Credit Suisse Asset Management, LLC -- s. 80 of the CFA

Order

Headnote

Section 80 of the Commodity Futures Act (Ontario) -- International adviser exempted from the adviser registration requirement in section 22(1)(b) of the CFA where such adviser acts as an adviser in respect of commodity futures contracts or commodity futures options (commodities) for certain institutional investors in Ontario -- Commodities are primarily traded on commodity futures exchanges outside of Canada and primarily cleared outside of Canada.

Terms and conditions on exemption ruling correspond to the relevant terms and conditions on the comparable exemption from the adviser registration requirement available to international advisers in respect of securities set out in section 8.26 of NI 31-103 Registration Requirements and Exemptions -- Exemption also subject to a "sunset clause" condition.

IN THE MATTER OF

THE COMMODITY FUTURES ACT,

R.S.O. 1990, CHAPTER C.20, AS AMENDED

(the CFA)

AND

IN THE MATTER OF

CREDIT SUISSE ASSET MANAGEMENT, LLC

ORDER

(Section 80 of the CFA)

UPON the application (the "Application") of Credit Suisse Asset Management, LLC (the "Applicant") to the Ontario Securities Commission (the "Commission") pursuant to Section 80 of the CFA that the Applicant and its representatives, directors, officers, members and employees acting as on its behalf (collectively, the "Representatives"), be exempt from the registration requirement under paragraph 22(1)(b) of the CFA in respect of engaging in the business of advising "Permitted Clients" as to trading in commodity futures contracts and/or commodity futures options traded on non-Canadian exchanges, subject to certain terms and conditions.

AND UPON considering the Application and the recommendation of staff of the Commission;

AND UPON the Applicant having represented to the Commission that:

1. The Applicant is a limited liability company organized under the laws of the State of Delaware, United States of America. Its head office is located at Eleven Madison Avenue, New York, NY, 10010.

2. The Applicant is not registered in any capacity under the CFA or the Securities Act (Ontario) (the "OSA").

3. The Applicant relies on the "international adviser" exemption (the "International Adviser Exemption") under Section 8.26 of National Instrument 31-103 Registration Requirements and Exemptions ("NI 31-103") in the provinces of Alberta, British Columbia, Manitoba, New Brunswick, Newfoundland and Labrador, Nova Scotia, Ontario, Prince Edward Island, Quebec and Saskatchewan.

4. The Applicant is a specialized portfolio manager that manages investments for institutional investors across multiple strategies and financial instruments. The Applicant is part of the Credit Suisse group of companies, a global institutional securities and investment banking group. As at November 30, 2010, the Applicant and its affiliates had over US$433 billion in assets under management.

5. From time to time, Ontario-resident investors that are "permitted clients" (as defined in Section 1.1 of NI 31-103) ("Permitted Clients") have indicated an interest in engaging the Applicant as a discretionary investment manager for purposes of implementing certain specialized investment strategies.

6. The Applicant seeks to act as a discretionary investment manager on behalf of prospective Ontario-resident clients that are Permitted Clients (the "Permitted Clients"). The proposed advisory services would include the use of specialized investment strategies employing commodity futures contracts and/or commodity futures options traded on non-Canadian exchanges, and the Applicant would not advise in Canada on commodity futures contracts and/or commodity futures options traded on Canadian exchanges unless providing such advice is incidental to its providing advice on commodity futures contracts and/or commodity futures options traded on non-Canadian exchanges (the "Foreign Commodities-Related Advice").

7. The Applicant would be subject to the adviser registration requirement under the CFA in connection with the provision of Foreign Commodities-Related Advice.

8. If the proposed advisory services were strictly limited to securities, the Applicant could rely on the International Adviser Exemption under NI 31-103 and carry out such activities on behalf of Permitted Clients on a basis that would be exempt from the adviser registration requirement under the OSA.

9. The Applicant filed a completed Form 31-103F2 Submission to Jurisdiction and Appointment of Agent for Service with the OSC on April 1, 2010, and relies on the International Adviser Exemption to advise Permitted Clients in Ontario with respect to foreign securities. The Applicant satisfies the prescribed conditions for reliance on the International Adviser Exemption, namely:

(a) the Applicant limits its advisory activities to Permitted Clients and does not advise in Canada on securities of Canadian issuers unless providing such advice is incidental to its providing advice on a foreign security;

(b) the Applicant's head office or principal place of business is in a foreign jurisdiction (the United States);

(c) the Applicant is registered in the United States with the SEC as an investment adviser under the U.S. Advisers Act in a category of registration that permits it to carry on the activities in the United States that registration as an adviser would permit it to carry on in Ontario;

