NCP Northland Capital Partners Inc. and NCP Northland Capital Partners (USA) -- s. 74(1)
Headnote
Trades by U.S. registered broker dealer, an affiliate of Ontario registered investment dealer whose shared premises are located in Ontario, exempted from requirements of paragraph 25(1) of the Act, for trades made to clients that are resident in the U.S.A., where the trade is made by the U.S. dealer (in its own right, or on behalf of clients that are resident in the U.S.) through individuals that are dealing representatives of both the U.S. dealer and the Ontario registrant -- Individuals must be appropriately registered to make the trade on behalf of the Ontario registrant if instead the Ontario registrant were making the trade to an Ontario resident.
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,
R.S.O. 1990, CHAPTER S.5, AS AMENDED
(the Act)
AND
IN THE MATTER OF
NCP NORTHLAND CAPITAL PARTNERS INC.
AND
NCP NORTHLAND CAPITAL PARTNERS (USA) INC.
ORDER
(Subsection 74(1) of the Act)
UPON the application of NCP Northland Capital Partners Inc. (NCP Canada) and NCP Northland Capital Partners (USA) Inc. (NCP USA) to the Ontario Securities Commission (the Commission) for an order, pursuant to subsection 74(1) of the Act, that NCP USA and the individuals who are dealing representatives or the equivalent of NCP USA and who are also registered under the Act to trade on behalf of NCP Canada as dealing representatives of NCP Canada (Dual Representatives) shall not be subject to section 25(1) of the Act where NCP USA and the Dual Representatives act on behalf of NCP USA in respect of certain trades in Ontario with, or on behalf of, clients that are resident in the United States (US Clients);
AND UPON considering the application and the recommendation of staff of the Commission;
AND UPON representation to the Commission that:
1. NCP Canada is incorporated under the laws of the Province of Ontario.
2. NCP Canada's head office is located in Toronto, Ontario.
3. NCP Canada is registered under the Act as a dealer in the category of investment dealer and is a dealer member of the Investment Industry Regulatory Organization of Canada.
4. NCP Canada is not registered under applicable US securities laws to carry on the business of a registered broker dealer in the United States.
5. NCP Canada does not trade in securities with or on behalf of US Clients.
6. NCP USA is an affiliate of NCP Canada.
7. NCP USA is incorporated under the laws of the Province of Ontario and is not registered under the Act.
8. NCP USA and NCP Canada operate out of the same premises in Toronto, Ontario.
9. NCP USA is registered as a broker-dealer under the US Securities Exchange Act of 1934, as amended, and is a member of the Financial Industry Regulatory Authority.
10. The Dual Representatives are, or will be, registered with the Commission as dealing representatives of NCP Canada in order to provide trading services to institutional clients of NCP Canada that are resident or located in the Province of Ontario.
11. The Dual Representatives will act primarily for NCP Canada, but may also act in Ontario on behalf of NCP USA in respect to providing trading services to institutional investors who are resident or located in the United States.
12. NCP USA will not trade in securities with or on behalf of persons or entities who are resident in Canada.
13. NCP Canada currently expects that the amount of revenue derived from US Clients will represent approximately 10% of the revenue generated by Canadian clients.
14. When acting on behalf of NCP USA, the Dual Representatives will not be serving Ontario clients.
15. Where NCP USA trades with or on behalf of US Clients, NCP USA and any Dual Representatives who act on behalf of NCP USA in respect of such trades are subject to and will comply with applicable United States securities laws.
16. NCP USA will file with the Commission such reports as to its trading activities as the Commission may from time to time require.
AND UPON the Commission being satisfied that to do so would not be prejudicial to the public interest;
IT IS RULED, pursuant to subsection 74(1) of the Act, that trades in securities to US Clients, that are made by NCP USA, for itself or on behalf of US Clients, and on behalf of NCP USA by Dual Representatives, shall not be subject to subsection 25(1) of the Act, provided that, at the time of the trade:
(A) NCP Canada is registered under the Act as a dealer in a category that would permit NCP Canada to make the trade, in compliance with subsection 25(1) of the Act, if the trade were instead being made by NCP Canada;
(B) the registration under the Act of the Dual Representative as a dealing representative of NCP Canada would permit the Dual Representative to act on behalf of NCP Canada in respect of the trade, in compliance with subsection 25(1) of the Act, if the trade were instead being made by the Dual Representative on behalf of NCP Canada; and
(C) NCP USA and each of the Dual Representatives is in compliance with any applicable dealer licensing or registration requirements under applicable securities legislation of the United States.
March 11, 2011