Goodman & Company N.Y. Ltd. and Goodman & Company, Investment Counsel Ltd.
Headnote
U.S. registered investment adviser exempted from the adviser registration requirement of the Act and the Commodity Futures Act (Ontario) in connection with its acting as adviser to clients that are resident in the U.S. or other jurisdictions outside of Canada -- Advising representatives acting on behalf of the U.S. adviser also exempted, provided they act through the U.S. adviser and the advising representatives are also registered representatives of registered investment adviser parent company. Both the U.S. adviser and advising representative are required to comply with the securities law of the U.S. or other foreign jurisdiction.
Statutes Cited
Securities Act (Ontario).
Commodity Futures Act (Ontario).
October 25, 2011
IN THE MATTER OF
THE SECURITIES ACT (ONTARIO)
(the Act)
AND
IN THE MATTER OF
THE COMMODITY FUTURES ACT (ONTARIO)
(the CFA)
AND
IN THE MATTER OF
GOODMAN & COMPANY N.Y. LTD. AND
GOODMAN & COMPANY,
INVESTMENT COUNSEL LTD.
ORDER
Background
The Ontario Securities Commission (the Commission) has received an application from Goodman & Company N.Y. Ltd. (GCNY or the Filer) for a decision under:
(a) subsection 74(1) of the Act for an exemption from the adviser registration requirement in subsection 25(3) of the Act; and
(b) section 80 of the CFA for an exemption from the adviser registration requirement in subsection 22(1)(b) of the CFA,
with respect to GCNY, and certain individuals (the GCNY Representatives) who act as advising representatives on behalf of GCNY and, at the relevant times, are registered to act as advising representatives on behalf of Goodman & Company, Investment Counsel Ltd. (GCIC), under the Act or the CFA, as applicable (the Requested Relief).
Representations
This decision is based on the following facts represented by the Filer:
1. GCIC is registered as an investment fund manager, portfolio manager and commodity trading manager with the OSC and as a portfolio manager with the securities regulatory authorities of British Columbia, Alberta, Saskatchewan, Manitoba, Quebec, New Brunswick, Nova Scotia and Prince Edward Island. The head office of GCIC is in Toronto, Ontario.
2. GCNY is a direct wholly-owned subsidiary of GCIC and has its head office in Toronto, Ontario. GCNY is not registered under the Act or the CFA. GCNY is registered as an investment adviser with the United States Securities and Exchange Commission.
3. GCIC is the manager of mutual funds and hedge funds, including Dynamic Funds, and provides discretionary portfolio management services to high net worth retail and institutional clients. GCIC is a subsidiary of DundeeWealth Inc. (DundeeWealth), a financial services company which offers a wide range of wealth management solutions through financial advisers and which is a wholly owned subsidiary of The Bank of Nova Scotia.
4. GCNY was established to offer DundeeWealth's investment capabilities to funds domiciled in the U.S. and in other non-Canadian jurisdictions and, through managed accounts, to high net worth retail and institutional clients located in the U.S. and in other non-Canadian jurisdictions.
5. The GCNY Representatives provide portfolio management services in respect of various Canadian-domiciled hedge funds and other funds, as well as Canadian domiciled and non-Canadian domiciled accounts in their capacity as advising representatives of GCIC. GCIC does not advise on any accounts domiciled in the U.S nor does any GCNY Representative, in his or her capacity as an advising representative of GCIC, advise any accounts domiciled in the U.S.
6. It is proposed that the GCNY Representatives also provide portfolio management services in respect of various U.S. and other non-Canadian domiciled funds and U.S. and other non-Canadian domiciled accounts in their capacity as advising representatives of GCNY (the GCNY Non-Canadian Clients).
7. None of the GCNY Representatives will act on behalf of GCNY for a GCNY Non-Canadian Client in the Province of Ontario unless the GCNY Representative is, at the relevant time, registered under the Act as an advising representative of GCIC or under the CFA as an advising representative of GCIC, as applicable, and GCIC in turn is registered as a portfolio manager under the Act or as a commodity trading manager under the CFA, as applicable.
8. GCNY and GCNY Representatives will comply with all registration and other requirements of applicable securities legislation and commodity futures legislation in the jurisdiction of the GCNY Non-Canadian Clients.
9. The GCNY Representatives will be subject to supervision by, and the applicable compliance requirements of, the Filer and are subject to those of GCIC in their capacity as advising representatives of GCIC.
10. GCNY Non-Canadian Clients will not also be clients of GCIC.
11. All GCNY Non-Canadian Clients will be provided with disclosure that explains the relationship between GCNY and GCIC and that GCIC is not responsible for the GCNY Non-Canadian Clients.
12. All GCNY Representatives will have business cards and letterhead which identify them to the GCNY Non-Canadian Clients as working on behalf of GCNY and all communication by the GCNY Representatives with GCNY Non-Canadian Clients will be through GCNY.
13. To avoid client confusion with respect to GCIC, the account documentation, including if necessary account statements, performance reporting, contracts and disclosure documents, of GCNY will clearly identify GCNY as the adviser to the GCNY Non-Canadian Clients.
14. GCNY Non-Canadian Clients will also be advised at the time they enter into an advising relationship with GCNY that if they relocate to a Canadian jurisdiction, their accounts will have to be transferred to GCIC or another portfolio manager or commodity trading manager, as applicable, that is appropriately registered or relying on an exemption from registration in the Canadian jurisdiction.
Order
The Commission is satisfied that it would not be prejudicial to the public interest for it to grant the Requested Relief, and the Commission rules that the Requested Relief is granted provided that:
(a) in acting as an adviser to a GCNY Non-Canadian Client, GCNY, and the GCNY Representatives acting on its behalf, comply with all applicable registration and other requirements of the securities legislation and commodity futures legislation of the jurisdiction of the GCNY Non-Canadian Client;
(b) in acting as an adviser to a GCNY Non-Canadian Client, GCNY acts only through GCNY Representatives;
(c) the Filer and GCIC remain affiliates and GCIC is registered as a portfolio manager under the Act and as a commodity trading manager under the CFA; and
(d) each GCNY Representative, when acting as an adviser to a GCNY Non-Canadian Client on behalf of GCNY, is registered under the Act as an advising representative of GCIC or under the CFA as an advising representative of GCIC, as applicable.