E*TRADE Canada Securities Corporation - MRRS Decision

March 6, 2001

MRRS Decision

Headnote

Mutual Reliance Review System for Exemptive Relief Applications - Pursuant to section 144 of the Act, variation of anorder providing, subject to terms and conditions, relief from the Suitability Requirements, as reflected in paragraph1.5(1)(b) of OSC Rule 31-505, to extend the time period for Client Acknowledgements.

Pursuant to section 144 of the Act, variation of a decision made pursuant to s.21.1(4) of the Act, that, subject to termsand conditions, the IDA Suitability Requirements do not apply to the Filer, to extend the time period for ClientAcknowledgements.

Applicable Ontario Statute

Securities Act R.S.O. 1990, c.S.5, as amended, s.21.1(4), s.144.

Rules Cited

Ontario Securities Commission Rule 31-505 "Conditions of Registration" (1999) 22 O.S.C.B. 731.

IDA Regulations Cited

IDA Regulation 1300.1(b), 1800.5(b), 1900.4.

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
E*TRADE CANADA SECURITIES CORPORATION

MRRS DECISION DOCUMENT

WHEREAS the local securities regulatory authority or regulator (the "Decision Maker") in each of the provincesof British Columbia, Alberta, Saskatchewan, Newfoundland, Nova Scotia and Ontario (collectively, the "Jurisdictions")has received an application from E*TRADE Canada Securities Corporation (the "Filer"), formerly known as VERSUSBrokerage Services Inc., to vary the MRRS Decision Document dated September 7, 2000 IN THE MATTER OF VERSUSBROKERAGE SERVICES INC. which provided, subject to terms and conditions, relief from suitability obligations underthe securities legislation of the Jurisdictions and decided, subject to terms and conditions and other than under thesecurities legislation of Newfoundland and Nova Scotia, that suitability requirements of the Investment DealersAssociation of Canada do not apply to the Filer (the "Suitability Relief Order");

AND WHEREAS the terms "Suitability Requirements", "IDA Suitability Requirements", "RegisteredRepresentatives" and "Client Acknowledgement" shall each have the respective meaning ascribed thereto under theSuitability Relief Order;

AND WHEREAS the Filer wishes to vary the Suitability Relief Order to extend the specified time within whichit must continue to comply with Suitability Requirements and IDA Suitability Requirements for existing client accountsfor which no Client Acknowledgement is received from March 8, 2001 to June 30, 2001 and to extend the specified timeafter which restrictions are placed on existing client accounts for which no Client Acknowledgement is received fromMarch 8, 2001 to June 30, 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 is now a company existing under the Companies Act (Nova Scotia) and the Filer hasRegistered Representatives registered in each of the Jurisdictions and executive officers located inthe province of Ontario;

2. the Filer and its Registered Representatives will continue to comply with the Suitability Requirementsand IDA Suitability Requirements for client accounts for which no Client Acknowledgement is receiveduntil June 30, 2001;

3. after June 30, 2001, the Filer will not permit a transaction in an account for which a ClientAcknowledgement has not been received unless the transaction is a sale for cash or a transfer ofassets to another account;

4. except as noted above, the Filer confirms the representations to the Decision Makers in the SuitabilityRelief Order; and

5. subject to this variation order being granted, the Filer will inform all clients who have not yet provideda Client Acknowledgement that the specified time within which the Filer must continue to comply withSuitability Requirements and IDA Suitability Requirements has been extended to June 30, 2001 andthe specified time after which restrictions are placed on existing client accounts for which no ClientAcknowledgement is received has been extended to June 30, 2001;

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 Suitability Relief Order is amended byreplacing term and condition 6 and 7 of the Suitability Relief Order in respect of Suitabililty Requirements with thefollowing:

"6. the Filer and its Registered Representatives continue to comply with their Suitability Requirements andIDA Suitability Requirements for client accounts for which no Client Acknowledgement is received untilJune 30, 2001;

7. after June 30, 2001, the Filer will not permit transactions in an account for which a ClientAcknowledgement has not been received unless the transaction is a sale for cash or a transfer ofassets to another account;"

March 6, 2001.

"William R. Gazzard"

THE DECISION of the Decisions Makers, other than Nova Scotia and Newfoundland, is that the Suitability ReliefOrder is amended by replacing term and condition 6 and 7 of the Suitability Relief Order in respect of IDA SuitabililtyRequirements with the following:

March 6, 2001.

"J. A. Geller" "R. Stephen Paddon"