PGM Global Inc. and PGM Global Asset Management Inc.

Decision

Headnote

Under paragraph 4.1(1) of National Instrument 31-103 Registration Requirements, Exemptions and Ongoing Registrant Obligations, a registered firm must not permit an individual to act as a dealing, advising or associate advising representative of the registered firm if the individual acts as an officer, partner or director of another firm registered in any jurisdiction of Canada that is not an affiliate of the first-mentioned registered firm or if the individual is registered as a dealing, advising or associate advising representative of another firm registered in any jurisdiction of Canada. The individual will have sufficient time to adequately serve both firms. Conflicts of interest could arise, but the firms will address material conflicts of interest in the best interest of clients. The firms have policies and procedures in place to address material conflicts of interest that may arise as a result of the dual registration in the best interest of clients. The firms are exempted from the prohibition.

Applicable Legislative Provisions

Multilateral Instrument 11-102 Passport System, s. 4.7.

National Instrument 31-103 Registration Requirements, Exemptions and Ongoing Registrant Obligations, ss. 4.1 and 15.1.

COURTESY TRANSLATION

March 11, 2025

IN THE MATTER OF
THE SECURITIES LEGISLATION OF
QUÉBEC AND ONTARIO
(the "Jurisdictions")

AND

IN THE MATTER OF
THE PROCESS FOR EXEMPTIVE RELIEF APPLICATIONS
IN MULTIPLE JURISDICTIONS

AND

IN THE MATTER OF
PGM GLOBAL INC.
("PGM")
AND
PGM GLOBAL ASSET MANAGEMENT INC.
("PGMGAM")
(collectively, the "Filers")

DECISION

Background

The securities regulatory authority or regulator in each of the Jurisdictions (the "Decision Maker") has received from the Filers an application for a decision under the securities legislation of the Jurisdictions (the "Legislation") for an exemption from the restrictions set out in paragraphs 4.1(1)(a) and (b) of National Instrument 31-103 Registration Requirements, Exemptions and Ongoing Registrant Obligations ("NI 31-103"), pursuant to section 15.1 of NI 31-103, to permit Mario Choueiri (the "Representative") to be registered as an advising representative of PGMGAM under its pending portfolio manager registration, while acting as a dealing representative and salesperson, as well as being a director of PGM (the "Exemption Sought").

The Principal Regulator has also received from the Filers a request under the derivatives legislation of Québec for an exemption from the restrictions set out in paragraphs 4.1(1)(a) and (b) of NI 31- 103, which applies pursuant to section 11.1 of the Derivatives Regulation (Québec), CQLR, c. I-14.01, r.1 in accordance with section 86 of the Derivatives Act (Québec), CQLR, c. I-14.01, to allow the Representative to be registered as an advising representative of PGMGAM while being a derivatives dealing representative of PGM (the "Exemption Sought for Derivatives").

Under the Process for Exemptive Relief Applications in Multiple Jurisdictions (for a dual application):

(a) the Autorité des marchés financiers is the principal regulator for this application;

(b) the Filers have provided notice that subsection 4.7(1) of Multilateral Instrument 11-102 Passport System ("MI 11-102") is intended to be relied upon in Alberta, British Columbia, Manitoba, New Brunswick, Newfoundland and Labrador, Nova Scotia, Prince Edward Island and Saskatchewan;

(c) the decision regarding the Exemption Sought is the decision of the principal regulator and evidences the decision of the securities regulatory authority or regulator in Ontario; and

(d) the decision regarding the Exemption Sought for Derivatives is the decision of the principal regulator.

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

This decision is based on the following facts represented by the Filers:

PGMGAM

1. PGMGAM is a corporation incorporated under the Canada Business Corporations Act.

2. PGMGAM's head office is located at 1010 de la Gauchetière West Street, Suite 2010, Montréal, Québec, H3B 2N2.

3. PGMGAM is a subsidiary of PGM Global Holdings Inc.

4. PGMGAM is not currently registered under the securities legislation of any jurisdiction of Canada.

5. PGMGAM has submitted on July 5, 2024 an application to become registered as investment fund manager and portfolio manager in Québec and Ontario.

6. PGMGAM is not in default of any requirements of securities legislation in any jurisdiction of Canada.

PGM

7. PGM is a corporation incorporated under the Canada Business Corporations Act.

8. PGM's head office is located at 1010 de la Gauchetière West Street, Suite 2010, Montréal, Québec, H3B 2N2.

9. PGM is a subsidiary of PGM Global Holdings Inc. and is therefore an affiliate of PGMGAM.

10. PGM is registered (i) in the category of investment dealer in Alberta, British Columbia, Manitoba, New Brunswick, Newfoundland and Labrador, Nova Scotia, Ontario, Prince Edward Island, Québec and Saskatchewan; (ii) as a derivatives dealer in Québec; (iii) as a dealer (futures commission merchant) in Manitoba; and (iv) as a futures commission merchant in Ontario.

