Securities Law & Instruments

Headnote

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) and Derivatives Regulation (Québec) -- 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 and Companion Policy 33-109CP.

National Policy 11-203 Process for Exemptive Relief Applications in Multiple Jurisdictions.

Derivatives Act (Québec) and Derivatives Regulation (Québec).

April 22, 2016

IN THE MATTER OF THE SECURITIES LEGISLATION 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 INDUSTRIAL ALLIANCE SECURITIES INC. (IAS) AND BURGEONVEST BICK SECURITIES LIMITED (BBSL) (the Filers)

DECISION

Background

The securities regulatory authority or regulator in each of the Jurisdictions (the Decision Makers) has received an application from the Filers, on behalf of BBSL and the continuing corporation (the Amalgamated Corporation) resulting from the proposed amalgamation (the Amalgamation) of IAS and BBSL, 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, 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 (the BBSL Individuals) and all business locations (branches and sub-branches) (the Locations) of BBSL to the Amalgamated Corporation, on the Amalgamation Date (as defined below), in accordance with section 3.4 of the Companion Policy to NI 33-109 (the Exemption Sought).

The principal regulator in Quebec has also received an application from the Filers for a decision under the derivatives legislation of Quebec for relief from section 11.1 of the Derivatives Regulation (Quebec) pursuant to section 86 of the Derivatives Act (Quebec) to allow the Bulk Transfer of BBSL Individuals registered under Quebec derivatives legislation and all of the Locations to the Amalgamated Corporation, on the Amalgamation Date, in accordance with section 3.4 of Companion Policy to NI 33-109 (the Derivatives Exemption Sought).

Under the Process for Exemptive Relief Applications in Multiple Jurisdictions (for a hybrid application):

(a) the Autorité des marchés financiers (the AMF) is the principal regulator for this application,

(b) for the decision of the principal regulator in respect of the Exemption Sought, 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 in British Columbia, Alberta, Saskatchewan, Manitoba, New Brunswick and Nova Scotia,

(c) the decision with respect to the Exemption Sought is the decision of the principal regulator and evidences the decision of the securities regulatory authority or regulator in Ontario, and

(d) the decision with respect of the Derivatives Exemption Sought is the decision of the principal regulator.

Interpretation

Terms defined in National Instrument 14-101 Definitions and MI 11-102 have the same meaning if used in this decision, unless otherwise defined.

Representations

This decision is based on the following facts represented by the Filers:

IAS

1. IAS is a corporation existing under the Canada Business Corporations Act (CBCA). Its head office is located at 2200 McGill College Avenue, Suite 350, Montreal, Quebec.

2. IAS is registered as an investment dealer under the securities legislation of each of the Canadian provinces. IAS is also registered as a derivatives dealer in Quebec. IAS is a dealer member of the Investment Industry Regulatory Organization of Canada (IIROC).

3. IAS has two wholly-owned subsidiaries: IA Securities (USA) Inc. (IA USA) and MGI Insurance Agency Inc. (MGI INS). IA USA is a registered broker dealer with the Financial Industry Regulatory Authority (USA) dealing with institutional clients in the United States. MGI INS is an insurance broker firm.

4. Industrial Alliance Insurance and Financial Services Inc. (iA Financial Group) holds all of the common shares of IAS. iA Financial Group also holds all of the Class "A" and Class "C" Preferred shares of IAS. 8689784 Canada Inc. (8689784) holds all of the Class "B" Preferred shares of IAS and iA Financial Group holds all of the issued and outstanding shares of 8689784. FIN-XO Securities Inc. (FIN-XO) holds all of the Class "D" Preferred shares of IAS and IAS holds all of the issued and outstanding shares of FIN-XO.

5. IAS is not in default of any requirements of securities legislation in any of the Jurisdictions.

BBSL

6. BBSL is a corporation incorporated under the Ontario Business Corporations Act. Its head office is located at 21 King Street, Suite 1100, Hamilton, ON.

7. BBSL is registered as an investment dealer in the provinces of British Columbia, Alberta, Saskatchewan, Manitoba, New Brunswick and Nova Scotia. BBSL is also registered as a derivatives dealer in Quebec. BBSL is a dealer member of IIROC.

