BGC Financial LP et al. – s. 38 of the CFA and s. 6.1 of OSC Rule 91-502 Trades in Recognized Options

Ruling

Headnote

Application to the Commission pursuant to section 38 of the Commodity Futures Act (Ontario) (CFA) for a ruling that each Applicant be exempted from the dealer registration requirement in paragraph 22(1)(a) and the prohibition against trading on non-recognized exchanges in section 33 of the CFA. Each Applicant will offer the ability to trade in commodity futures contracts and commodity futures options that trade on exchanges located outside Canada and cleared through clearing corporations located outside of Canada to certain of its clients in Ontario who meet the definition of "permitted client" in National Instrument 31-103 Registration Requirements, Exemptions and Ongoing Registrant Obligations.

Application to the Director for an exemption, pursuant to section 6.1 of OSC Rule 91-502 Trades in Recognized Options (Rule 91-502), exempting each Applicant and its Representatives from the proficiency requirements in section 3.1 of Rule 91-502 for trades in commodity futures options on exchanges located outside Canada.

Applicable Legislative Provisions

Statutes Cited

Commodity Futures Act , R.S.O. 1990, c. C.20, as am., ss. 22, 33, 38.

Securities Act, R.S.O. 1990, c. S.5, as am.

Rule Cited

Ontario Securities Commission Rule 91-502 Trades in Recognized Options, ss. 3.1, 6.1.

Instrument Cited

National Instrument 31-103 Registration Requirements, Exemptions and Ongoing Registrant Obligations, s. 8.18.

January 8, 2018

IN THE MATTER OF

THE COMMODITY FUTURES ACT,

R.S.O. 1990, c. C.20, AS AMENDED

(the CFA)

 

AND

 

IN THE MATTER OF

THE SECURITIES ACT,

R.S.O. 1990, c. s. 5, AS AMENDED

(the OSA)

 

AND

 

IN THE MATTER OF

ONTARIO SECURITIES COMMISSION RULE 91-502

TRADES IN RECOGNIZED OPTIONS

(Rule 91-502)

 

AND

 

IN THE MATTER OF

BGC FINANCIAL LP,

GFI SECURITIES LLC AND

AMEREX BROKERS LP.

 

RULING & EXEMPTION

(Section 38 of the CFA and Section 6.1 of Rule 91-502)

UPON the application (the Application) of BGC Financial LP, GFI Securities LLC and Amerex Brokers (collectively, the Applicants and each, an Applicant) to the Ontario Securities Commission (the Commission) for:

(a)           a ruling of the Commission, pursuant to section 38 of the CFA, that each Applicant is not subject to the dealer registration requirements in the CFA or the trading restrictions in the CFA in connection with trades (Futures Trades) in Exchange-Traded Futures (as defined below) on exchanges located outside Canada (Non-Canadian Exchanges) where the applicable Applicant is acting as principal or agent in such trades to, from or on behalf of Permitted Clients (as defined below);

 

(b)           a ruling of the Commission, pursuant to section 38 of the CFA, that a Permitted Client is not subject to the dealer registration requirements in the CFA or the trading restrictions in the CFA in connection with Futures Trades on Non-Canadian Exchanges, where an Applicant acts in respect of Futures Trades on behalf of the Permitted Client pursuant to the above ruling; and

 

(c)           a decision of the Director, pursuant to section 6.1 of Rule 91-502, exempting each Applicant and their salespersons, directors, officers and employees (the Representatives) from section 3.1 of Rule 91-502 in connection with Futures Trades;

AND WHEREAS for the purposes of this ruling and exemption (collectively, the Decision):

(i)            “CEA” means the U.S. Commodity Exchange Act;

 

“CFTC” means the U.S. Commodity Futures Trading Commission;

 

“dealer registration requirements in the CFA” means the provisions of section 22 of the CFA that prohibit a person or company from trading in Exchange-Traded Futures unless the person or company satisfies the applicable provisions of section 22 of the CFA;

 

