Securities Law & Instruments


Headnote

Section 8.1 of OSC Rule 13-502 Fees (13-502) – one-time exemption granted from the requirement under section 4.1(1) to pay full specified regulated entity participation fees and section 4.8(1) to pay any applicable late fees related to its change of status under National Instrument 21-101 Marketplace Operation from an alternative trading system to a recognized exchange in Ontario.

IN THE MATTER OF
THE SECURITIES ACT,
R.S.O. 1990, c. S.5, AS AMENDED

AND

IN THE MATTER OF
NASDAQ CXC LIMITED

ORDER
(Section 8.1 of OSC Rule 13-502)

UPON the application (the Application) of Nasdaq CXC Limited (the Applicant) to the Director for an order pursuant to section 8.1 of OSC Rule 13-502 Fees (OSC Rule 13-502) for one-time exemptive relief from the requirement under section 4.1(1) of Rule 13-502 to permit the Applicant to pay an adjusted recognized exchange participation fee for 2018/2019 fiscal year to the Ontario Securities Commission (the Commission) and to waive the late fees under section 4.8 of Rule 13-502 (the Requested Relief);

AND UPON the Applicant filing the Application describing the Requested Relief on June 6, 2018;

AND UPON considering the Application and the recommendation of staff of the Commission;

AND UPON the Applicant having represented to the Director as follows:

1.             The Applicant is a corporation incorporated under the Canada Business Corporations Act and is a wholly-owned subsidiary of Ensoleillement Inc., which in turn is a wholly-owned subsidiary of Nasdaq, Inc.

2.             Until March 1, 2018, the Applicant was registered with the Commission and other applicable provincial securities regulators as an investment dealer and approved to operate as an alternative trading system (ATS).

3.             The Applicant ceased to be an ATS on February 28, 2018.

4.             The Applicant terminated its investment dealer registration with the Commission and other applicable provincial securities regulators on March 1, 2018 and resigned as a member of the Investment Industry Regulatory Organization of Canada (IIROC) on March 1, 2018.

5.             The Applicant was recognized as an exchange by the Commission on December 21, 2017, with the decision being effective on March 1, 2018.

6.             The Applicant paid an Ontario capital markets participation fee of $74,000 (Capital Markets Participation Fee) to the Commission on December 31, 2017 in order to continue its investment dealer registration in Ontario for 2018.

7.             The Applicant also paid an Ontario ATS participation fee of $17,000 (ATS Participation Fee) to the Commission on April 30, 2018.

8.             The Applicant requested, pursuant to Section 8.1 of Rule 13-502, one-time exemptive relief to pay an adjusted recognized exchange participation fee in Ontario for the 2018/2019 fiscal year.

9.             The Applicant also requested, pursuant to Section 8.1 of OSC Rule 13-502, a waiver from the application of late fees under Section 4.8 (1) of OSC Rule 13-502 in respect of recognized exchange participation fees due on or prior to April 30, 2018 but not yet paid.

10.          The Applicant represents that, as a result of ceasing to being an ATS, it no longer requires an investment dealer registration or IIROC membership.

11.          The Applicant submits that it would not be prejudicial to the public interest for the Commission to apply on a pro-rated basis the Capital Markets Participation Fee and the ATS Participation Fee, each previously paid to the Commission, towards the annual participation fee for a recognized exchange.

12.          Absent the Requested Relief, the Applicant would significantly overpay capital markets participation fees for no discernible reason, other than the fact that the fees for dealers are payable for the calendar year while the fees for marketplaces are payable for the Commission’s fiscal year.

AND UPON the Director being satisfied to do so would not be prejudicial to the public interest;

IT IS ORDERED by the Director, pursuant to 8.1 of OSC Rule 13-502, that the Applicant’s exchange participation fee payable under section 4.1(1) of the OSC Rule 13-502 be reduced to $62,500 for the 2018/2019 fiscal year and the Applicant be exempted from paying the late fees under section 4.8(1) of OSC Rule 13-502.

DATED this 16 day of July, 2018.

“Tracey Stern”
Manager, Market Regulation Branch
Ontario Securities Commission