Exemption Orders (Discretionary)
MERRILL LYNCH HSBC CANADA INC.
2001 BCSECCOM 822
Headnote
Mutual Reliance Review System for Exemptive Relief Applications - Variation of former decision in order to extend the time period with respect to Client Acknowledgements in connection with a previous decision that granted relief from the suitability requirements of the Securities Rules and the IDA regulations.
Applicable British Columbia Provisions
Securities Act, R.S.B.C. 1996, c. 418, ss. 27, 48 and 171
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 MERRILL LYNCH HSBC CANADA 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 Merrill Lynch HSBC Canada Inc. (the “Filer”), formerly known as HSBC InvestDirect (Canada) Inc., to vary the MRRS Decision Document dated November 10, 2000 IN THE MATTER OF HSBC INVESTDIRECT (CANADA) INC., which provided, subject to terms and conditions, relief from suitability obligations under the securities legislation of the Jurisdictions and 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 Filer (the “Suitability Relief Order”);
AND WHEREAS the terms “Suitability Requirements”, “IDA Suitability Requirements”, “Registered 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 Filer must continue to comply with Suitability Requirements and IDA Suitability Requirements for existing client accounts for which no Client Acknowledgement is received from eight months after the date of the Suitability Relief Order to December 31, 2001 and to extend the specified time after which restrictions are placed on existing clients accounts for which no Client Acknowledgement is received from eight months after the date of the Suitability Relief Order to December 31, 2001;
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 changed its name from HSBC InvestDirect (Canada) Inc. to Merrill Lynch HSBC Canada Inc. on November 30, 2000 and is a corporation incorporated under the Business Corporations Act (Ontario) and is registered under the Legislation as an investment dealer or 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;
3. the Filer 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;
4. after December 31, 2001, the Filer 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;
5. except as noted above, the Filer confirms the representations to the Decision Makers in the Suitability Relief Order; and
6. subject to this variation order being granted, the Filer will inform all clients who have not yet provided a Client Acknowledgement that the specified time within which the Filer 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 5 and 6 of the Suitability Relief Order in respect of the Suitability Requirements with the following:
5. the Filer 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; and
6. commencing December 31, 2001, the Filer 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.
July 6, 2001
William 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 conditions 5 and 6 of the Suitability Relief Order in respect of IDA Suitability Requirements with the following:
5. the Filer 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; and
6. commencing December 31, 2001, the Filer 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.
July 6, 2001
Paul M. Moore R. Stephen Paddon