Société de gestion privée des Fonds FMOQ inc. and Conseil et investissement fonds FMOQ inc.

Headnote

Relief under paragraph 4.1(1)(b) 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 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 are unlikely to arise because clients of the Filers and the products offered by the Filers differ considerably. The firms have policies in place to handle potential conflicts of interest. 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.

March 23, 2022

IN THE MATTER OF THE SECURITIES LEGISLATION OF QUEBEC AND ONTARIO (the "Jurisdictions") AND IN THE MATTER OF THE PROCESS FOR EXEMPTIVE RELIEF APPLICATIONS IN MULTIPLE JURISDICTIONS AND IN THE MATTER OF SOCIÉTÉ DE GESTION PRIVÉE DES FONDS FMOQ INC. (SGPFF) AND CONSEIL ET INVESTISSEMENT FONDS FMOQ INC. (CIFF) (the "Filers")

DECISION

Background

The securities regulatory authority or regulator in each of the Jurisdictions (the Decision Maker) has received an application from the Filers for a decision under the securities legislation of the Jurisdictions (the Legislation) for relief from the requirement in paragraph 4.1(1)(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 Ms. Annie Labbé to act as registered dealing representative for SGPFF, in addition to her current registration as dealing representative with CIFF (the Exemption Sought).

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

1. the Autorité des marchés financiers (the AMF) is the principal regulator for this application;

2. 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 Nova Scotia; and

3. the decision is the decision of the principal regulator and evidences the decision of the securities regulatory authority or regulator in Ontario.

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:

The Filers

1. SGPFF is a corporation incorporated under the Business Corporations Act (Québec). Its head office is located at 3500 De Maisonneuve West Blvd, Suite 1900, Westmount, Québec, H3Z 3C1.

2. SGPFF offers portfolio management services to its clients comprised mostly of members of the Fédération des Médecins Omnipraticiens du Québec, members of the Association des Optométristes du Québec, members of the overall medical community and their relatives (collectively, the Members) through the use of pooled funds managed by SGPFF. In certain circumstances, pooled funds are offered directly to the Members in the Jurisdictions that qualify as accredited investors pursuant to National Instrument 45-106 Prospectus Exemption (NI 45-106). SGPFF is the fund manager for FMOQ pooled funds that are non-reporting issuers offered pursuant to NI 45-106 and the FMOQ mutual funds offered in accordance with National Instrument 81-101 Mutual Fund Prospectus Disclosure in Québec (NI 81-101) (collectively, the FMOQ Funds).

3. SGPFF is registered in the categories of investment fund manager, portfolio manager, derivatives portfolio manager and exempt market dealer in Québec. It is also registered in the category of exempt market dealer in Ontario.

4. CIFF is a corporation incorporated under the Business Corporations Act (Québec). Its head office is located at 3500 De Maisonneuve West Blvd, Suite 1900, Westmount, Québec, H3Z 3C1.

5. CIFF buys and sells investment funds for the Members located in Québec, and remains the principal distributor of the FMOQ mutual funds. It provides customer service, promotion and development of FMOQ mutual funds as well as other products and services. The FMOQ mutual funds are distributing their securities under a prospectus pursuant to NI 81-101.

6. CIFF is registered in the category of mutual fund dealer in Québec.

7. The principal regulator of both Filers is the AMF.

8. The Filers are affiliates as they are both subsidiaries of Société de Services Financiers Fonds FMOQ inc. a wholly owned subsidiary of the Fédération des médecins omnipraticiens du Québec (FMOQ, and all entities together being the FMOQ Group).

9. The Filers' offices are located at the same address and they share the same back-office functions; however, the Filers have their own respective office space.

10. Both of the Filers also share common officers and directors and have the same Chief Compliance Officer (CCO) and Ultimate Designated Person (UDP). Up until October 20, 2021, the Filers had one employee who was registered as dealing representative (exempt market dealer) of SGPFF and dealing representative (mutual fund dealer) of CIFF. The Filers have been able to deal with conflicts of interests that have arisen due to this arrangement.