“Exchange-Traded Futures” means a commodity futures contract or a commodity futures option that trades on one or more organized exchanges located outside of Canada and that is cleared through one or more clearing corporations located outside of Canada;

 

“FINRA” means the Financial Industry Regulatory Authority in the U.S.;

 

“NI 31-103” means National Instrument 31-103 Registration Requirements, Exemptions and Ongoing Registrant Obligations;

 

“NFA” means the National Futures Association in the U.S.;

 

“Permitted Client” means a client in Ontario that is a “permitted client” as that term is defined in section 1.1 of NI 31-103;

 

“SEC” means the U.S Securities and Exchange Commission;

 

“specified affiliate” has the meaning ascribed to that term in Form 33-109F6 to National Instrument 33-109 Registration Information;

 

“trading restrictions in the CFA” means the provisions of section 33 of the CFA that prohibit a person or company from trading in Exchange-Traded Futures unless the person or company satisfies the applicable provisions of section 33 of the CFA;

 

“U.S.” means the United States of America; and

 

(ii)           terms used in this Decision that are defined in the OSA, and not otherwise defined in this Decision or in the CFA, shall have the same meaning as in the OSA, unless the context otherwise requires;

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

AND UPON the Applicants having represented to the Commission and the Director as follows:

1.             Each of the Applicants is a wholly-owned indirect subsidiary of BGC Financial L.P. (BGCF). BGCF is a registered Futures Commission Merchant (FCM) under the CEA subject to the regulation and oversight of the CFTC.

 

2.             BGCF also conducts a securities business in the U.S., is a broker-dealer registered with the SEC, and is a member of FINRA.

 

3.             BGCF relies on the international dealer exemption (the IDE) in section 8.18 of NI 31-103 in Ontario and is not registered under the OSA.

 

4.             BGCF is not in default of securities legislation or commodities futures legislation in any jurisdiction in Canada or under the CFA. BGCF is in compliance in all material respects with U.S. securities and commodity futures laws.

 

BGC Financial LP

 

5.             BGC Financial LP (BGC) is a corporation incorporated under the laws of the State of Delaware. Its head office is located in New York, New York, U.S.

 

6.             BGC provides FCM services, which include commodity clearing and execution services to various institutional customers, including affiliates of BGC and customers of such affiliates.

 

7.             BGC is a FCM registered with the CFTC and is a member of the NFA.

 

8.             BGC is a direct member of all major U.S. commodity futures exchanges.

 

9.             BGC does not conduct a securities business in the U.S., is not registered with the SEC, and is not a member of FINRA.

 

10.          BGC does not rely on the IDE in Ontario and is not registered under the OSA or the CFA.

 

11.          Subject to the ruling requested, BGC is not in default of securities legislation or commodities futures legislation in any jurisdiction in Canada or under the CFA. BGC is in compliance in all material respects with U.S. securities and commodity futures laws.

 

GFI Securities

 

12.          GFI Securities LLC (GFI) is a corporation incorporated under the laws of the State of Delaware. Its head office is located in New York, New York, U.S.

 

13.          GFI is registered as an introducing broker with the CFTC and is a member of the NFA.

 

14.          GFI is a direct member of all major U.S. commodity futures exchanges.

 

15.          GFI also conducts a securities business in the U.S., is registered as a broker-dealer with the SEC, and is a member of FINRA.

 

16.          GFI relies on the IDE in section 8.18 of NI 31-103 in Ontario and is not registered under the OSA or the CFA.

 

17.          Subject to the ruling requested, GFI is not in default of securities legislation or commodities futures legislation in any jurisdiction in Canada or under the CFA. GFI is in compliance in all material respects with U.S. securities and commodity futures laws.

 

Amerex Brokers LP

 

18.          Amerex Brokers LP (Amerex) is a corporation incorporated under the laws of the State of Delaware. Its head office is located in Houston, Texas, U.S.

 

19.          Amerex is registered as an introducing broker with the CFTC and is a member of the NFA.

 

20.          Amerex is a direct member of all major U.S. commodity futures exchanges.

 

21.          Amerex does not conduct a securities business in the U.S., is not registered with the SEC, and is not a member of FINRA.

