Exemption Orders (Discretionary)
CIBC INVESTOR SERVICES INC.
2001 BCSECCOM 736
Headnote
Mutual Reliance Review System for Exemptive Relief Applications – Relief for registrants from the suitability requirements of the Securities Rules and of the Investment Dealers Association of Canada, subject to the terms and conditions set out in the Decision Document. Variation of former decision in order to extend the time period for Client Acknowledgements.
Applicable British Columbia Provisions
Securities Act, R.S.B.C. 1996, c. 418, ss. 48 and 171
Securities Rules, B.C. Reg 194/97, s. 48(1)(b)
IN THE MATTER OF THE SECURITIES LEGISLATION OF BRITISH COLUMBIA, ALBERTA, SASKATCHEWAN, NOVA SCOTIA, NEWFOUNDLAND AND ONTARIO
AND
IN THE MATTER OF THE MUTUAL RELIANCE REVIEW SYSTEM FOR EXEMPTIVE RELIEF APPLICATIONS
AND
IN THE MATTER OF CIBC INVESTOR SERVICES INC.
MRRS DECISION DOCUMENT
WHEREAS the local securities regulatory authority or regulator (the “Decision Maker”) in each of the provinces of British Columbia, Alberta, Saskatchewan, Newfoundland, Nova Scotia and Ontario (collectively, the “Jurisdictions”) has received an application from CIBC Investor Services Inc. (the “Filer”) to vary the MRRS Decision Document dated December 20, 2000 IN THE MATTER OF CIBC INVESTOR SERVICES INC. which provided, subject to terms and conditions, relief for Investor’s Edge (the “Division”), a division of the Filer, from suitability obligations under the securities legislation of the Jurisdictions, decided, subject to terms and conditions and other than under the securities legislation of Newfoundland and Nova Scotia, that suitability requirements of the Investment Dealers Association of Canada do not apply to the Division and permitted, subject to terms and conditions, the Registered Electronic Representatives of the Filer to process certain trades for clients of the Division (the “Suitability Relief Order”);
AND WHEREAS the terms “Suitability Requirements”, “IDA Suitability Requirements”, “Registered Representatives”, “Registered Electronic Representatives” and “Client Acknowledgement” shall each have the respective meaning ascribed thereto under the Suitability Relief Order;
AND WHEREAS the Filer wishes to vary the Suitability Relief Order to extend the specified time within which the Division must continue to comply with Suitability Requirements and IDA Suitability Requirements for existing client accounts for which no Client Acknowledgement is received from June 30, 2001 to December 31, 2001, to extend the specified time after which restrictions are placed on existing clients accounts for which no Client Acknowledgement is received from June 30, 2001 to December 31, 2001, and to extend the specified time by which the Division will be required to maintain its own Registered Electronic Representatives;
AND WHEREAS under the Mutual Reliance Review System for Exemptive Relief Applications (the “System”), the Ontario Securities Commission is the principal regulator for this application;
AND WHEREAS the Filer has represented to the Decision Makers that:
1. the Filer is a corporation incorporated under the Canada Business Corporations Act and is registered under the Legislation as an investment dealer and broker (or the equivalent) and is a member of the IDA;
2. The Filer seeks to vary the Suitability Relief Order in order to have additional time to obtain Client Acknowledgements and have additional time to maintain a separate pool of Registered Electronic Representatives for the Division.
