Dundee Wealth Management Inc. & Dundee Bancorp Inc. - MRRS Decision
Headnote
MRRS - Mutual Reliance Review System for Exemptive Relief Applications - relief for senior officers and directors ofsubsidiaries other than "significant" subsidiaries, and particular directors and vice-presidents of "significant" subsidiaries,of reporting issuer from the insider reporting requirements, subject to certain conditions.
Applicable Ontario Statutory Provisions
Securities Act, R.S.O. 1990, c.S.5, as am., s. 1(1), 107, 108, 121(2)(a)(ii).
Applicable Ontario Regulations
Regulation made under the Securities Act, R.R.O. 1990, Reg. 1015, as am., Part VIII.
Applicable Ontario Policies
Policy Statement 10.1 - Applications for Exemption from Insider Reporting Obligations for Insiders of Subsidiaries andAffiliated Issuers.
Applicable National Instruments
Proposed National Instrument 55-101 - Exemption from Certain Insider Reporting Requirements - published for comment(1999) 22 OSCB 5161.
IN THE MATTER OF
THE SECURITIES LEGISLATION OF ALBERTA,
SASKATCHEWAN, MANITOBA, ONTARIO, QUEBEC, NOVA SCOTIA AND NEWFOUNDLAND
AND
IN THE MATTER OF
THE MUTUAL RELIANCE REVIEW SYSTEM FOR
EXEMPTIVE RELIEF APPLICATIONS
AND
IN THE MATTER OF
DUNDEE WEALTH MANAGEMENT INC.
AND DUNDEE BANCORP INC.
MRRS DECISION DOCUMENT
WHEREAS the local securities regulatory authority or regulator (the "Decision Maker") in each of Alberta,Saskatchewan, Manitoba, Ontario, Quebec, Nova Scotia and Newfoundland (the "Jurisdictions") has received anapplication from Dundee Wealth Management Inc. ("DWM") and Dundee Bancorp Inc. ("DBI") (collectively the "Filers")for a decision pursuant to the securities legislation of the Jurisdictions (the "Legislation") that the requirement in theLegislation for an insider of a reporting issuer to file reports disclosing the insider's direct or indirect beneficial ownershipof, or control or direction over, securities of the reporting issuer (the "Insider Reporting Requirement") shall not applyto certain of the directors and senior officers of the Filers' subsidiaries;
AND WHEREAS, pursuant to the Mutual Reliance Review System for Exemptive Relief Applications (the"System"), the Ontario Securities Commission is the principal regulator for such application;
AND WHEREAS the Filers have represented to the Decision Makers that:
1. Each of the Filers is a corporation subsisting under the Business Corporations Act (Ontario).
2. The head office of each of the Filers is located in Toronto, Ontario.
3. DWM is authorized to issue, among other securities, an unlimited number of common shares ("DWM CommonShares").
4. DBI is authorized to issue, among other securities, an unlimited number of class A subordinate voting shares("DBI Class A Shares").
5. Each of the Filers is a reporting issuer or its equivalent under the Legislation in each of the Jurisdictions andis not in default of its obligations under such Legislation.
6. The DWM Common Shares and the DBI Class A Shares are listed on the Toronto Stock Exchange.
7. DBI is a merchant banking and financial service company and an insider of DWM because it holds, as of thedate of this Decision Document, directly or indirectly, securities of DWM representing, collectively, an 85.3%equity interest and an 86.6% voting interest. DBI is also currently an insider of certain reporting issuers underthe Legislation of one or more of the Jurisdictions (collectively with DWM, the "Current Reporting Issuers") andit may become an insider of additional reporting issuers (collectively with the Current Reporting Issuers, the"Other Reporting Issuers").
8. DBI may, in the future, increase or decrease its beneficial ownership, control or direction over the commonshares or other securities of the Other Reporting Issuers.
9. Each of the Filers currently owns, directly or indirectly, numerous subsidiaries and may from time to time in thefuture acquire or establish other subsidiaries (all such current and future subsidiaries of either of the Filers arereferred to collectively as the "Dundee Subsidiaries").
10. Presently Dundee Securities Corporation ("DSC") and Dynamic Mutual Funds Ltd. ("DMFL") are SignificantSubsidiaries (as hereinafter defined) of DWM and DBI.