 

22.          Amerex does not rely on the IDE under section 8.18 of NI 31-103 in Ontario and is not registered under the OSA or the CFA.

 

23.          Subject to the ruling requested, Amerex is not in default of securities legislation or commodities futures legislation in any jurisdiction in Canada or under the CFA. The Applicant is in compliance in all material respects with U.S. securities and commodity futures laws.

 

Activities

 

BGC Financial LP

 

24.          Pursuant to its registrations and memberships, BGC is authorized to handle customer orders and receive and hold customer margin deposits, and otherwise act as a futures broker, in the U.S. Rules of the CFTC and NFA require BGC to maintain adequate capital levels, make and keep specified types of records relating to customer accounts and transactions, and comply with other forms of customer protection rules, including rules respecting: know-your-customer obligations, account-opening requirements, suitability requirements, anti-money laundering checks, credit checks, delivery of confirmation statements, clearing deposits and initial and maintenance margins. These rules require BGC to treat Permitted Clients materially the same as BGC’s U.S. customers with respect to transactions made on U.S. exchanges. With respect to transactions made on U.S. exchanges, in order to protect customers in the event of the insolvency or financial instability, BGC is required to ensure that customer securities and monies be separately accounted for, segregated at all times from their own securities and monies (including the securities and monies of their affiliates) and custodied exclusively with such banks, trust companies, clearing organizations or other licensed futures brokers and intermediaries as may be approved for such purposes under the CEA and the rules promulgated by the CFTC thereunder (collectively, the BGC Approved Depositories). BGC is further required to obtain acknowledgements from any BGC Approved Depository holding customer funds or securities related to U.S.-based transactions or accounts that such funds and securities are to be separately held on behalf of such customers, with no right of set-off against the BGC’s obligations or debts.

 

25.          BGC proposes to offer certain of their Permitted Clients in Ontario the ability to trade in Exchange-Traded Futures through BGC.

 

26.          BGC will execute and clear trades in Exchange-Traded Futures on behalf of Permitted Clients in Ontario in the same manner that it executes and clears trades on behalf of its U.S. clients, all of which are “Eligible Contract Participants” as defined in the CEA. BGC will follow the same know-your-customer, client classification and segregation of assets procedures that it follows in respect of its U.S. clients. Permitted Clients will be afforded the benefits of compliance by BGC with the statutory and other requirements of the CEA and the regulations thereunder, applicable securities regulators, self-regulatory organizations and the Exchange Act and the regulations thereunder as well as exchanges located in the U.S. Permitted Clients in Ontario will have the same contractual rights against BGC as U.S. clients of BGC.

 

27.          BGC will not maintain an office, sales force or physical place of business in Ontario.

 

28.          BGC will solicit trades in Exchange-Traded Futures in Ontario only from persons who qualify as Permitted Clients.

 

29.          Permitted Clients of BGC will only be offered the ability to effect trades in Exchange-Traded Futures on Non-Canadian Exchanges.

 

30.          Permitted Clients of BGC will be able to execute Exchange-Traded Futures orders through BGC by contacting BGC’s applicable execution desks. Permitted Clients may also be able to self-execute Exchange-Traded Futures orders electronically via an independent service vendor and/or other electronic trading routing. Permitted Clients may also be able to execute Exchange-Traded Futures orders through third-party brokers and then “give up” the transaction for clearance through BGC.

 

31.          BGC may execute a Permitted Client’s order on the relevant Non-Canadian Exchange in accordance with the rules and customary practices of the exchange, or engage another broker to assist in the execution of orders. BGC will remain responsible for all executions when BGC is listed as the executing broker of record on the relevant Non-Canadian Exchange.

 

32.          BGC may perform both execution and clearing functions for trades in Exchange-Traded Futures or may direct that a trade executed by it be cleared through a carrying broker if BGC is not a clearing member of the Non-Canadian Exchange on which the trade is executed and cleared. Alternatively, the Permitted Client of BGC will be able to direct that trades executed by BGC be cleared through clearing brokers not affiliated with BGC in any way (each a Non-BGC Clearing Broker).

