Enriched Investing Incorporated and FirmInvest Asset Management Canada Inc.

Headnote

Exemption from paragraphs 4.1(1)(a) and (b) of National Instrument 31-103 Registration Requirements, Exemptions and Ongoing Registrant Obligations to permit an individual to act as a dealing, advising or associate advising representative of a registered firm while the individual acts as an advising representative, officer, partner or director of another registered firm that is not an affiliate. One registered firm is acquiring the client accounts of another registered firm prior to the latter's winding up and subsequent suspension as a portfolio manager. The filers have valid business reasons for the individuals to be registered with both firms; the individuals will have sufficient time to adequately serve both firms; conflicts of interest are unlikely to arise as one of the firms is winding up; and there are policies and procedures in place to handle any potential conflicts of interest. The firms are exempted from the prohibition in paragraphs 4.1(1)(a) and (b) for a limited time period.

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, 13.4 and 15.1.

February 28, 2022

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 ENRICHED INVESTING INCORPORATED ("Enriched"), FIRMINVEST ASSET MANAGEMENT CANADA INC. ("FirmInvest") AND DAVID RATCLIFFE ("Ratcliffe")

DECISION

Background

The principal regulator in the Jurisdiction (the Decision Maker) has received an application from Enriched and FirmInvest (collectively, the Filers) for a decision under the securities legislation of the Jurisdiction (the Legislation), pursuant to section 15.1 of National Instrument 31-103 Registration Requirements, Exemptions and Ongoing Registrant Obligations (NI 31-103), for an exemption from the restrictions in paragraphs 4.1(1)(a) and (b) of NI 31-103 to permit Ratcliffe to act as an advising representative of Enriched while also acting as an advising representative, director and officer of FirmInvest for a limited period of time following the acquisition of all the client accounts of FirmInvest by Enriched (the Exemption Sought).

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

(a) the Ontario Securities Commission (the OSC) is the principal regulator for this application; and

(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 British Columbia and Quebec.

Interpretation

Terms defined in MI 11-102, NI 31-103 and National Instrument 14-101 Definitions have the same meaning in this decision unless otherwise defined.

Representations

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

Enriched

1. Enriched is a company organized under the laws of Alberta with its head office in Alberta. Enriched is currently registered in the categories of portfolio manager and investment fund manager under the securities legislation of the Jurisdictions.

2. Enriched provides discretionary portfolio management services to its clients.

3. The principal regulator of Enriched is the OSC.

4. Enriched is not in default of any requirement of securities legislation in any jurisdiction of Canada.

FirmInvest

5. FirmInvest is a company organized under the laws of Ontario, with its head office in Ontario. FirmInvest is registered in the categories of portfolio manager and exempt market dealer under the securities legislation of each of the Jurisdictions.

6. The principal regulator of FirmInvest is the OSC.

7. FirmInvest provides discretionary portfolio management services to its clients.

8. Ratcliffe is the sole shareholder of FirmInvest. He is also the firm's president and is registered as its ultimate designated person, chief compliance officer and sole advising representative.

9. On February 25, 2022, FirmInvest, David Ratcliffe and staff of the OSC entered into a settlement agreement in relation to FirmInvest's failure to comply with sections 11.1 and 11.5 of NI 31-103 and Ratcliffe's failure to comply with sections 5.1, 5.2 and 13.3 of NI 31-103 (the Settlement Agreement). As a condition, FirmInvest's registration will be suspended, and immediately thereafter revoked, 60 days after the Settlement Agreement is signed in order to permit an orderly transfer of its clients to a different registered firm (the FirmInvest Suspension Date).

10. Other than the matters set out in the Settlement Agreement, FirmInvest is not in default of any requirement of securities legislation in any jurisdiction of Canada.

The Transaction

11. The Filers are each independently owned and are not affiliates of one another.

12. The application for the Exemption Sought is made in relation to the transfer of all of the client accounts of FirmInvest to Enriched (the Transaction). In connection with the Transaction, Ratcliffe is seeking registration as an advising representative of Enriched under the securities legislation of each of the Jurisdictions.

13. FirmInvest will transfer all of its client accounts to Enriched in or about March 2022 (the Account Transfer Date).

Dual Registration

14. During the period from the Account Transfer Date to the FirmInvest Suspension Date, Enriched and FirmInvest require Ratcliffe to be:

a. an officer, director and advising representative of FirmInvest, to facilitate the orderly wind-up of FirmInvest's registerable business and operations; and

b. an advising representative of Enriched, to provide services in relation to former clients of FirmInvest who will become clients of Enriched that are similar to the services he performed on behalf of FirmInvest.

15. After the Account Transfer Date, Ratcliffe, as FirmInvest's sole director, officer, ultimate designated person and chief compliance officer, will act in such capacity only to comply with regulatory requirements, including working to transfer FirmInvest's client accounts to Enriched or to another registered firm.

16. Ratcliffe will have sufficient time and resources to adequately meet his obligations to each of Enriched and FirmInvest. The chief compliance officer and ultimate designated person of each Filer will ensure that Ratcliffe has sufficient time and resources to adequately serve the respective Filer and its clients.

17. Enriched will ensure that Ratcliffe adheres to any terms and conditions imposed on the registration of FirmInvest.

18. The Filers have in place policies and procedures to address any conflicts of interest that may arise as a result of the dual registration of Ratcliffe. Following the transfer of its client accounts to Enriched, the activities of FirmInvest will be administrative in nature which should result in there being few, if any, conflicts of interest.

19. Ratcliffe will be subject to supervision by, and the applicable compliance requirements of, both Filers.

20. Enriched has compliance and supervisory policies and procedures in place to monitor the conduct of its representatives, including Ratcliffe, and to ensure Enriched can deal appropriately with any conflicts of interest that may arise.

21. Enriched will supervise the activities that Ratcliffe will conduct on behalf of FirmInvest in the same way that it does other outside business activities of its registered individuals, including by holding meetings regularly with him and obtaining regular status reports from him.

22. The relationship of the Filers and the fact that Ratcliffe is dually registered with both Filers will be fully disclosed in writing to clients who deal with Ratcliffe.

23. In the absence of the Exemption Sought, the Filers would be prohibited under paragraphs 4.1(1)(a) and 4.1(1)(b) of NI 31-103 from permitting Ratcliffe to act as an advising representative, director and officer of FirmInvest while also acting as an advising representative of Enriched.

Decision

The Decision Maker is satisfied that the decision meets the test set out in the Legislation for the Decision Maker to make the decision.

The decision of the Decision Maker under the Legislation is that the Exemption Sought is granted on the following conditions:

a. Ratcliffe is subject to the supervision by, and compliance requirements of, both Filers;

b. The chief compliance officer and ultimate designated person of each Filer ensures that Ratcliffe has sufficient time and resources to adequately serve each Filer and its respective clients;

c. Each Filer has adequate policies and procedures in place to address any potential conflicts of interest that may arise as a result of the dual registration of Ratcliffe, and deal appropriately with any such conflicts;

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

e. the Exemption Sought expires on the date on which FirmInvest's registration is revoked.

"Debra Foubert"
Director
Compliance and Registrant Regulation
Ontario Securities Commission

Application File #: 2022/0028