Caldwell Investment Management Ltd. et al.

Headnote

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 registered firm -- James Telfser will be subject to supervision by, and the applicable compliance requirements of, CSL and CIM -- policies in place to handle potential conflicts of interest -- clients advised of relationship between affiliated firms -- Filers exempted from prohibition.

Applicable Legislative Provisions

National Instrument 31-103 Registration Requirements, Exemptions and Ongoing Registrant Obligations, ss. 4.1, 15.1.

July 16, 2012

IN THE MATTER OF

THE SECURITIES LEGISLATION OF

ONTARIO

(the Jurisdiction)

AND

IN THE MATTER OF

CALDWELL INVESTMENT MANAGEMENT LTD. (CIM)

AND

CALDWELL SECURITIES LTD. (CSL)

AND

JAMES TELFSER

(the Filers)

DECISION

Background

The regulator in the Jurisdiction (the Decision Maker) has received an application from the Filers for a decision under the securities legislation of the regulator (the Legislation) for relief from the requirement under paragraph 4.1(1)(b) of National Instrument 31-103 Registration Requirements, Exemptions and Ongoing Registrant Obligations (NI 31-103) to permit James Telfser to be registered as both an associate advising representative of CIM and as a dealing representative of CSL (the Dual Registration) (the Requested Relief).

Interpretation

Terms defined in National Instrument 14-101 Definitions and Multilateral Instrument 11-102 Passport System have the same meaning in this decision unless otherwise defined.

Representations

This decision is based on the following facts represented by the Filers:

1. CSL is registered under NI 31-103 in Ontario, British Columbia, Alberta, Saskatchewan, Manitoba, Nova Scotia, New Brunswick, Newfoundland and Prince Edward Island as an investment dealer, is a member of Investment Industry Regulatory Organization of Canada (IIROC) and has its head office in Ontario.

2. CIM is registered under NI 31-103 in Ontario, British Columbia, Alberta, and Saskatchewan as an adviser in the category of portfolio manager and has its head office in Ontario. CSL and CIM are both wholly owned subsidiaries of Caldwell Financial Ltd.

3. CSL and CIM are not in default of any requirements of securities legislation in any jurisdiction of Canada.

4. James Telfser is currently registered as an associate advising representative in Ontario with CIM and has been performing research analyst and portfolio management duties at CIM.

5. CIM's main business is the provision of discretionary portfolio management services to high net worth retail and institutional clients. CSL's main business is the provision of investment advice to retail clients and stock brokerage services to both institutional and retail clients.

6. There are currently individuals who are dually registered as advising, associate advising and/or dealing representatives of both CIM and CSL, each of whom obtained dual registration before paragraph 4.1(1)(b) of NI 31-103 came into force. CSL and CIM have represented that these employees have been able to serve clients of both firms satisfactorily and that there is no reason to believe that Mr. Telfser cannot perform to the same standard as these other dually registered employees of the firms.

7. CIM and CSL are both wholly-owned subsidiaries of Caldwell Financial Ltd. and, accordingly, the Dual Registration will not give rise to the conflicts of interest present in a similar arrangement involving unrelated, arm's length firms. The interests of CIM and CSL are aligned and therefore the potential for conflicts of interest is remote.

8. There are a number of potential clients of CSL that have expressed strong interest in specifically engaging Mr. Telfser's services through CSL. Furthermore, CIM offers a variety of model portfolios to its clients. Mr. Telfser is involved in the management of some of these model portfolios and the proposed dual registration would allow Mr. Telfser to make these model portfolios available to the clients of CSL.

8. The Filers have in place policies and procedures to address conflicts of interest that may arise as a result of the Dual Registration, and believe that they will be able to appropriately deal with these conflicts.

9. The Dual Registration will be disclosed to clients of CIM and CAIC.

10. In the absence of the Requested Relief, James Telfser would be prohibited under paragraph 4.1(1)(b) of NI 31-103 from acting as a dealing representative of CSL while also registered as an associate advising representative of CIM, even though CSL is an affiliate of CIM.

Decision

The Decision Maker 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 Maker under the Legislation is that the Requested Relief is granted.