 

33.          If BGC performs only the execution of a Permitted Client’s Exchange-Traded Futures order and “gives-up” the transaction for clearance to a Non-BGC Clearing Broker, such clearing broker will also be required to comply with the rules of the exchanges of which it is a member and any relevant regulatory requirements, including requirements under the CFA as applicable. Each such Non-BGC Clearing Broker will represent to BGC, in an industry-standard give-up agreement, that it will perform its obligations in accordance with applicable laws, governmental, regulatory, self-regulatory, exchange and clearing house rules and the customs and usages of the exchange or clearing house on which the relevant Permitted Client’s Exchange-Traded Futures order will be executed and cleared. BGC will not enter into a give-up agreement with any Non-BGC Clearing Broker located in the United States unless such clearing broker is registered with the CFTC, and is registered with, or has obtained an exemption from the dealer registration requirement from the Commission.

 

34.          As is customary for all trades in Exchange-Traded Futures, a clearing corporation appointed by the exchange or clearing division of the exchange is substituted as a universal counterparty on all trades in Exchange-Traded Futures and Permitted Client orders that are submitted to the exchange in the name of the Non-BGC Clearing Broker or BGC or, on exchanges where BGC is not a member, in the name of another carrying broker. The Permitted Client of BGC is responsible to BGC for payment of daily mark-to-market variation margin and/or proper margin to carry open positions and BGC, the carrying broker or the Non-BGC Clearing Broker is in turn responsible to the clearing corporation/division for payment.

 

35.          Permitted Clients that direct BGC to give up transactions in Exchange-Traded Futures for clearance and settlement by Non-BGC Clearing Brokers will execute the give-up agreements described above.

 

36.          Permitted Clients will pay commissions for trades to BGC. In the event that BGC needs to utilize a Non-BGC Clearing Broker for clearing or execution services in relation to such trades, BGC will pay the Non-BGC Clearing Broker for such services.

 

GFI Securities LLC and Amerex Brokers LLC

 

37.          Pursuant to their registrations and memberships, GFI and Amerex are authorised to act as introducing brokers in the U.S. Rules of the CFTC and NFA require GFI and Amerex to maintain adequate capital levels, make and keep specified types of records relating to customer accounts and transactions, and comply with other forms of customer protection rules, including rules respecting: know-your-customer obligations, client identification, suitability and account-opening requirements, anti-money laundering checks, dealing and handling customer order obligations including managing conflicts of interests and best execution rules. These rules require GFI and Amerex to treat Permitted Clients consistently with the applicable Applicant’s U.S. customers with respect to transactions made on exchanges in the U.S. In respect of Exchange-Traded Futures, GFI and Amerex do not provide execution or clearing services and are not authorised to receive or hold client money in any jurisdiction.

 

38.          GFI and Amerex propose to offer certain of their Permitted Clients in Ontario the ability to trade in Exchange-Traded Futures through the applicable Applicant, in their role as introducing brokers.

 

39.          Neither GFI nor Amerex will maintain an office, sales force or physical place of business in Ontario.

 

40.          GFI and Amerex will solicit Futures Trades in Ontario only from persons who qualify as Permitted Clients.

 

41.          Permitted Clients of GFI and Amerex will only be offered the ability to effect Futures Trades on Non-Canadian Exchanges.

 

42.          GFI and Amerex will introduce Futures Trades on behalf of Permitted Clients in Ontario in the same manner that the applicable Applicant introduces trades on behalf of its U.S. clients. The applicable Applicant will follow the same know-your-customer, suitability, and order handling procedures that it follows in respect of its U.S. clients. Permitted Clients will be afforded the benefits of compliance by the applicable Applicant with the statutory and other requirements of the regulators and self-regulatory organizations located in the U.S. Permitted Clients in Ontario will have the same contractual rights against the applicable Applicant as U.S. clients of the applicable Applicant.