3. until December 31, 2001, Registered Electronic Representatives of the Filer may process trades that are placed through the IVR system or through the Internet for clients of the Division or clients of Imperial Investor Service but the Registered Electronic Representatives do not and will not have any direct contact with clients of Imperial Investor Service and will refer any issues associated with the processing of an order for a client of Imperial Investor Service to an appropriately registered representative of the Filer that is not a Registered Representative;
4. commencing December 31, 2001, the Division will maintain its own Registered Electronic Representatives and such representatives will only process trades that are placed by clients of the Division, and the Filer has policies and procedures to ensure the foregoing;
5. the Division and its Registered Representatives will continue to comply with the Suitability Requirements and IDA Suitability Requirements for client accounts for which no Client Acknowledgement is received until December 31, 2001;
6. after December 31, 2001, the Division will not permit a transaction in an account for which a Client Acknowledgement has not been received unless the transaction is a sale for cash or a transfer of assets to another account;
7. except as noted above, the Filer confirms the representations to the Decision Makers in the Suitability Relief Order; and
8. subject to this variation order being granted, the Division will inform all clients who have not yet provided a Client Acknowledgement that the specified time within which the Division must continue to comply with Suitability Requirements and IDA Suitability Requirements has been extended to December 31, 2001 and the specified time after which restrictions are placed on existing client accounts for which no Client Acknowledgement is received has been extended to December 31, 2001;
AND WHEREAS under the System, this MRRS Decision Document evidences the decision of each Decision Maker (collectively, the “Decision”);
AND WHEREAS each of the Decision Makers is satisfied that the test contained in the Legislation that provides the Decision Maker with the jurisdiction to make the Decision has been met;
THE DECISION of the Decision Makers under the Legislation is that the Suitability Relief Order is amended by replacing term and conditions 4, 5, 8, 9 and 14(e) and (f) of the Suitability Relief Order in respect of the Suitability Requirements with the following:
4. until December 31, 2001, Registered Electronic Representatives of the Filer may process trades that are placed through the IVR system or through the Internet for clients of the Division or clients of Imperial Investor Service provided that the Registered Electronic Representatives do not have any direct contact with clients of Imperial Investor Service and will refer any issues associated with the processing of an order for a client of Imperial Investor Service to an appropriately registered representative of the Filer that is not a Registered Representative;
5. commencing December 31, 2001, the Division will maintain its own Registered Electronic Representatives and such representatives will only process trades that are placed by clients of the Division;
8. the Division and its Registered Representatives continue to comply, until December 31, 2001, with their Suitability Requirements and IDA Suitability Requirements for client accounts for which no Client Acknowledgement is received;
9. commencing December 31, 2001, the Division will not permit transactions in an account for which a Client Acknowledgement has not been received unless the transaction is a sale for cash or a transfer of assets to another account; and
14. the Filer has in force policies and procedures to ensure that:
(e) commencing December 31, 2001, the Division will maintain its own Registered Electronic Representatives and such representatives shall only process trades that are placed by clients of the Division, and
(f) notice is provided on or before December 31, 2001 to each of the Decision Makers that the Division maintains its own Registered Electronic Representatives and such representatives only process trades that are placed by clients of the Division.
June 29, 2001
William R. Gazzard
THE DECISION of the Decision Makers, other than Nova Scotia and Newfoundland, is that the Suitability Relief Order is amended by replacing term and condition 4, 5, 8, 9 and 14(e) and (f) of the Suitability Relief Order in respect of IDA Suitability Requirements with the following:
4. until December 31, 2001, Registered Electronic Representatives of the Filer may process trades that are placed through the IVR system or through the Internet for clients of the Division or clients of Imperial Investor Service provided that the Registered Electronic Representatives do not have any direct contact with clients of Imperial Investor Service and will refer any issues associated with the processing of an order for a client of Imperial Investor Service to an appropriately registered representative of the Filer that is not a Registered Representative;
5. commencing December 31, 2001, the Division will maintain its own Registered Electronic Representatives and such representatives will only process trades that are placed by clients of the Division;
8. the Division and its Registered Representatives continue to comply, until December 31, 2001, with their Suitability Requirements and IDA Suitability Requirements for client accounts for which no Client Acknowledgement is received;
9. commencing December 31, 2001, the Division will not permit transactions in an account for which a Client Acknowledgement has not been received unless the transaction is a sale for cash or a transfer of assets to another account; and
14. the Filer has in force policies and procedures to ensure that:
(e) commencing December 31, 2001, the Division will maintain its own Registered Electronic Representatives and such representatives shall only process trades that are placed by clients of the Division, and
(f) notice is provided on or before December 31, 2001 to each of the Decision Makers that the Division maintains its own Registered Electronic Representatives and such representatives only process trades that are placed by clients of the Division.
June 29, 2001
Paul M. Moore J. A. Geller