RBC Global Asset Management Inc.

Decision

Headnote

National Policy 11-203 Process for Exemptive Relief Applications in Multiple Jurisdictions -- Firm registered in the categories of Portfolio Manager, Exempt Market Dealer, Commodity Trading Manager, and Investment Fund Manager with separate private client and institutional operating divisions exempted from the requirement to register an individual as an ultimate designated person (UDP) and a chief compliance officer (CCO) -- permitted to register two UDPs and two CCOs, one for each operating division.

Applicable Legislative Provisions

National Instrument 31-103 Registration Requirements and Exemptions, ss.11.2, 11.3.

March 18, 2011

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

RBC GLOBAL ASSET MANAGEMENT INC.

(the Filer)

DECISION

Background

The principal regulator in the Jurisdiction has received an application from the Filer for a decision under the securities legislation of the Jurisdiction (the Legislation) for an exemption from the requirement contained in section 11.2 of National Instrument 31-103 Registration Requirements and Exemptions (NI 31-103) to designate an individual to be the ultimate designated person (UDP) and the requirement contained in section 11.3 of NI 31-103 to designate an individual to be the chief compliance officer (CCO) and instead be permitted to designate and register two individuals as UDP and two individuals as CCO in respect of two distinct lines of securities business of the Filer (the Exemption Sought).

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

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

(b) the Filer has provided notice that subsection 4.7(1) of Multilateral Instrument 11-102 Passport System (MI 11-102) is intended to be relied upon in all of the jurisdictions in Canada outside Ontario (the Non-Principal Jurisdictions, and together with the Jurisdiction, the Jurisdictions).

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 Filer:

1. The Filer is registered under the Legislation in each of the Jurisdictions as an adviser in the category of portfolio manager. The Filer is also registered in Ontario as a dealer in the category of exempt market dealer and will become registered as an investment fund manager.

2. The head office of the Filer is located in Ontario.

3. The Filer is not, to the best of its knowledge, in default of any requirements of securities legislation in any of the Jurisdictions.

4. The Filer's business structure is organized as follows:

(a) The Filer has two distinct lines of securities business which are based on the nature of the Filer's clients (each, a Division).

(b) One business line within the Filer's operations is referred to as the Institutional Asset Management Business (the Institutional Division) which provides a broad range of investment management and investment counseling services to institutional clients.

(c) The other business line within the Filer's operations is referred to as the Private Client Business (the Private Client Division) which provides a broad range of investment management and investment counseling services to individual high net worth clients.

(d) The Private Client Division and the Institutional Division each have separate and distinct senior management structures. Although they are part of the same corporate entity, each Division is functionally a stand-alone operation within the Filer's operations.

(e) The Private Client Division carries on business under the brand name "RBC Phillips, Hager & North Investment Counsel" as it is operated as part of the private client business run out of RBC Phillips, Hager & North Investment Counsel Inc., a separate affiliated entity that is registered as an adviser under the Legislation in each of the Jurisdictions in the category of portfolio manager.

(f) Although carrying on business under the same brand name operating under the same management, the Private Client Division has not been merged into the legal entity RBC Phillips, Hager & North Investment Counsel Inc. due to operational and technological complexities involved with transferring direct accounts from the Filer to RBC Phillips, Hager & North Investment Counsel Inc., including dealing with custodial arrangements and record keeping systems.

5. Currently, there is one UDP responsible for both the Private Client Division and the Institutional Division. The current UDP of the Filer holds the title of Chief Executive Officer (CEO).

6. The Filer proposes to keep its current UDP, John Montalbano (the Current UDP), for the Institutional Division and appoint a new UDP for its Private Client Division (the Proposed UDP). The Proposed UDP of the Private Client Division will be Vijay Parmar, the current President and UDP of RBC Phillips, Hager & North Investment Counsel Inc. The current UDP and the Proposed UDP are the most senior management of each Division. The Proposed UDP is an officer of the Filer.