 

43.          Permitted Clients of GFI and Amerex will be able to execute Exchange-Traded Futures orders by contacting the applicable Applicant’s client order handling desk, where orders will be transmitted to an executing broker for execution. Permitted Clients may also be able to self-execute Exchange-Traded Futures orders electronically via an independent service vendor and/or other electronic trading routing.

 

44.          GFI and Amerex will arrange to have a Permitted Client’s order executed on the relevant Non-Canadian Exchange by an executing broker registered as a FCM under the CEA in accordance with the rules and customary practices of the exchange. The Permitted Client will be a client of both the applicable Applicant and the executing broker. The applicable Applicant will remain responsible for all executions when the applicable Applicant is listed as the executing broker in the relevant give-up agreement; when the applicable Applicant is listed as the introducing broker in the relevant give-up agreement, the executing broker will be responsible for the execution to the client. There will thus always be a registered regulated party who is responsible to the client.

 

45.          GFI and Amerex will perform introducing (as introducing broker) functions for Futures Trades. The executing broker will act to “give-up” the transacted trades to the Permitted Client’s clearing broker.

 

46.          The clearing brokers and executing broker will also be required to comply with the rules of the exchanges of which each is a member and any relevant regulatory requirements, including requirements under the CFA, as applicable. The Permitted Client, the executing broker and the Permitted Client’s clearing broker will represent to the applicable Applicant, in an industry standard give-up agreement, that each will perform its obligations in accordance with applicable laws, governmental, regulatory, self-regulatory, exchange and clearing house rules and the customs and usages of the exchange or clearing house on which the relevant Permitted Client’s Exchange-Traded Futures order will be executed and cleared. The applicable Applicant will not enter into a give-up agreement with any executing broker registered as a FCM or clearing broker unless such firm is registered with the applicable regulatory bodies in the jurisdiction in which it executes Futures Trades, and is registered with, or has obtained an exemption from the dealer registration requirement from the Commission. The applicable Applicant will not enter into a give-up agreement with any clearing broker located in the U.S. unless such clearing broker is registered with the CFTC, and is registered with, or has obtained an exemption from the dealer registration requirement from the Commission.

 

47.          As is customary for all Futures Trades, a clearing corporation appointed by the exchange or clearing division of the exchange is substituted as a universal counterparty on all trades in Exchange-Traded Futures and Permitted Client orders that are submitted to the exchange in the name of the recognized exchange member and clearing broker. The Permitted Client of the applicable Applicant is responsible to its clearing broker for payment of daily mark-to-market variation margin and/or proper margin to carry open positions and the Permitted Client’s clearing broker is in turn responsible to the clearing corporation/division for payment.

 

48.          Permitted Clients will pay commissions for trades introduced by either GFI or Amerex. The applicable Applicant will pay commissions to the executing broker and the clearing broker.

 

49.          The Exchange-Traded Futures to be traded by Permitted Clients will include, but will not be limited to, Exchange-Traded Futures for equity index, interest rate, foreign exchange, bond, energy, agricultural and other commodity products.

 

50.          The trading restrictions in the CFA apply unless, among other things, an Exchange-Traded Future is traded on a recognized or registered commodity futures exchange and the form of the contract is approved by the Director. To date, no Non-Canadian Exchanges have been recognized or registered under the CFA.

 

51.          If the Applicants were registered under the CFA as “futures commission merchants”, they could rely upon certain exemptions from the trading restrictions in the CFA to effect trades in Exchange-Traded Futures to be entered into on certain Non-Canadian Exchanges.

 

52.          Section 3.1 of Rule 91-502 provides that no person shall trade as agent in, or give advice in respect of, a recognized option, as defined in section 1.1 of Rule 91-502, unless he or she has successfully completed the Canadian Options Course (which has been replaced by the Derivatives Fundamentals Course and the Options Licensing Course).

 

53.          All Representatives who would trade in options in the U.S. have satisfied the futures and options proficiency requirements of the National Futures Association (i.e., passed the National Commodity Futures Examination (Series 3) administered by FINRA or met such other alternatives to the Series 3 examination as permitted by the National Futures Association) and are registered in the capacity of Associated Person.