11. DSC is an investment dealer and employs a number of people as investment bankers, traders, analysts,salespersons, communications personnel, compliance personnel, human resources personnel and otheradministrative personnel who have been designated as vice-presidents and/or directors of DSC as is standardin the industry (the "Designated DSC Insiders").
12. The duties of the Designated DSC Insiders who are vice-presidents and/or directors include: (i) providinginvestment management services and investment advice to institutional and retail clients; (ii) researchingspecific industries and specific companies to assist individual investors and institutional clients in the makingof investment decisions; (iii) overseeing the record keeping undertaken in relation to the client accounts ofDSC; (iv) monitoring and ensuring compliance with regulations that apply to investment dealers; (v) analysingand managing the staffing needs of DSC; (vi) selling, purchasing and trading equity and equity-relatedsecurities on behalf of individual investors, institutional clients and DSC in the ordinary course of business; (vii)providing investment banking services in connection with financings and financial advisory engagements in anumber of industry sectors; (viii) dealing with the technology and back office requirements of DSC; and (ix)dealing with the marketing, advertising, recruitment and product development requirements of DSC.
13. DSC has in place a unanimous shareholders declaration that removes from the directors thereof the power tomanage or supervise the management of the business or affairs of DSC and delegates such power to theChairman and Managing Director of DSC. DWM, the sole shareholder of DSC, may, in the future, amend thedeclaration to delegate such power to other or additional officers of DSC. DSC does not currently have aManaging Director. The Chairman of DSC is not a Designated DSC Insider and any other individual to whomsuch power is delegated will also not be a Designated DSC Insider. Accordingly, directors of DSC who areDesignated DSC Insiders do not have access to information normally given to directors of corporations.
14. DMFL is an investment management company and employs investment managers, traders, marketingpersonnel, compliance personnel and other administrative personnel who have been designated as vice-presidents of DMFL as is standard in the industry (the "Designated DMFL Insiders").
15. The duties of the Designated DMFL Insiders include: (i) providing investment management services to anumber of open-end and closed-end investment funds and wealth management programs; (ii) overseeing therecord keeping undertaken in relation to unitholder account information and the distribution of new products;(iii) monitoring and ensuring compliance with regulations that apply to investment management companies andmutual funds; (iv) wholesale distribution of investment products created by DMFL; (v) dealing with thetechnology and back office requirements of DMFL; and (vi) dealing with the marketing, advertising, recruitmentand product development requirements of DMFL.
16. None of the Designated DSC Insiders, the Designated DMFL Insiders or the directors and senior officers of theDundee Subsidiaries that are not Significant Subsidiaries (collectively with the Designated DSC Insiders andthe Designated DMFL Insiders, the "Dundee Insiders") receives, in the ordinary course, information as tomaterial facts or material changes (before the material facts or material changes are generally disclosed)concerning (i) the Filers (including material facts or material changes concerning a Significant Subsidiary whichconstitute material facts or material changes concerning the applicable Filer), (ii) the Other Reporting Issuers,or (iii) reporting issuers which are insiders of either of the Filers (the "Dundee Reporting Issuers").
17. No information regarding the financial results, budgets or business plans of the Filers, the Other ReportingIssuers or the Dundee Reporting Issuers is made available to the Dundee Insiders prior to such informationbeing generally disclosed. The duties of the Dundee Insiders do not include interpreting the financial andoperational significance of information in the context of the Filers, the Other Reporting Issuers or the DundeeReporting Issuers.
18. None of the Dundee Insiders is a director or officer of either of the Filers. None of the Dundee Insidersparticipates in the day to day management or operations of either of the Filers. None of the Dundee Insidershas control over a principal business unit or division of either of the Filers or a Significant Subsidiary.
19. Each of the Filers shall maintain a continuous review of the relevant facts contained in the representations uponwhich this Decision Document is based, and shall maintain a list of the directors and senior officers of eachDundee Subsidiary exempted from the Insider Reporting Requirement by this MRRS Decision Document andthe basis upon which each of the directors and senior officers comes within the terms of this MRRS DecisionDocument.