11. Neither SGPFF nor CIFF is in default of any requirements of securities legislation in any jurisdiction of Canada.

Ms. Labbé's registration as dealing representative for SGPFF

12. Ms. Labbé is currently registered as dealing representative (mutual fund dealer) in Québec with CIFF. In this role, she sells FMOQ mutual funds to clients of CIFF in Québec.

13. If the Exemption Sought is granted, Ms. Labbé would also act as registered dealing representative (exempt market dealer) on behalf of SGPFF in the Jurisdictions, where Ms. Labbé will sell units of FMOQ pooled funds to clients who are accredited investors. Ms. Labbé will not solicit new clients on behalf of SGPFF in Ontario. Her clients will be clients of CIFF or SGPFF who have moved to Ontario from Québec.

14. From a geographical and business point of view, it would be optimal for the Filers if Ms. Labbé could provide services to clients of SGPFF who move to Ontario. Ms. Labbé has been with the FMOQ Group for five years and has valuable experience and extensive knowledge of the client base and products offered by the FMOQ Group.

15. Ms. Labbé has appropriate proficiency requirements for being registered as dealing representative (exempt market dealer) with SGPFF.

16. SGPFF's clients would benefit from the Exemption Sought as they will have better access to a duly registered dealing representative.

17. Ms. Labbé will have sufficient time to adequately serve both Filers. The CCO and UDP of each Filer will ensure that Ms. Labbé continues to have sufficient time and resources to adequately serve each Filer.

18. The dual registration of Ms. Labbé 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. The interests of the Filers are aligned as: a few of the clients of CIFF are or will also be clients of SGPFF; the Filers will carry out distinct but complementary business lines to fully service the needs of their generally shared clients; and both Filers are affiliates. Both Filers wish to leverage Ms. Labbé's knowledge, expertise and experience for the benefit of their clients and FMOQ Funds. As a result, the potential for conflicts of interest arising from the dual registration of Ms. Labbé is very remote.

19. The Filers have the same 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 Ms. Labbé. In particular, Ms. Labbé will be subject to the supervisory, and the applicable compliance, requirements of each of the Filers. Furthermore, in the rare event that Ms. Labbé was to determine that it would be appropriate to have a client invest in financial products offered by the other Filer, this Filer would, at such time, first inform and get the approval of the CCO, and then notify in writing its client of the relationship between the Filers unless such relationship is described in materials provided to the client in connection with such investment.

20. Ms. Labbé will act fairly, honestly and in good faith and in the best interests of the clients of each Filer.

21. The Filers will be able to appropriately deal with any conflict arising out of the dual registration, as the case may be. The Filers currently share a CCO and a UDP, and they have been able to deal with any potential conflicts of interest.

22. In order to minimize any client confusion, SGPFF, CIFF and Ms. Labbé will disclose the fact that Ms. Labbé is registered with both firms, and the relationship between SGPFF and CIFF will be explained to clients. This disclosure will be made in writing prior to Ms. Labbé providing services to clients of each of the Filers.

23. In the absence of the Exemption Sought, the Filers would be prohibited from permitting Ms. Labbé to act as a dealing representative (mutual funds dealer) of CIFF and as a dealing representative (exempt market dealer) of SGPFF, even though the Filers are affiliates and have controls and compliance procedures in place to deal with Ms. Labbé's dealing activities.

Decision

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

Ms. Labbé is subject to supervision by, and the applicable compliance requirements of, both Filers;

(a) The Chief Compliance Officer and the Ultimate Designated Person of each Filer ensure that Ms. Labbé has sufficient time and resources to adequately serve each Filer and its respective clients;

(b) The Filers each have adequate policies and procedures in place to address any conflicts of interest that may arise as a result of the dual registration of Ms. Labbé and deal appropriately with any such conflicts; and

(c) The relationship between the Filers and the fact that Ms. Labbé is dually registered with both Filers is fully disclosed in writing to each client of the Filers that deal with Ms. Labbé.

French version signed by:

"Éric Jacob"

Superintendent

Client Services and Distribution Oversight

Autorité des marchés financiers