AND UPON the Commission and the Director being satisfied that it would not be prejudicial to the public interest to grant the exemptions requested;

IT IS RULED, pursuant to section 38 of the CFA, that each Applicant is not subject to the dealer registration requirement set out in the CFA or the trading restrictions in the CFA in connection with trades in Exchange-Traded Futures where the applicable Applicant is acting as principal or agent in such trades to, from or on behalf of Permitted Clients provided that:

 

(a)           each client effecting trades in Exchange-Traded Futures is a Permitted Client;

 

(b)           in the case of BGC, if using a Non-BGC Clearing Broker, the clearing broker has represented and covenanted, and BGC has taken reasonable steps to verify, that the broker is appropriately registered or exempt from registration under the CFA;

 

(c)           in the case of GFI and Amerex, the executing broker and clearing broker have each represented and covenanted to the applicable Applicant, and the applicable Applicant has taken reasonable steps to verify, that it is appropriately registered under the CFA, or has been granted exemptive relief from the registration requirements in the CFA, in connection with the Permitted Client effecting Futures Trades;

 

(d)           each Applicant only introduces, executes, and/or clears, as applicable, trades in Exchange-Traded Futures for Permitted Clients on Non-Canadian Exchanges;

 

(e)           at the time trading activity is engaged in, BGC

 

(i)            has its head office or principal place of business in the U.S.;

 

(ii)           is registered as a FCM with the CFTC;

 

(iii)          is a member of the NFA; and

 

(iv)          engages in the business of a FCM in Exchange-Traded Futures in the U.S.;

 

(f)            at the time trading activity is engaged in, each of GFI Securities LLC and Amerex Brokers LLC

 

(i)            has its head office or principal place of business in the U.S.;

 

(ii)           is registered in the category of introducing broker with the CFTC;

 

(iii)          is a member of the NFA; and

 

(iv)          engages in the business of an introducing broker in Exchange-Traded Futures in the U.S.;

 

(g)           each of the Applicants has provided to the Permitted Client the following disclosure in writing:

 

(i)            a statement that the Applicant is not registered in Ontario to trade in Exchange-Traded Futures as principal or agent;

 

(ii)           a statement that the Applicant’s head office or principal place of business is located in the United States of America;

 

(iii)          a statement that all or substantially all of the Applicant’s assets may be situated outside of Canada;

 

(iv)          a statement that there may be difficulty enforcing legal rights against the Applicant because of the above; and

 

(v)           the name and address of the Applicant’s agent for service of process in Ontario;

 

(h)           each of the Applicants has submitted to the Commission a completed Submission to Jurisdiction and Appointment of Agent for Service in the form attached as Appendix “A” hereto;

 

(i)            the applicable Applicant notifies the Commission of any regulatory action initiated after the date of this ruling in respect of the applicable Applicant, or any predecessors or specified affiliates of the applicable Applicant, by completing and filing with the Commission Appendix “B” hereto within ten days of the commencement of such action; provided that the applicable Applicant may also satisfy this condition by filing with the Commission within ten days of the date of this Decision a notice making reference to and incorporating by reference the disclosure made by BGCF pursuant to U.S. federal securities laws that is identified in the FINRA Broker Check system, and any updates to such disclosure as may be made from time to time, and by providing notification, in a manner reasonably acceptable to the Director, of any filing of a Form BD “Regulatory Action Disclosure Reporting Page”;

 

(j)            if an Applicant does not rely on the IDE by December 31st of each year, the Applicant pays a participation fee based on its specified Ontario revenues for its previous financial year in compliance with the requirements of Part 3 and section 6.4 of OSC Rule 13-502 Fees as if the Applicant relied on the IDE; and

 

(k)           by December 1st of each year, each Applicant notifies the Commission of its continued reliance on the exemption from the dealer registration requirement granted pursuant to this Decision by filing Form 13-502F4 Capital Markets Participation Fee Calculation; and

this Decision will terminate on the earliest of:

 

(i)            the expiry of any transition period as may be provided by law, after the effective date of the repeal of the CFA;

 

(ii)           six months, or such other transition period as may be provided by law, after the coming into force of any amendment to Ontario commodity futures law (as defined in the CFA) or Ontario securities law (as defined in the OSA) that affects the dealer registration requirements in the CFA or the trading restrictions in the CFA; and

 

(iii)          five years after the date of this Decision.

