Medical Innovations Management Inc. - s 74(1)

Order

Headnote

B.C. registered investment adviser operating out of Ontario exempted from the adviser registration requirement of the Act in connection with advising an investment fund registered and distributed only in BC provided that the registerable activities of the investment adviser are limited to advising the fund and investment adviser and its officers and employees maintain registration in BC.

Statutes Cited

Securities Act, R.S.O. 1990, c. S.5, as am., ss. 25(1), 74(1).

IN THE MATTER OF

THE SECURITIES ACT (ONTARIO)

R.S.O. 1990, c. S.5, AS AMENDED

AND

IN THE MATTER OF

MEDICAL INNOVATIONS MANAGEMENT INC.

 

ORDER

(Section 74(1))

WHEREAS the Ontario Securities Commission (the OSC) has received an application from Impax Capital Corp. (the Filer) for a decision pursuant to subsection 74(1) of the Securities Act (Ontario) (the Act) that the adviser registration requirement contained in section 25 of the Act shall not apply to each of:

(i) Medical Innovations Management Inc. (MIMI); and

(ii) the officers and employees acting on MIMI's behalf;

in respect of advising BC Medical Innovations (EVCC) Inc. (the Fund) (the Requested Relief).

AND WHEREAS the Filer has represented to the OSC that:

1. The Filer is a corporation incorporated under the laws of Ontario with its head office located in Toronto, Ontario. The Filer controls Impax Funds Management Inc. (IFMI), which is registered under the Act as an adviser in the categories of investment counsel and portfolio manager. The Filer itself is not registered under the Act.

2. MIMI is a corporation incorporated under the laws of Canada with its head office located in Vancouver, B.C.. MIMI is an indirect, wholly-owned subsidiary of MDS Capital Corp. (MDS).

3. MIMI is registered as an adviser with the British Columbia Securities Commission (the BCSC). The registration of MIMI in British Columbia is subject to terms and conditions which limit it to advising "prescribed venture capital corporations" and "prescribed labour-sponsored venture capital corporations" under the Income Tax Act (Canada). MIMI is not registered in any category under the Act.

4. MIMI is the manager and portfolio manager of the Fund. The Fund is an investment fund registered under the Employee Investment Act (British Columbia) and is distributed only in the province of British Columbia.

5. The Filer is proposing to acquire control of MIMI as part of a transaction (the Transaction) whereby the Filer will also acquire control of Medical Discovery Management Corporation (MDMC) from MDS. The Filer has made all required filings or applications with Canadian securities regulators in respect of the Transaction. The Transaction is scheduled to close on or about January 20, 2006 (the Closing).

6. Upon the Filer acquiring control of MIMI, Steven Hawkins will become the sole advising officer of MIMI. Mr. Hawkins resides in Ontario and it is anticipated that he will continue to do so while advising the Fund on behalf of MIMI, whose head office will move to Toronto.

7. Mr. Hawkins is registered under the Act as an advising officer, ultimate responsible person and chief compliance officer for IFMI.

8. After the Filer assumes control of MIMI, the activities of MIMI will be limited to advising the Fund.

9. The Filer considered registering IFMI in British Columbia so that it could take on the roles of manager and portfolio manager of the Fund. However, even if IFMI were able to be registered in British Columbia in time for the Closing, approval of the securityholders of the Fund would be required in order to change the manager and portfolio manager to IFMI. That cannot be accomplished before the Closing, although consideration may be given to doing so at a later date. It is therefore necessary that MIMI continue as manager and portfolio manager of the Fund, if the Closing is to proceed.

10. The BCSC has advised the Filer that it will not approve the change of control of MIMI unless MIMI becomes registered in Ontario in the appropriate categories of adviser or obtains an exemption from the adviser registration requirement in Ontario.

11. Since MIMI will become subject to the adviser registration requirement in Ontario solely because it will engage in the business of advising from a location in Ontario after Closing, its business otherwise being entirely in British Columbia and subject to the regulatory oversight of the BCSC, and the Fund only having assets of approximately $5 million, the relative costs of obtaining and maintaining registration in Ontario would outweigh the benefits of registration.

AND WHEREAS the OSC is satisfied that it would not be prejudicial to the public interest to make this Order.

IT IS HEREBY ORDERED pursuant to section 74(1) the Act that the Requested Relief is hereby granted provided that:

a) the Fund is distributed only in British Columbia;

b) the registerable activities of MIMI are limited to advising the Fund; and

c) MIMI, Mr. Hawkins and any other officers or employees undertaking registerable activity on its behalf are registered with the BCSC in the appropriate categories of registration.

January 20, 2006

"Robert L. Shirriff"

"Paul M. Moore"