Credit Suisse Securities (Canada), Inc. and Credit Suisse Securities (USA) LLC

Decision

Headnote

National Policy 11-203 Process for Exemptive Relief Applications in Multiple Jurisdictions -- subsection 4.1(1)(b) of National Instrument 31-103 Registration Requirements and Exemptions and Ongoing Registrant Obligations -- a registered firm must not permit an individual to act as a dealing representative of the registered firm if the individual is registered as a dealing representative of another registered firm -- filers are affiliated entities -- Canadian institutional clients wish to have accounts at both registered firms for tax reasons and wish to use the same dealing representative to deal with all accounts -- policies in place to handle potential conflicts of interest -- relief is time limited to reflect the foreign broker-dealer consultation process -- filers exempted from 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, 15.1

September 12, 2012

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

CREDIT SUISSE SECURITIES (CANADA), INC.

(CSSC)

AND

CREDIT SUISSE SECURITIES (USA) LLC

(CSSU and, together with CSSC, the Filers)

DECISION

Background

The principal regulator in the Jurisdiction has received an application from the Filers for a decision under the securities legislation of the Jurisdiction (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 up to twenty (20) of CSSU's registered dealing representatives, at any one time, to be registered with CSSC and to act as dealing representatives of CSSC (the Dual Registration).

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,

(b) the Filers have provided notice that section 4.7(1) of Multilateral Instrument 11-102 Passport System (MI 11-102) is intended to be relied upon in Alberta, New Brunswick, Newfoundland and Labrador, Nova Scotia, Prince Edward Island, Québec, Saskatchewan, the Northwest Territories, Nunavut Territory, and the Yukon Territory (with Ontario, the Jurisdictions).

Interpretation

Terms defined in MI 11-102 and National Instrument 14-101 Definitions 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:

1. CSSC is a corporation formed under the laws of Ontario, and its head office is located at 1 First Canadian Place, Suite 2900, Toronto, Ontario, M5X 1C9.

2. CSSC is registered as an investment dealer in each of the Jurisdictions and is a member of the Investment Industry Regulatory Organization of Canada (IIROC). It is also a futures commission merchant in Ontario and a derivatives dealer in Quebec. CSSC is a participating organization or member of the Toronto Stock Exchange, TSX Venture Exchange and Montreal Exchange and other electronic markets. CSSC is a member of the Canadian Derivatives Clearing Corporation.

3. CSSC has restricted its investment dealer registration to only institutional customers as defined under IIROC Rule 2700.

4. CSSC does not conduct business activities outside of Canada, is not a member of any foreign marketplaces, is not a participant in any foreign clearing or depository organizations, and does not have the ability to settle trades in foreign securities that are not listed on a Canadian marketplace.

5. CSSU is a limited liability corporation incorporated under the laws of the State of Delaware, and its head office is located at 11 Madison Avenue, New York, NY 10010.

6. CSSU is registered as a broker-dealer and investment adviser with the United States (U.S.) Securities and Exchange Commission, and is a member of the Financial Industry Regulatory Authority. CSSU is a member of major securities exchanges, including the NASDAQ OMX, the Chicago Stock Exchange, NYSE Euronext, and the Philadelphia Stock Exchange.

7. CSSU is registered as a Futures Commission Merchant with the U.S. Commodity Futures Trading Commission, and is a member of the National Futures Association.

8. CSSU is a Foreign Approved Participant of the Montreal Exchange and a Trading Participant of ICE Futures Canada, Inc. CSSU is also a member of the CME Group (including the Chicago Board of Trade), ICE Futures U.S., Inc., and other principal U.S. commodity exchanges, and trades through affiliated or unaffiliated member firms on all other exchanges, including exchanges in Canada, France, Italy, Japan, Singapore, Spain, Taiwan, Mexico, Korea and the United Kingdom.

9. CSSU is registered as an exempt market dealer (EMD) in British Columbia, Alberta, Saskatchewan, Manitoba, Ontario, Québec, Newfoundland & Labrador, New Brunswick, Nova Scotia and Prince Edward Island.

10. CSSU also relies on the international dealer exemption under section 8.18 of NI 31-103 and the international adviser exemption under section 8.26 of NI 31-103 in Alberta, Saskatchewan, Ontario, Québec, Newfoundland & Labrador, New Brunswick, Nova Scotia and Prince Edward Island.