(d) the Applicant engages in the business of an adviser in the United States;

(e) during its most recently completed financial year, not more than 10% of the aggregate consolidated gross revenue of the Applicant, its affiliates and its affiliated partnerships was derived from the portfolio management activities of the Applicant, its affiliates and its affiliated partnerships in Canada; and

(f) before engaging in advisory activities with a Permitted Client, the Applicant notifies the Permitted Client: (i) that the Applicant is not registered in Canada, (ii) that the jurisdiction of residence of the Applicant is located in a foreign jurisdiction, (iii) of the name and address of the Applicant's agent for service of process in Ontario, and (iv) that there may be difficulty enforcing legal rights against the Applicant because it is resident outside Canada and all or substantially all of its assets may be situated outside of Canada.

10. There is currently no exemption from the adviser registration requirement under the CFA that is equivalent to the International Adviser Exemption under NI 31-103. Consequently, in order to provide Foreign Commodities-Related Advice to Permitted Clients, the Applicant would be required to apply for registration as a commodity trading manager in Ontario.

11. The Applicant has submitted, in particular, that it would not be prejudicial to the public interest for the Commission to grant the requested relief as:

(a) the Applicant would only provide Foreign Commodities-Related Advice to Permitted Clients;

(b) Permitted Clients seek to access certain specialized portfolio management services provided by the Applicant, including Foreign Commodities-Related Advice;

(c) the Applicant meets the prescribed conditions to rely on the International Adviser Exemption in connection with the provision of advice to Permitted Clients with respect to non-Canadian securities;

(d) the Applicant seeks the requested Order in order to provide Foreign Commodities-Related Advice to Permitted Clients on terms and conditions that are analogous to the terms and conditions of the International Adviser Exemption; and

(e) the Applicant would meet all of the prescribed conditions of the International Adviser Exemption were such terms and conditions prescribed with respect to the provision of Foreign Commodities-Related Advice.

12. In particular, the Applicant is currently (i) registered with the SEC as an investment adviser under the U.S. Advisers Act, (ii) registered with the CFTC as a commodity trading advisor, and (iii) an approved member of the NFA, and carries on such activities as a business in its home jurisdiction; and the Applicant would provide advice to Permitted Clients on commodity futures contracts and/or commodity futures options traded on non-Canadian exchanges and would not advise in Canada on commodity futures contracts and/or commodity futures options traded on Canadian exchanges unless providing such advice is incidental to its providing advice on commodity futures contracts and/or commodity futures options traded on non-Canadian exchanges;

AND UPON being satisfied that it would not be prejudicial to the public interest for the Commission to grant the exemption requested on the basis of the terms and conditions proposed,

IT IS ORDERED pursuant to Section 80 of the CFA that the Applicant and its Representatives are not subject to the requirements of paragraph 22(1)(b) of the CFA in respect of the provision of Foreign Commodities-Related Advice to Permitted Clients for a period of five years, provided that:

(a) the Applicant will only provide advice to Permitted Clients with respect to commodity futures contracts and/or commodity futures options traded on non-Canadian exchanges, and will not advise in Canada on commodity futures contracts and/or commodity futures options traded on Canadian exchanges unless providing such advice is incidental to its providing advice on commodity futures contracts and/or commodity futures options traded on non-Canadian exchanges;

(b) the Applicant's head office or principal place of business remains in the United States;

(c) the Applicant remains: (i) registered with the SEC as an investment adviser under the U.S. Advisers Act, (ii) registered with the CFTC as a commodity trading advisor, and (iii) an approved member of the NFA;

(d) the Applicant continues to engage in the business of an investment adviser and a commodity trading adviser in the United States;

(e) during any completed financial year, not more than 10% of the aggregate consolidated gross revenue of the Applicant, its affiliates and its affiliated partnerships is derived from the portfolio management activities of the Applicant, its affiliates and its affiliated partnerships in Canada; and

(f) before providing the Foreign Commodities-Related Advice to an Permitted Client, the Applicant notifies the client: (i) that the Applicant is not registered in Canada, (ii) that the jurisdiction of residence of the Applicant is located in a foreign jurisdiction, (iii) of the name and address of the Applicant's agent for service of process in Ontario, and (iv) that there may be difficulty enforcing legal rights against the Applicant because it is resident outside Canada and all or substantially all of its assets may be situated outside of Canada.

Dated this 8th of April, 2011

"Margot C. Howard"
Commissioner
Ontario Securities Commission
 
"Christopher Portner"
Commissioner
Ontario Securities Commission