Mackie Research Capital Corporation And Jordan Capital Markets Inc
Headnote
Multilateral Instrument 11-102 Passport System -- National Policy 11-203 Process for Exemptive Relief Applications in Multiple Jurisdictions -- National Instrument 33-109 Registration Information (NI 33-109) -- relief from certain filing requirements of NI 33-109 in connection with a bulk transfer of business locations and registered and non-registered individuals pursuant to an amalgamation in accordance with section 3.4 of Companion Policy 33-109CP to NI 33-109.
Applicable Legislative Provisions
Multilateral Instrument 11-102 Passport System.
National Instrument 33-109 Registration Information and Companion Policy 33-109CP.
National Policy 11-203 Process for Exemptive Relief Applications in Multiple Jurisdictions.
June 16, 2015
IN THE MATTER OF THE SECURITIES LEGISLATION OF ONTARIO (the Jurisdiction) AND IN THE MATTER OF THE PROCESS FOR EXEMPTIVE RELIEF APPLICATIONS IN MULTIPLE JURISDICTIONS AND IN THE MATTER OF MACKIE RESEARCH CAPITAL CORPORATION (MRCC) AND JORDAN CAPITAL MARKETS INC. (JCMI) (the Filers)
DECISION
Background
The principal regulator in the Jurisdiction has received an application from the Filers for a decision under the securities legislation of the Jurisdiction of the principal regulator (the Legislation) for relief from the requirements contained in sections 2.2, 2.3, 2.5, 3.2 and 4.2 of National Instrument 33-109 Registration Information (NI 33-109) pursuant to section 7.1 of NI 33-109 to allow the bulk transfer of dealing representatives, permitted individuals and business locations from JCMI to MRCC (the Bulk Transfer), on or about June 19, 2015 (the Transfer Date) in accordance with section 3.4 of the Companion Policy to NI 33-109 (the Exemption Sought).
Under the Process for Exemptive Relief Applications in Multiple Jurisdictions (for a passport application):
(a) the Ontario Securities Commission is the principal regulator for this application; and
(b) the Filers have provided notice that section 4.7(1) of Multilateral Instrument 11-102 Passport System (MI 11-102) is intended to be relied upon in Alberta, British Columbia, Manitoba, Nova Scotia, Ontario, Saskatchewan, the Northwest Territories and Yukon.
Interpretation
Terms defined in National Instrument 14-101 Definitions and MI 11-102 have the same meaning if used in this decision, unless otherwise defined.
Representations
The decision is based on the following facts represented by the Filers:
MRCC
1. MRCC is a corporation amalgamated under the Business Corporations Act (Ontario) with its registered and head office at 199 Bay Street, Suite 4500, Commerce Court West, Toronto, Ontario M5L 1G2.
2. MRCC is a wholly-owned subsidiary of Mackie Research Financial Corporation (MRFC).
3. MRCC is a dealer member of the Investment Industry Regulatory Organization of Canada (IIROC) and is approved by IIROC to carry on business in the categories of securities, options and managed accounts.
4. MRCC is registered as an investment dealer and investment fund manager under the securities legislation of each of the Provinces of Canada as well as the Northwest Territories and Yukon and is registered as a derivatives dealer under the securities legislation of the Province of Québec.
5. MRCC is in compliance with the dealer member rules of IIROC and is not in default of the securities legislation in any of the jurisdictions in which it is registered as an investment dealer, investment fund manager and derivatives dealer.
JCMI
6. JCMI is a corporation incorporated under the Canada Business Corporations Act with its head office at Suite 1920, 1075 West Georgia Street, Vancouver, British Columbia V6E 3C9.
7. JCMI is a wholly-owned subsidiary of MRCC.
8. JCMI is a dealer member of IIROC and is approved by IIROC to carry on business in the categories of securities, options and managed accounts.
9. JCMI is registered as an investment dealer under the securities legislation of each of the Provinces of Alberta, British Columbia, Manitoba, Nova Scotia, Ontario and Saskatchewan as well as the Northwest Territories and Yukon.
10. JCMI is in compliance with the dealer member rules of IIROC and is not in default of the securities legislation in any of the jurisdictions in which it is registered as an investment dealer.
The Transfer of Assets
11. Subject to the necessary approvals, the Filers intend to resolve to dissolve JCMI on the Transfer Date, and in connection therewith, transfer all of the assets of JCMI to its sole shareholder, MRCC.
12. On April 30, 2015, IIROC issued a letter approving MRCC's acquisition of JCMI and the bulk transfer of client accounts from JCMI to MRCC.
13. MRCC's registration will encompass the registration categories, IIROC's approval categories and jurisdictions of both JCMI and MRCC immediately prior to the Transfer Date.
14. Subject to regulatory approvals, effective on the Transfer Date, all of the accounts of the dealing representatives will be transferred from JCMI to MRCC.
15. On the Transfer Date, all JCMI dealing representatives and permitted individuals will be transferred to MRCC on NRD (the Transferred Individuals) in addition to the affected business locations.
16. On the Transfer Date, the dealing representatives transferred to MRCC will carry on the same registerable activities as they conducted with JCMI.
17. Effective on the Transfer Date, MRCC will carry on the same business as the Filers and all of the registerable activities of the Filers will be carried out by MRCC. Subject to obtaining the Exemption Sought, no disruption in the services provided by the Filers to their clients will result further to the transfer of JCMI assets to MRCC.
18. Given the number of Transferred Individuals in connection with the asset transfer, it would be unduly time consuming and difficult to transfer the registration of each of the Transferred Individuals on an individual basis through NRD in accordance with NI 33-109 if the Exemption Sought is not granted.
19. The Bulk Transfer will ensure that the transfer of the affected individuals and business locations occur effective as of the same date, the Transfer Date, in order to ensure that there is no interruption in registration and service to clients.
20. The Exemption Sought complies with the requirements of, and the reasons for, a bulk transfer as set out in section 3.4 of the Companion Policy to NI 33-109 and Appendix C thereto.
21. It would not be prejudicial to the public interest to grant the Exemption Sought.
22. Pursuant to section 14.11 of National Instrument 31-103 Registration Requirements, Exemptions and Ongoing Registrant Obligations, a notice has been sent to all clients of the dealing representatives advising them of their right to close their account. This notice was sent more than 30 days in advance of the Transfer Date.
Decision
The principal regulator is satisfied that the decision meets the test set out in the Legislation for the principal regulator to make the decision.
The decision of the principal regulator under the Legislation is that the Exemption Sought is granted.