11. CSSU provides a variety of capital raising, investment banking, market making, brokerage, and advisory services, including fixed income and equity sales and research, commodities trading, foreign exchange trading, emerging markets activities, securities lending, investment banking and derivatives dealing for governments, corporate and financial institutions. CSSU also conducts proprietary trading activities.

12. CSSU relies on CSSC to access, and trade on, Canadian marketplaces.

13. The Filers are indirect wholly owned subsidiaries of Credit Suisse Group AG, a Swiss corporation. The Filers are affiliates and each provides different trading services.

14. The Filers are subject to the restrictions and requirements in Part 13 of NI 31-103 regarding conflict of interest matters.

15. The Filers are not, to the best of their knowledge, in default of any requirement of securities legislation in any of the Jurisdictions.

16. The Filers have valid business reasons for seeking the Dual Registration. CSSU has relationships with Canadian institutional clients that would like to conduct business with CSSC and hold their assets in Canada. It is costly for Canadian institutional clients to hold Canadian assets in the U.S. due to the treatment of taxes on Canadian dividends. The Dual Registration would permit the Filers to continue servicing their respective clients and also allow the clients to maintain their relationships with the Filers.

17. Institutional customers who conduct business with both CSSU and CSSC would have distinct and separate accounts with the two firms. Account opening documents, trade confirmations and monthly statements are clearly marked to identify the particular firm with which the institutional customer is dealing in respect of any particular trading or other business activity.

18. Institutional customers will be made aware that their accounts with CSSC are subject to Canada Investor Protection Fund coverage and that their accounts with CSSU are subject to Securities Investor Protection Corporation coverage.

19. The Filers have policies and procedures in place to address material 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.

20. The Filers have compliance and supervisory policies and procedures in place to monitor the conduct of their respective representatives. The representatives of CSSU who will act under the Dual Registration will be subject to supervision by, and the applicable compliance requirements of, each of the Filers.

21. All representatives of CSSU who will act under the Dual Registration are licensed to act in a dealing capacity with CSSU, do not require any exemptions from the individual registration requirements under NI 31-103 or the Registered Representative requirements under the IIROC rules and will be registered as dealing representatives of CSSU and CSSC, as applicable.

22. The representatives of CSSU would be registered with CSSC, an IIROC dealer member, and be subject to IIROC regulations.

23. The representatives of CSSU who will act under the Dual Registration will have sufficient time to adequately serve both firms.

24. The trading services provided to clients by the representatives acting under the Dual Registration in their capacity with CSSC will not interfere with their duties or responsibilities on behalf of CSSU.

25. The trading services provided to clients by the representatives acting under the Dual Registration in their capacity with CSSU will not interfere with their duties or responsibilities on behalf of CSSC.

26. The Dual Registration of the representatives will not hinder CSSU or CSSC in complying with the conditions of registration applicable to them.

27. The Filers will disclose the Dual Registration to their clients and have provided non-resident disclosure as required under section 14.5 of NI 31-103.

28. IIROC Rule 18.14 permits registered representatives or investment representatives to have, and continue in, another gainful occupation provided the conditions outlined in IIROC Rule 18.14 are met.

29. The Filers and the representatives who will act under the Dual Registration are in compliance, or will ensure that they are in compliance, with IIROC Rule 18.14.

30. In the absence of the requested relief, the Filers would be prohibited under subsection 4.1(1)(b) of NI 31-103 from permitting the Dual Registration.

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:

(a) the Dual Registration is granted for so long as all Canadian clients of CSSC are "institutional customers" within the meaning of IIROC Rule 2700;

(b) the Dual Registration relief shall immediately expire upon the earlier of:

(i) the effective date that amendments to NI 31-103 are made which limit the activities an EMD can conduct so that CSSU would be required to register as an investment dealer and become a member of IIROC as contemplated in CSA Staff Notice 31-331 Follow-Up to Broker-Dealer Registration in the Exempt Market Dealer Category; and

(ii) two (2) years from the date of this decision.

"Erez Blumberger"
Acting Director, Compliance and Registrant Regulation
Ontario Securities Commission