8. BBSL has no subsidiaries.

9. Burgeonvest Bick Corporation (BBC) holds all of the issued and outstanding shares of BBSL and iA Financial Group holds all of the issued and outstanding shares of BBC. On the Amalgamation Date, iA Financial Group will hold all of the issued and outstanding shares of BBSL.

10. BBSL is not in default of any requirements of securities legislation in any of the Jurisdictions.

The Proposed Amalgamation

11. On or about May 1, 2016 (the Amalgamation Date), IAS and BBSL will amalgamate.

12. The Amalgamation will be effected through the CBCA regular process. As such, after the Amalgamation, IAS and BBSL will continue as one legal entity. The name of the Amalgamated Corporation will be "Industrial Alliance Securities Inc." (with the French version being "Industrielle Alliance Valeurs mobilières inc.")

13. The shareholders of the Amalgamated Corporation will be iA Financial Group, 8689784 and FIN-XO.

14. The head office location of the Amalgamated Corporation will be the same as the current head office location of IAS. The National Registration Database (NRD) number for the Amalgamated Corporation will be the same as the current NRD number of IAS.

15. The shareholders, directors and officers of the Amalgamated Corporation will be the same as those of IAS, including the chief compliance officers which will remain IAS' current chief compliance officers. Therefore, BBSL's chief compliance officer and ultimate designated person will no longer act in such capacity as IAS already has its own chief compliance officers and ultimate designated person

16. On November 27, 2015, IIROC issued a non-objection letter in connection with the Amalgamation.

17. A proposed letter to be sent to all of BBSL's clients was approved by IIROC. The client letter informs them of the Amalgamation, the name of the Amalgamated Corporation, the change in trustee for some of the registered products, and other related matters. Finally the letter advises the clients that they have the right, before the Amalgamation Date, to request that their accounts be transferred elsewhere. In such a case the client will not be charged any fees for the transfer. The letter was sent to BBSL's clients on or about February 1st, 2016.

Submissions in support of exemptions

18. Starting from the Amalgamation date, all activities currently conducted by the Filers will be under the responsibility of IAS. IAS will conduct the same operations, essentially in the same manner as before the Amalgamation.

19. Subject to obtaining the Exemption Sought and the Derivatives Exemption Sought, no disruption in the services provided by the BBSL Individuals to clients of the Filers is anticipated as a result of the Amalgamation.

20. Neither the Exemption Sought nor the Derivatives Exemption Sought will have any negative consequences on the ability of BBSL, IAS or the Amalgamated Corporation to comply with any applicable regulatory requirements or their ability to satisfy any of their obligations in respect of their clients.

21. Given the number of BBSL Individuals and Locations to be transferred from BBSL to the Amalgamated Corporation on the Amalgamation Date, it would be unduly time consuming and difficult to transfer each of the BBSL Individuals and Locations through NRD in accordance with the requirements of NI 33-109 if the Exemption Sought and the Derivatives Exemption Sought are not granted.

22. Both Filers are registered in the same categories of registration in each of the Jurisdictions, thereby affording the opportunity to seamlessly transfer the BBSL Individuals and Locations to the Amalgamated Corporation on the Amalgamation Date by way of Bulk Transfer.

23. At the time of the Bulk Transfer, all of the BBSL Individuals will be the only registered individuals of BBSL and the Locations will be the only branches and sub-branches of BBSL. Accordingly, the transfer of the BBSL Individuals and Locations on the Amalgamation Date by means of the Bulk Transfer can be implemented without any significant disruption to the activities of the BBSL Individuals, the Locations, BBSL, IAS or the Amalgamated Corporation.

24. Allowing the Bulk Transfer of the BBSL Individuals to occur on the Amalgamation Date will benefit (and have no detrimental impact on) the clients of the Filers by facilitating seamless service on the part of the BBSL Individuals, the Filers and the Amalgamated Corporation.

25. The Exemption Sought and the Derivatives Exemption Sought comply 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.

26. It would not be prejudicial to the public interest to grant the Exemption Sought and the Derivatives Exemption Sought.

Decision

Each of the Decision Makers is satisfied that the decision meets the tests set out in the Legislation and the Derivatives Act (Quebec) 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 make such arrangements in advance of the Bulk Transfer.

The decision of the principal regulator under the Derivatives Act (Quebec) is that the Derivatives 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 make such arrangements in advance of the Bulk Transfer.

"Eric Stevenson"
Superintendent, Client Services and Distribution Oversight
Autorité des marchés financiers