 

AND IT IS FURTHER RULED, pursuant to section 38 of the CFA, that a Permitted Client is not subject to the dealer registration requirement in the CFA or the trading restrictions in the CFA in connection with trades in Exchange-Traded Futures on Non-Canadian Exchanges where the Applicants act in connection with trades in Exchange-Traded Futures on behalf of the Permitted Clients pursuant to the above ruling.

“Grant Vingoe”

Vice Chair

Ontario Securities Commission

“Timothy Moseley”

Vice Chair

Ontario Securities Commission

IT IS THE DECISION of the Director, pursuant to section 6.1 of Rule 91-502, that section 3.1 of Rule 91-502 does not apply to each Applicants’ Representatives in respect of trades in Exchange-Traded Futures, provided that:

(a)           such Applicant and its Representatives maintain their respective registrations and memberships with the CFTC and NFA which permit them to trade and clear commodity futures options in the U.S.; and

 

(b)           this Decision will terminate on the earliest of:

 

(i)            the expiry of any transition period as may be provided by law, after the effective date of the repeal of the CFA;

 

(ii)           six months, or such other transition period as may be provided by law, after the coming into force of any amendments to Ontario commodity futures law (as defined in the CFA) or Ontario securities law (as defined in the OSA) that affects the dealer registration requirements in the CFA or the trading restrictions in the CFA; and

 

(iii)          five years after the date of this Decision.

“Elizabeth King”

Deputy Director

Ontario Securities Commission

Dated January 23, 2018

APPENDIX “A”

 

SUBMISSION TO JURISDICTION AND APPOINTMENT OF AGENT FOR SERVICE

 

INTERNATIONAL DEALER OR INTERNATIONAL ADVISER EXEMPTED FROM

REGISTRATION UNDER THE COMMODITY FUTURES ACT, ONTARIO

1.             Name of person or company ("International Firm"):

 

2.             If the International Firm was previously assigned an NRD number as a registered firm or an unregistered exempt international firm, provide the NRD number of the firm:

 

3.             Jurisdiction of incorporation of the International Firm:

 

4.             Head office address of the International Firm:

 

5.             The name, e-mail address, phone number and fax number of the International Firm's individual(s) responsible for the supervisory procedure of the International Firm, its chief compliance officer, or equivalent.

 

Name:

E-mail address:

Phone:

Fax:

 

6.             The International Firm is relying on an exemption order under section 38 or section 80 of the Commodity Futures Act (Ontario) that is similar to the following exemption in National Instrument 31-103 Registration Requirements, Exemptions and Ongoing Registrant Obligations (the "Relief Order"):

 

  Section 8.18 [international dealer]

 

  Section 8.26 [international adviser]

 

  Other [specify]:

 

7.             Name of agent for service of process (the "Agent for Service"):

 

8.             Address for service of process on the Agent for Service:

 

9.             The International Firm designates and appoints the Agent for Service at the address stated above as its agent upon whom may be served a notice, pleading, subpoena, summons or other process in any action, investigation or administrative, criminal, quasi-criminal or other proceeding (a "Proceeding") arising out of or relating to or concerning the International Firm's activities in the local jurisdiction and irrevocably waives any right to raise as a defence in any such proceeding any alleged lack of jurisdiction to bring such Proceeding.

 

10.          The International Firm irrevocably and unconditionally submits to the non-exclusive jurisdiction of the judicial, quasi-judicial and administrative tribunals of the local jurisdiction in any Proceeding arising out of or related to or concerning the International Firm's activities in the local jurisdiction.

