Hartford Investment Management Company -- s. 74(1)

Headnote

Application to the Ontario Securities Commission for a ruling pursuant to subsection 74(1) of the Securities Act (Ontario) (the Act) for a ruling that the Applicant be exempted from the adviser registration requirements in subsection 25(3) of the Act. The Applicant will provide advice to affiliated insurance companies in Ontario only so long as that affiliate remains an affiliate of the Applicant.

Applicable Legislative Provisions

Securities Act, R.S.O. 1990, c. S.5, as am., ss. 25(3), 74(1).

IN THE MATTER OF

THE SECURITIES ACT,

R.S.O. 1990, c. S.5, AS AMENDED

(THE ACT)

AND

IN THE MATTER OF

HARTFORD INVESTMENT MANAGEMENT COMPANY

RULING

(Subsection 74(1) of the Act)

UPON the Application (the Application) of Hartford Investment Management Company (the Applicant) to the Ontario Securities Commission (the Commission) for a ruling pursuant to subsection 74(1) of the Act that the Applicant be exempted from the adviser registration requirements in subsection 25(3) of the Act;

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

AND UPON the Applicant having represented to the Commission as follows:

1. The Applicant is a corporation existing under the laws of the State of Delaware, based in Hartford, Connecticut and is registered as an adviser with the U.S. Securities and Exchange Commission pursuant to the U.S. Investment Advisers Act of 1940. The Applicant does not have an office or employees in Canada.

2. The Applicant provides investment advice and portfolio management services to investment companies, employee benefit plans, insurance companies and institutional accounts and, as of December 31, 2011, had assets under management of approximately $165 billion USD.

3. The Applicant is part of a corporate group of financial companies headquartered in the United States known as 'The Hartford'. The Applicant is a sister company of both Hartford Life Insurance Company and Hartford Fire Insurance Company (collectively, the Insurance Companies), which are both U.S.-incorporated insurance companies that carry on business in Canada as federally licensed insurance companies with their Canadian head offices located in Ontario. The Applicant and the Insurance Companies are indirect subsidiaries of The Hartford Financial Services Group Inc. Accordingly, each of the Insurance Companies is an affiliate of the Applicant, as defined in the Act.

4. The Applicant wishes to provide investment advice and portfolio management services to the Insurance Companies, and the Insurance Companies wish to retain the Applicant to provide such investment advice and portfolio management services with respect to the portfolio assets of the Insurance Companies maintained in respect of their respective Canadian businesses. However, the Applicant wishes to provide such advice and services on a basis that would not require registration under the Act.

5. In the proposed advisory relationship between the Applicant and its affiliated Insurance Companies, the Applicant would be providing investment advice and portfolio management services almost exclusively with respect to Canadian securities (being the investment objectives of the Canadian portfolios of the Insurance Companies), rather than with respect to non-Canadian securities.

6. There is no requirement for employees of a corporation to be registered as advisers under the Act if the employees provide investment advice to their corporate employers with respect to the portfolio assets of such corporate employers. The Insurance Companies do not currently employ, nor do they wish to hire, individuals to provide investment advice with respect to their Canadian portfolio assets, but rather the Insurance Companies have decided to outsource the adviser function to the Applicant which is affiliated with the Insurance Companies. Outsourcing the investment function is permitted under the Canadian federal insurance company legislation.

7. The Canadian portfolio assets of the Insurance Companies that would be managed by the Applicant are owned by each of the respective Insurance Companies itself and there are no external stakeholders (such as, for example, holders of variable annuity contracts or segregated funds/separate accounts for policyholders) that have any direct interest in the performance of such portfolios.

8. Accordingly, there are no stakeholders in Ontario or elsewhere other than the Insurance Companies and their shareholders that will be directly affected by the results of the investment advice to be provided by the Applicant and, as such, it would not be prejudicial to the public interest to grant the relief requested by the Applicant.

9. Subsection 74(1) of the Act provides that an order may be issued subject to terms and conditions as the Commission may consider necessary.

AND UPON the Commission being satisfied that to do so would not be prejudicial to the public interest;

IT IS RULED, pursuant to subsection 74(1) of the Act, that the Applicant is exempt from the adviser registration requirements of subsection 25(3) of the Act in respect of it acting as an adviser, provided that:

1. the Applicant provides investment advice and portfolio management services in Ontario only to its affiliates that are licensed or otherwise duly permitted or authorized to carry on business as an insurance company in Canada; and

2. with respect to any particular affiliate, the investment advice and portfolio management services are provided only as long as that affiliate remains an "affiliate" of the Applicant, as defined in the Act.

May 29, 2012