11. PGM is a member of the Canadian Investment Regulatory Organization ("CIRO") and provides the full range of dealer services that CIRO member firms are authorized to provide to institutional clients.

12. PGM is not in default of any requirements of securities or derivatives legislation in any jurisdiction of Canada.

The Representative's registration as an advising representative for PGMGAM

13. The Representative is currently registered as a dealing representative (investment dealer) in Alberta, British Columbia, Manitoba, New Brunswick, Newfoundland and Labrador, Nova Scotia, Ontario, Prince Edward Island, Québec and Saskatchewan, as a salesperson (dealer (futures commission merchant)) in Manitoba, as a salesperson (futures commission merchant) in Ontario and as a derivatives dealing representative (derivatives dealer) in Québec for PGM.

14. The Representative is not in default of any requirements of securities or derivatives legislation in any jurisdiction of Canada.

15. If the Exemption Sought and the Exemption Sought for Derivatives are granted, the Representative would act as registered advising representative in Québec and Ontario for PGMGAM.

16. Certain clients and prospective clients of PGM have manifested their interest for PGM to provide them additional services as an investment fund manager and as a portfolio manager. Consequently, PGM Global Holdings Inc., as a shareholder of PGM, has decided to create a subsidiary and affiliate of PGM, PGMGAM, to offer these services.

17. As an investment fund manager, PGMGAM will create and direct the business, operations and affairs of pooled funds that meet the specific needs of their clients.

18. As a portfolio manager, PGMGAM will provide discretionary portfolio management services to clients through managed accounts, and as a portfolio manager for the assets of the future funds to be created.

19. The services of PGM and PGMGAM will be complementary, since they will allow their clients to obtain the full range of asset management services, in addition to having access to financial products created specifically to meet their needs.

20. The Exemption Sought and the Exemption Sought for Derivatives would allow the Representative to continue serving the existing clients of PGM who will require the additional services to be offered by PGMGAM.

21. PGMGAM's clients would benefit from the Exemption Sought and the Exemption Sought for Derivatives as they will have better access to a duly registered advising representative.

22. The interests of the Filers are aligned as a significant number of the clients of PGM are or will also be clients of PGMGAM; as the Filers will carry out distinct but complementary business lines to fully service the needs of their generally shared clients, and as both Filers are affiliates. As a result, the potential for conflicts of interest arising from the dual registration of the Representative is very remote.

23. The dual registration of the Representative is less likely to give rise to the conflicts of interest that may be present in a similar arrangement involving unrelated, arm's length firms.

24. The Representative will have sufficient time to adequately serve both Filers. The management teams of the Filers will ensure that the Representative continues to have sufficient time to adequately serve each Filer and will mitigate the risk of conflicts of interest.

25. The Filers have in place policies and procedures to address any material conflicts of interest that may arise as a result of the dual registration of the Representative in the best interest of clients.

26. The Filers will have the same chief compliance officer (the "CCO") and appropriate compliance and supervisory policies and procedures in place to monitor the conduct of its registered individuals, including any material conflicts of interest that may arise as a result of the dual registration of the Representative. In particular, the Representative will be subject to the supervisory, and the applicable compliance, requirements of each of the Filers.

27. The Filers will be able to appropriately deal with any conflict of interest arising out of the dual registration, as the case may be.

28. The relationship between the Filers and the fact that the Representative is dually registered with the Filers will be fully disclosed in writing to clients and prospective clients of each Filer that deal with the Representative.

29. In the absence of the Exemption Sought and the Exemption Sought for Derivatives, the Filers would be prohibited from permitting the Representative to be registered as a dealing representative, derivatives dealing representative, salesperson, and director of PGM and an advising representative of PGMGAM.

30. The Representative will act in the best interests of all clients of each Filer and will deal fairly, honestly and in good faith with clients of each Filer.

Decision

Exemption Sought

Each of the Decision Makers is satisfied that the decision meets the test set out in the Legislation.

The decision of the Decision Makers under the Legislation is that the Exemption Sought is granted, provided that:

(a) The Representative is subject to supervision by, and the applicable compliance requirements of, both Filers;

(b) The CCO and ultimate designated person of each Filer ensure that the Representative has sufficient time and resources to adequately service each Filer and its respective clients;

(c) The Filers each have adequate policies and procedures in place to address material conflicts of interest that may arise as a result of the dual registration of the Representative in the best interest of clients; and

(d) The relationship between the Filers and the fact that the Representative is dually registered with both of them is fully disclosed in writing to clients and prospective clients of each of them that deal with the Representative.

Exemption Sought for Derivatives

The principal regulator in respect of the Exemption Sought for Derivatives is satisfied that the decision meets the test set out in the derivatives legislation of Québec.

The decision of the principal regulator under the derivatives legislation is that the Exemption Sought for Derivatives is granted, subject to the same conditions as the Exemption Sought.

French version signed by:

"Kim Lachapelle"
Superintendent, Client Services and Financial Education
Autorité des marchés financiers

OSC File #: 2024/0462