1.		Watt consents to an order ("Order") of the Superintendent under section 145.1 of the Securities Act, S.B.C. 1985, c. 83, as amended ("Act") that he is prohibited from becoming or acting as a director or officer of any reporting issuer for a period of one year commencing on the date of the Order;
2.		As the basis for the Order, Watt acknowledges that the admissions of facts are correct as set forth in the Settlement Agreement dated July 28, 1988 between Watt and the staff of the Ontario Securities Commission, a copy of which is attached as Exhibit "A" to this Agreed Statement of Facts and Undertaking;
3.		Watt waives his right to a hearing and review by the British Columbia Securities Commission under section 149 of the Act with respect to the Order;
4.		Watt agrees to pay to Her Majesty the Queen in Right of the Province of British Columbia represented by the Minister of Finance the sum of $250 for costs of investigation of this matter.

1.		The Staff ("Staff") of the Ontario Securities Commission (the "Commission") agrees to recommend and Robert Alfred Watt ("Watt") consents to the within Settlement of the proceedings initiated by Notice of Hearing dated March 30, 1988, in accordance with the tires and conditions set out hereinafter.
2.		Subject to approval of the Commission, Staff and Watt agree to an order, pursuant to s. 26 of the Securities Act, R.S.O. 1980, chapter 466, as amended (the "Act"), cancelling Watt's registration as an officer and a salesman employed by a securities dealer.

Watt admits the following facts:

3.		From October 28, 1981, to July 31, 1983, Watt was employed by Qualico Securities Limited ("Qualico") as its trading officer in its Toronto office. One of Watt's duties as trading officer vas to ensure that Qualico's Toronto office complied with the Act, and the Regulation enacted thereunder.
4.		While employed as Qualico's trading officer, Watt used unregistered agents of Qualico to sell securities being distributed by Qualico in violation of section 24 of the Act and failed to comply with the know-your-client rules with respect to the clients of those unregistered agents in violation of s. 102 of the Regulation. Particulars are as follows:

(a)		In December, 1981, Watt used Angus Taylor to sell securities issued by Deer Ridge Village Limited Partnership ("Deer Ridge") to 43 members of the public. Angus Taylor was not registered pursuant to section 24 of the Act to trade in securities. Watt did not meet with the investors and failed to comply with the know-your-client rules. Watt did not even make enquiries to ascertain the number of investors or the identity of the investors. Watt received from Angus Taylor one subscription of a limited partnership of which the 43 investors were limited partners. Watt also received from Angus Taylor a bill for a sales commission, described as a "Finders Fees, in the amount of $12,900.00, calculated as 5% of the equity invested in the first 10 Deer Ridge units and 6% of the equity invested in the other 6 Deer Ridge units purchased on behalf of clients of Angus Taylor. Watt referred this bill to Qualico's head office who paid the sales commission.
(b)		Watt used Wally Gross to sell securities issued by Waters Edge Tower Limited Partnership ("Waters Edge") to 2 members of the public. Wally Gross was not registered pursuant to section 24 of the Act to trade in securities. Watt was named on the investors' subscription documents as the salesman even though Watt had never met the investors and had failed to comply with the know-your-client rules in violation of section 102 of the Regulation. Watt approved the payment by Qualico of a sales commission of $600.00 in connection with these sales. The sales commission cheque was made payable to Erin Realty Inc., a company owned by Wally Gross, which was not registered pursuant to section 24 of the Act.
(c)		Watt used Gerald Arthur Chalut ("Chalut") to sell securities issued by Deer Valley Shopping Centre Limited Partnership ("Deer Valley") to 5 members of the public when Chalut was not registered pursuant to section 24 of the Act. In respect of all of these sales, Watt submitted to Qualico subscription documents which named Chalut as the salesman. Qualico returned these documents to Watt with instructions that Watt amend the forms to show himself as salesman. Watt did so and attended at Chalut's office for the purpose of having the investors re-sign the subscription documents. At that time, Watt met 4 of the Investors but did not fully comply with the know-your-client rules because Watt assumed that Chalut had "qualified the clients". Watt's reliance on Chalut did not comply with the know-your-client rules. Watt did not meet the 5th investor who signed the subscription documents for the second time in the presence of Chalut's secretary. Accordingly, Watt failed to comply with the know-your-client rules with respect to this investor. Watt approved the payment by Qualico to Chalut of a sales commission in the amount of $3,750.00 in respect of these sales.
(d)		shortly before Watt resigned from Qualico, Watt was approached by Boyd Chisholm, a mutual fund salesman employed by a mutual fund dealer, who asked Watt whether Boyd Chisholm could be paid for selling securities on behalf of Qualico. Watt advised Boyd Chisholm that Qualico could pay Boyd Chisholm a "referral fee". Section 24 of the Act did not permit Boyd Chisholm to sell securities on behalf of Qualico or to receive payment therefor.
(e)		Watt permitted the sale of securities issued by Waters Edge to 1 member of the public by Diane Lalonde who was not registered pursuant to s. 24 of the Act to trade in securities. Watt approved the payment by Qualico to Diane Lalonde of a sales commission of $600.00 in connection with this sale.

5.

In total, Watt used 4 unregistered agents to sell securities to 51 residents of Ontario. As Qualico's first trading officer in Ontario, Watt failed to establish the procedures described in section 102 of the Regulation but instead adopted procedures which violated the requirements of that section. These procedures involved the use of unregistered agents to sell securities in violation of section 24 of the Act and the failure by Qualico's registered sales staff to comply with the know-your-client rules with respect to clients who purchased securities through unregistered agents.

6.

Watt and Staff agree that, if this Settlement Agreement is adopted by the Commission, it will constitute the entirety of the evidence to be submitted respecting Watt in this matter and Watt agrees to waive his right to a full hearing and appeal of this matter.

R.A. WATT

   Dated at Toronto, this 28th day of July, 1988.

Staff of the Ontario Securities Commission
E. PASCUTTO
Executive Director
J. GROIA
Director, Enforcement Branch