National Policy 11-203 Process for Exemptive Relief Applications in Multiple Jurisdictions – National Instrument 31-103 Registration Requirements, Exemptions and Ongoing Registrant Obligations (“NI 31-103”) – revocation of previous relief – revocation of relief from the requirement contained in section 11.3 of NI 31-103 to designate an individual to be the chief compliance officer (“CCO”).
May 26, 2017
IN THE MATTER OF
THE SECURITIES LEGISLATION OF
QUÉBEC AND ONTARIO
IN THE MATTER OF
THE PROCESS FOR EXEMPTIVE RELIEF APPLICATIONS
IN MULTIPLE JURISDICTIONS
IN THE MATTER OF
INDUSTRIAL ALLIANCE SECURITIES INC.
The securities regulatory authority or regulator in each of the Jurisdictions (the Decision Makers) has received an application from the Filer, for a decision under the securities legislation of the Jurisdictions (the Legislation) for the revocation of the decision dated March 28, 2014 In the Matter of Industrial Alliance Securities Inc. (the Previous Relief), which granted the Filer exemptive relief from the requirement contained in section 11.3 of National Instrument 31-103 Registration Requirements, Exemptions and Ongoing Registrant Obligations (NI 31-103) to designate an individual to be the chief compliance officer (CCO) and instead permitted the Filer to designate and register two individuals as CCO in respect of the two distinct operational divisions of the Filer (the Requested Revocation).
Under the Process for Exemptive Relief Applications in Multiple Jurisdictions (for a dual application):
(a) the Autorité des marchés financiers is the principal regulator for this application;
(b) the Filer has provided notice that section 4.7(1) of Multilateral Instrument 11-102 Passport System (MI 11-102) is intended to be relied upon in all of the provinces of Canada other than Québec and Ontario; 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 Filer:
1. The Filer is a corporation resulting from an amalgamation performed pursuant to the Canada Business Corporations Act.
2. The Filer’s head office is located in Montréal, Québec.
3. The Filer is registered as an investment dealer under the securities legislation of each of the Canadian provinces. The Filer is also registered as a derivatives dealer in Quebec.
4. The Filer is a dealer member of the Investment Industry Regulatory Organization of Canada.
5. The Filer is not in default of any requirements of securities legislation in any of the Jurisdictions.
6. In order to facilitate the integration upon the amalgamation between the Filer and MGI Securities Inc. which occurred on April 1, 2014, the Filer’s supervisory structure was organized according to the Filer’s two distinct operating lines of business (the Divisions):
(a) the Capital Markets Division that provides a broad spectrum of services to institutional clients, including equity, fixed income and options sales and trading; investment banking, and research; and
(b) the Retail Division that provides diversified wealth-management services to retail clients, including full-service retail accounts and suitability-based investments advice.
7. The Capital Markets Division oversees the trading desks of the Filer and the Retail Division oversees managed-account programmes, the registration department, complaints and investigations, retail sales and communications, and the training of branch managers.
8. Each of the Divisions used to have a separate and distinct compliance structure with specific compliance professionals.
9. Since then, changes were implemented to the structure and the organisation of the compliance department to bring together all of the securities compliance expertise in one and the same integrated team so that the team can support all of the securities compliance activities of both Divisions.
10. The Filer now has only one compliance team.
11. In order to complete its reorganisation, the Filer wants to have only one CCO to whom the compliance team will ultimately report to.
12. Accordingly, the Previous Relief, which is still in force today, will no longer be aligned with the Filer’s supervisory structure. The Filer requests that the Previous Relief be revoked to allow it to designate and register only one individual as CCO of its two Divisions.
The Decision Makers are satisfied that the decision meets the tests set out in the Legislation for the Decision Makers to make the decision.
The decision of the Decision Makers under the Legislation is that the Requested Revocation is granted by revoking the Previous Relief.
Client Services and Distribution Oversight