Canadian Depository for Securities Limited and CDS Clearing and Depository Services Inc. – s. 144
Headnote
Application under section 144 of the Securities Act (Ontario) to vary the Recognition Order of The Canadian Depository for Securities Limited and CDS Clearing and Depository Services Inc.
Applicable Legislative Provisions
Securities Act, R.S.O. 1990, c. S.5, as am., ss. 21.2(0.1), 144.
IN THE MATTER OF THE SECURITIES ACT, R.S.O. 1990, c. S.5, AS AMENDED (Act) AND IN THE MATTER OF THE CANADIAN DEPOSITORY FOR SECURITIES LIMITED AND CDS CLEARING AND DEPOSITORY SERVICES INC.
VARIATION ORDER (Section 144 of the Act)
WHEREAS the Ontario Securities Commissions (Commission) issued an order dated July 4, 2012, as varied and restated on December 21, 2012 and as varied on December 7, 2012, May 1, 2013, June 25, 2013, June 24, 2014, January 27, 2015, March 27, 2015 and December 20, 2016, pursuant to section 21.2 of the Act continuing the recognition of The Canadian Depository for Securities Limited (CDS Ltd.) and CDS Clearing and Depository Services Inc. (together with CDS Ltd., CDS) as clearing agencies (the Clearing Agency Recognition Order);
AND WHEREAS CDS has filed an application (Application) with the Commission to vary the Clearing Agency Recognition Order pursuant to section 144 of the Act to replace the definition of "independent" in section 4.3(a) of Schedule "B" of the Clearing Agency Recognition Order (the Independence Definition) for the limited purpose of permitting the same individuals to be considered "independent" for the boards of directors of both CDS and the Canadian Derivatives Clearing Association (CDCC);
AND WHEREAS the Application requests that the Commission vary the Independence Definition to provide that notwithstanding paragraphs (ii), (iii) and (iv) of such definition, a director of CDCC is not considered to be non-independent solely on the ground that he or she is (v) a director, or in the case of the chair of the board of directors only, an officer, of CDCC, or (vi) in the case of the chair of the board of directors only, an officer of CDS, a recognized clearing agency;
AND WHEREAS the Commission has determined based on the Application and representations made by CDS that it is not prejudicial to the public interest to vary the Clearing Agency Recognition Order to replace the Independence Definition;
IT IS HEREBY ORDERED that, pursuant to section 144 of the Act, section 4.3(a) of Schedule "B" of the Clearing Agency Recognition Order is deleted and replaced with the following:
(a) a director is independent, if the director is not:
(i) an associate, partner, director, officer or employee of a significant Maple shareholder;
(ii) an associate, partner, director, officer or employee of a Participant of the recognized clearing agency or such Participant's affiliated entities or an associate of such director, partner, officer or employee;
(iii) an associate, partner, director, officer or employee of a marketplace or such marketplace's affiliated entities or an associate of such partner, director, officer or employee, or
(iv) an officer or employee of the recognized clearing agency or its affiliated entities or an associate of such officer or employee,
notwithstanding paragraphs (ii), (iii) and (iv) above:
(v) a director of the Canadian Derivatives Clearing Corporation (CDCC) is not considered to be non-independent solely on the ground that he or she is a director, or in the case of the chair of the board of directors only, an officer, of CDCC; and
(vi) the chair of the board of directors of the recognized clearing agency is not considered non-independent solely on the ground that he or she is an officer of the recognized clearing agency; and
Dated at Toronto this 28th day of February, 2018.