7. The UDP of each of the Institutional Division and the Private Client Division (each, a Division Head) while having different titles, has the role that is the equivalent of CEO in respect of each Division for which they are responsible and are the senior and final decision maker for each of their respective Divisions. This means that each Division Head fulfills the following role for his respective Division:

(a) runs the Division,

(b) has accountability for the operations and financial performance of the Division,

(c) provides clear leadership and sets the tone at the top for the Division,

(d) is the person that the executive management within the business lines reports to,

(e) is responsible for the objectives, strategy and plans, and the implementation of these, for the Division,

(f) has accountability for reporting to the Board of Directors with respect to the Division, and

(g) is responsible for the Division's organizational structure and succession planning.

8. There is no line of reporting between the UDP of the Institutional Division and the UDP of the Private Client Division. Each UDP has, or will have, direct access to the Filer's Board of Directors.

9. Currently, there is one CCO responsible for both of the Institutional Division and the Private Client Division.

10. The Filer proposes to keep its current CCO, Larry Neilsen for the Institutional Division and will appoint a new CCO for its Private Client Division(the Proposed CCO). The Proposed CCO for the Private Client Division will be Annica Karlsson, the current CCO of RBC Phillips, Hager & North Investment Counsel Inc. The Proposed CCO will be appointed as an officer of the Filer.

11. The CCO for each Division will have direct access to, the Filer's Board of Directors.

UDP Requirement

12. NI 31-103 was implemented on September 28, 2009 (the Implementation Date).

13. Under section 11.2 of NI 31-103, a registered firm is required to designate an individual to be the UDP (the UDP Requirement) and the UDP must be (i) the chief executive officer, (ii) an officer in charge of a division of a registered firm, if the activity that requires a firm to register occurs only in the division; or (iii) an individual acting in a capacity similar to that of an officer described (i) or (ii).

14. Prior to the Implementation Date, there was no requirement under the securities legislation of the Jurisdictions that a portfolio manager or an exempt market dealer designate an individual to be UDP.

15. Designating only one of the Division Heads for purposes of satisfying the UDP Requirement would not be consistent with the policy objectives the Legislation is intended to achieve because the Private Client Division and the Institutional Division are independent operations with separate and distinct senior management structures of which the Current UDP and the Proposed UDP are effectively the CEO of their respective Division.

CCO Requirement

16. Under subsection 11.3(1) of NI 31-103, a registered firm is required to designate an individual to be the CCO (the CCO Requirement).

17. Prior to the Implementation Date, there was a requirement under the securities legislation of many of the Jurisdictions to designate a registered partner or officer as the "compliance officer" who was responsible for discharging the obligations of the registered firm under the applicable securities legislation.

18. In section 5.2 of Companion Policy 31-103CP Registration Requirements and Exemptions indicates that:

"Firms must designate one CCO. However, in large firms, the scale and kind of activities carried out by different operating divisions may warrant the designation of more than one CCO. We will consider applications, on a case-by-case basis, for different individuals to act as the CCO of the firm's operating divisions."

19. Designating only one CCO for purposes of satisfying the CCO Requirement would not be consistent with the policy objectives it is intended to achieve because the Institutional Division and the Private Client Division are independent operations that are distinct from one another in kind and conducted on a very large scale.

Decision

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

The decision of the principal regulator under the Legislation is that the Exemption Sought is granted, provided that:

(a) each Division shall have its own UDP, who shall be its Division Head;

(b) each UDP fulfils the responsibilities set out in section 5.1 of NI 31-103, or any successor provision, in respect of the business lines of the Filer for which he or she is appointed as UDP;

(c) the Filer permits each UDP to directly access the Filer's board of directors, or individuals acting in a similar capacity for the Filer, at such times as each UDP may consider necessary or advisable in view of his or her responsibilities; and

(d) each Division shall have its own CCO.

"Susan Silma"
Director,
Compliance and Registrant Regulation