 

11.          Until 6 years after the International Firm ceases to rely on the Relief Order, the International Firm must submit to the regulator

 

a.             a new Submission to Jurisdiction and Appointment of Agent for Service in this form no later than the 30th day before the date this Submission to Jurisdiction and Appointment of Agent for Service is terminated;

 

b.             an amended Submission to Jurisdiction and Appointment of Agent for Service no later than the 30th day before any change in the name or above address of the Agent for Service;

 

c.             a notice detailing a change to any information submitted in this form, other than the name or above address of the Agent for Service, no later than the 30th day after the change.

 

12.          This Submission to Jurisdiction and Appointment of Agent for Service is governed by and construed in accordance with the laws of the local jurisdiction.

Dated: _______________

________________________________________________

(Signature of the International Firm or authorized signatory)

________________________________________________

(Name of signatory)

________________________________________________

(Title of signatory)

Acceptance

The undersigned accepts the appointment as Agent for Service of _______________ [Insert name of International Firm] under the terms and conditions of the foregoing Submission to Jurisdiction and Appointment of Agent for Service.

Dated: ____________________

________________________________________________

(Signature of the Agent for Service or authorized signatory)

________________________________________________

(Name of signatory)

________________________________________________

(Title of signatory)

This form, and notice of a change to any information submitted in this form, is to be submitted through the Ontario Securities Commission’s Electronic Filing Portal:

https://www.osc.gov.on.ca/filings


APPENDIX “B”

 

NOTICE OF REGULATORY ACTION

1.             Has the firm, or any predecessors or specified affiliates[1] of the firm entered into a settlement agreement with any financial services regulator, securities or derivatives exchange, SRO or similar agreement with any financial services regulator, securities or derivatives exchange, SRO or similar organization?

 

Yes _____ No _____

 

If yes, provide the following information for each settlement agreement:

 

Name of entity

Regulator/organization

Date of settlement (yyyy/mm/dd)

Details of settlement

Jurisdiction

2.             Has any financial services regulator, securities or derivatives exchange, SRO or similar organization:

Yes

No

a)            Determined that the firm, or any predecessors or specified affiliates of the firm violated any securities regulations or any rules of a securities or derivatives exchange, SRO or similar organization?

___

___

(b)           Determined that the firm, or any predecessors or specified affiliates of the firm made a false statement or omission?

___

___

(c)           Issued a warning or requested an undertaking by the firm, or any predecessors or specified affiliates of the firm?

___

___

(d)           Suspended or terminated any registration, licensing or membership of the firm, or any predecessors or specified affiliates of the firm?

___

___

(e)           Imposed terms or conditions on any registration or membership of the firm, or predecessors or specified affiliates of the firm?

___

___

(f)            Conducted a proceeding or investigation involving the firm, or any predecessors or specified affiliates of the firm?

___

___

(g)           Issued an order (other than an exemption order) or a sanction to the firm, or any predecessors or specified affiliates of the firm for securities or derivatives-related activity (e.g. cease trade order)?

___

___

If yes, provide the following information for each action:

Name of entity

Type of action

Regulator/organization

Date of action (yyyy/mm/dd)

Reason for action

Jurisdiction


3.             Is the firm aware of any ongoing investigation of which the firm or any of its specified affiliates is the subject?

 

Yes _____ No _____

 

If yes, provide the following information for each investigation:

 

Name of entity

Reason or purpose of investigation

Regulator/organization

Date investigation commenced (yyyy/mm/dd)

Jurisdiction

 

Name of firm:

Name of firm’s authorized signing officer or partner

Title of firm’s authorized signing officer or partner

Signature

Date (yyyy/mm/dd)

Witness

The witness must be a lawyer, notary public or commissioner of oaths.

Name of witness

Title of witness

Signature

Date (yyyy/mm/dd)

This form is to be submitted through the Ontario Securities Commission’s Electronic Filing Portal:

https://www.osc.gov.on.ca/filings

 

 

[1]       In this Appendix, the term "specified affiliate" has the meaning ascribed to that term in Form 33-109F6 to National Instrument 33-109 Registration Information.