Manulife Asset Management (North America) Limited
Headnote
Registration exemption where Ontario firm provides advice exclusively to clients that are (i) resident in the United States or (ii) affiliates of the firm and resident in Hong Kong or Japan. Individuals advising on behalf of the firm are currently registered in Ontario as advising representatives or associate advising representatives of an affiliated firm that is registered in Ontario as a portfolio manager (among other registration categories), and must remain so. Exempted firm and its advising individuals must maintain appropriate registration or licensing in the United States, Hong Kong and Japan or otherwise be permitted under applicable United States, Hong Kong or Japanese legislation to act as an adviser to the clients.
Applicable Ontario Statutory Provision
Securities Act, R.S.O. 1990, c. S.5., as am., ss. 25(3), 74(1).
IN THE MATTER OF
THE SECURITIES ACT, ONTARIO
(the Act)
AND
IN THE MATTER OF
MANULIFE ASSET MANAGEMENT
(NORTH AMERICA) LIMITED
(the Filer)
ORDER
Background
The Ontario Securities Commission (the Commission) has received an application from the Filer for a ruling under subsection 74(1) of the Act for an exemption from the adviser registration requirement in section 25(3) of the Act for:
(a) the Filer, and
(b) any individuals engaging in, or holding themselves out as engaging in, the business of advising others when acting on behalf of the Filer, who are also registered under the Act to act as advising representatives or associate advising representatives of Manulife Asset Management Limited (MAML) (the Advising Representatives),
in respect of advice to persons or companies that are (i) resident in the United States of America (United States) or (ii) affiliates of the Filer and resident in Hong Kong (Special Administrative Region of the People's Republic of China) (Hong Kong) or Japan (Non-Canadian Clients) (the Requested Exemption).
Representations of the Filer
1. The Filer is incorporated under the laws of Canada and is a direct wholly-owned subsidiary of The Manufacturers Life Insurance Company (MLI). Its head office is in Toronto, Ontario.
2. The Filer is registered as an investment adviser under section 203 of the United States Investment Advisers Act of 1940 to carry on the business of an adviser in the United States.
3. The Filer is able to rely on an exemption from registration as an adviser under applicable securities law in Japan for the advisory activities it proposes to provide to the Non-Canadian Clients resident in Japan.
4. In Hong Kong, there is no applicable registration requirement in respect of the advisory activities the Filer proposes to provide to the Non-Canadian Clients resident in Hong Kong.
5. The Filer is not a registrant under the Act.
6. MAML is incorporated under the laws of Ontario. MAML is an indirect, wholly-owned subsidiary of MLI and as such is an affiliate of the Filer. MAML and the Filer share the same head office in Toronto, Ontario.
7. MAML is registered in each province of Canada as an adviser in the category of portfolio manager and as a dealer in the category of exempt market dealer. MAML is also registered in Ontario and Newfoundland and Labrador as a dealer in the category of mutual fund dealer (under certain terms and conditions). Additionally, MAML is registered in Ontario as an adviser in the category of commodity trading manager and as an investment fund manager.
8. The Filer and the Advising Representatives will only advise or act as sub-adviser to Non-Canadian Clients that are:
(a) appropriately registered, licensed or otherwise permitted under applicable securities laws in the United States, Hong Kong or Japan, as applicable, to act as an adviser; or
(b) sophisticated persons or companies that are institutional clients (including an insurance company and a trust) or high net worth clients.
9. The Filer does not advise or act as a sub-adviser for any individuals that do not meet the definition of "accredited investor" in National Instrument 45-106 Prospectus and Registration Exemptions.
10. The Filer does not act as an adviser to any person or company that is resident in a jurisdiction of Canada and is not, and will not be, held out in a jurisdiction of Canada as being engaged in any advising activities.
11. Clients of the Filer will not be clients of MAML.
12. The Filer and the Advising Representatives will act as advisers or sub-advisers to the Non-Canadian Clients out of the Filer's head office in Toronto.
13. The Filer and the Advising Representatives will comply with all registration and other requirements of applicable securities laws of the United States, Hong Kong and Japan in respect of advising Non-Canadian Clients.
14. None of the Advising Representatives will act as an adviser to a Non-Canadian Client unless the Advising Representative is an advising representative or associate advising representative of MAML.
15. All Non-Canadian Clients of the Filer will enter into an investment management agreement or similar documentation with the Filer, at which time the Non-Canadian Clients will also receive disclosure that explains the relationship between the Filer and MAML.
16. To avoid client confusion with respect to MAML or any other affiliate, the investment management agreement or similar documentation, account statements, performance reporting, contracts and disclosure documents of the Filer will clearly identify the Filer as the adviser to the Non-Canadian Clients. In addition, a dedicated relationship manager is assigned to the Non-Canadian Clients and is the primary contact person for the Non-Canadian Clients on behalf of the Filer.
17. Non-Canadian Clients will be advised at the time they enter into an investment management agreement or similar documentation with the Filer, and periodically thereafter, that if they relocate to a jurisdiction of Canada their accounts will have to be transferred to MAML or another adviser that is appropriately registered, or relying on an exemption from registration, in that jurisdiction of Canada.
18. Neither the Filer, nor any individual acting on its behalf, will act as an adviser to persons or companies resident in Ontario unless they are appropriately registered, or relying on an exemption from registration, under Ontario securities law.
19. The Filer is, to the best of its knowledge, not in default under any requirements under Ontario securities law.
Order
The Commission, being satisfied that it would not be prejudicial to the public interest for it to grant the Requested Exemption, rules that the Requested Exemption is granted provided that:
(a) in acting as an adviser to the Non-Canadian Clients, the Filer acts only through the Advising Representatives;
(b) the Filer and each of the Advising Representatives is appropriately registered, licensed or otherwise permitted to act as an adviser to the Non-Canadian Clients under applicable laws of the United States, Hong Kong and Japan;
(c) the Filer and MAML remain affiliates and MAML remains a registrant; and
(d) each of the Advising Representatives maintains registration under the Act as an advising representative or associate advising representative of MAML.
October 28, 2011