, 2.3, 2.5, 3.2, 4.2.
National Policy 11-203 Process for Exemptive Relief Applications in Multiple Jurisdictions.
January 15, 2016
IN THE MATTER OF THE SECURITIES LEGISLATON OF QUEBEC AND ONTARIO (the Jurisdictions) AND IN THE MATTER OF THE PROCESS FOR EXEMPTIVE RELIEF APPLICATIONS IN MULTIPLE JURISDICTIONS AND IN THE MATTER OF 1784354 ONTARIO INC. (operating as EXCEL PRIVATE WEALTH) (EXCEL) AND CERTIKA INVESTMENTS LTD. (CERTIKA) (the Filers)
The securities regulatory authority or regulator in each of the Jurisdictions (the Decision Makers) has received an application from the Filers, on behalf of Excel and the continuing corporation (the Amalgamated Corporation) resulting from the proposed amalgamation (the Amalgamation) of Certika and Excel for a decision under the securities legislation of each of the Jurisdictions (the Legislation) providing exemptions 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 permitted individuals (the Certika Individuals) and all business locations (the Locations) of Certika (branches and sub-branches) from Certika to the Amalgamated Corporation, in accordance with section 3.4 of Companion Policy to NI 33-109 (the Exemption Sought).
Under the Process for Exemptive Relief Applications in Multiple Jurisdictions (for a dual application):
(a) The Autorité des marchés financiers (AMF) is the principal regulator for this application
(b) 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 Multilateral Instrument 11-102 Passport System (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:
1. Excel is a corporation continued under the laws of Ontario with its registered office in Toronto, Ontario and its principal place of business in Sherbrooke, Quebec. The AMF is the principal regulator of Excel.
2. Excel was incorporated under the laws of Quebec and pursuant to the Amalgamation, on September 17, 2015, Excel filed articles of continuance to continue the corporation under the laws of Ontario.
3. Excel is registered as a dealer in the category of mutual fund dealer in each Jurisdiction, and as a dealer in the categories of exempt market dealer and scholarship plan dealer in Quebec. Excel is a member of the Mutual Fund Dealers Association of Canada (MFDA).
4. Financial Horizons Inc. (Financial Horizons) owns all of the issued and outstanding securities of Excel.
5. Excel is not in default of any requirements of securities legislation in any of the jurisdictions of Canada.
6. Certika is a corporation existing under the laws of Ontario with its registered office and principal place of business in Perth, Ontario. The Ontario Securities Commission is the principal regulator of Certika.
7. Certika is registered as a dealer in the category of mutual fund dealer in each Jurisdiction. Certika is a member of the MFDA.
8. Financial Horizons owns all of the issued and outstanding securities of Certika.
9. Certika is not in default of any requirements of securities legislation in any jurisdiction of Canada.
The Proposed Amalgamation
10. Financial Horizons acquired all of the issued and outstanding securities of Certika on February 28, 2015 and all of the issued and outstanding securities of Excel on June 1, 2015. As anticipated at the time of the acquisitions, the Filers now wish to amalgamate.
11. After the Amalgamation, Excel and Certika will continue as one legal entity. The name of the Amalgamated Corporation will be "Excel Private Wealth Inc." (with the French version being "Excel Gestion Privée Inc.").
12. The sole shareholder of the Amalgamated Corporation will be Financial Horizons.
13. The registered office location of the Amalgamated Corporation will be the same as the current registered office of Financial Horizons. The National Registration Database (NRD) number for the Amalgamated Corporation will be the same as the current NRD number of Excel.
14. The Amalgamation is anticipated to occur on or about February 1, 2016 (the Amalgamation Date).
15. MFDA issued a letter approving the Amalgamation on October 20, 2015.
Submissions in support of the Exemption Sought
16. As of and from the Amalgamation Date, the Certika Individuals will carry on the same registerable activities at the Amalgamated Corporation as they conducted with Certika.
17. Effective on the Amalgamation Date, the Amalgamated Corporation will carry on the same business as the Filers and all of the registerable activities of the Filers will be carried out by the Amalgamated Corporation.
18. Subject to obtaining the Exemption Sought, no disruption in the services provided by the Filers to their clients is anticipated as a result of the Amalgamation.
19. Given the number of Certika Individuals and Locations to be transferred from Certika to the Amalgamated Corporation on the Amalgamation Date, it would be unduly time-consuming and difficult to transfer each of the Certika Individuals and Locations through NRD in accordance with the requirements of NI 33-109 if the Exemption Sought is not granted.
20. The Bulk Transfer will ensure that the transfer of the Certika Individuals and Locations occur effective as of the same date as the Amalgamation Date in order to ensure that there is no interruption in registration and service to clients.
21. 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.
22. 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 test 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.