20. The Filers shall, at the end of each month, advise each of the Decision Makers of the name of everyDesignated DSC Insider and Designated DMFL Insider who becomes, or ceases to be, exempted by thisDecision during such month and, within 30 days of the end of each calendar year, shall provide each of theDecision Makers with an updated list of the Designated DSC Insiders and Designated DMFL Insiders.
21. The Filers shall, at the request of the Decision Makers, furnish any information necessary for the DecisionMakers to determine whether a director or senior officer of any Dundee Subsidiary is or is not exempted by thisMRRS Decision Document.
AND WHEREAS for the purposes of this MRRS Decision Document, "Significant Subsidiary" means asubsidiary of either of the Filers if:
(a) the assets of the subsidiary, on a consolidated basis with all its subsidiaries, as included in the mostrecent annual audited balance sheet filed by such Filer, is 10 percent or more of the consolidatedassets of such Filer reported on such balance sheet; or
(b) the revenues of the subsidiary, on a consolidated basis with its subsidiaries, as included in the mostrecent annual audited income statement of such Filer, is 10 percent or more of the consolidatedrevenues of such Filer shown on such statement;
AND WHEREAS under the System this MRRS Decision Document evidences the decision of each DecisionMaker (collectively the "Decision");
AND WHEREAS each of the Decision Makers is satisfied that the test contained in the Legislation that providesthe Decision Maker with the jurisdiction to make the Decision has been met;
THE DECISION of the Decision Makers under the Legislation is that the directors and senior officers of theDundee Subsidiaries other than Dundee Subsidiaries that are Significant Subsidiaries are exempted from the InsiderReporting Requirement in respect of securities of either of the Filers, provided that:
(i) the director or senior officer does not receive, in the ordinary course, information as to material factsor material changes concerning either of the Filers before the material facts or material changes aregenerally disclosed; and
(ii) the director or senior officer is not also an insider of either of the Filers in a capacity other than as adirector or senior officer of the applicable Dundee Subsidiary and is not otherwise exempted from theInsider Reporting Requirement; and
THE FURTHER DECISION of the Decision Makers under the Legislation is that the directors and senior officersof the Dundee Subsidiaries that are Significant Subsidiaries are exempted from the Insider Reporting Requirement inrespect of securities of either of the Filers, provided that:
(i) the director or senior officer is a Designated DSC Insider or a Designated DMFL Insider;
(ii) the director or senior officer does not receive, in the ordinary course, information as to material factsor material changes concerning either of the Filers (which for this purpose includes material facts ormaterial changes with respect to a Significant Subsidiary of a Filer that constitute material facts ormaterial changes with respect to the Filer itself) before the material facts or material changes aregenerally disclosed; and
(iii) the director or senior officer is not also an insider of either of the Filers in a capacity other than as adirector or senior officer of the applicable Dundee Subsidiary and is not otherwise exempted from theInsider Reporting Requirement; and
THE FURTHER DECISION of the Decision Makers under the Legislation other than Quebec is that the directorsor senior officers of a Dundee Subsidiary are exempted from the Insider Reporting Requirement in respect of securitiesof an Other Reporting Issuer or of a Dundee Reporting Issuer, provided that:
(i) the director or senior officer does not receive, in the ordinary course, information as to material factsor material changes concerning the applicable Other Reporting Issuer or Dundee Reporting Issuerbefore the material facts or material changes are generally disclosed;
(ii) the director or senior officer is not also an insider of the applicable Other Reporting Issuer or DundeeReporting Issuer in a capacity other than as a director or senior officer of an affiliate of an insider ofsuch Other Reporting Issuer or Dundee Reporting Issuer and is not otherwise exempted from theInsider Reporting Requirements; and
(iii) the director or senior officer is not a director or senior officer of a company that supplies goods orservices to such Other Reporting Issuer or Dundee Reporting Issuer or has contractual arrangementswith such Other Reporting Issuer or Dundee Reporting Issuer, and the nature and scale of the supplyor contractual arrangements could reasonably be expected to have a significant effect on the marketprice or value of the securities of such Other Reporting Issuer or Dundee Reporting Issuer.
April 24, 2001.
"Paul Moore" "R.S. Paddon"