CMC Markets UK Plc and CMC Markets Canada Inc.

Decision

Headnote

National Policy 11-203 Process for Exemptive Relief Applications in Multiple Jurisdictions – Application by UK-based filer (Filer) and Canadian dealer affiliate (Dealer) (collectively, Applicants) for relief from prospectus requirement in connection with distribution by Filer through Dealer of "contracts for difference" and foreign exchange contracts (collectively CFDs) to investors resident in Applicable Jurisdictions, subject to terms and conditions – Filer regulated by the United Kingdom Financial Conduct Authority (FCA) – Dealer is registered in Ontario as investment dealer and a member of the Investment Industry Regulatory Organization of Canada (IIROC) – Applicants seeking relief to permit Applicants to offer CFDs to investors in Applicable Jurisdictions on a similar basis as in Québec, including relief permitting Applicants to distribute CFDs on the basis of clear and plain language risk disclosure document rather than a prospectus – risk disclosure document contains disclosure substantially similar to risk disclosure document required for recognized options in OSC Rule 91-502 Trades in Recognized Options and the regime for OTC derivatives contemplated by former proposed OSC Rule 91-504 OTC Derivatives (which was not adopted), and the Quebec Derivatives Act – Relief consistent with relief contemplated by OSC Staff Notice 91-702 Offerings of contracts for difference and foreign exchange contracts to investors in Ontario (OSC SN 91-702) – Relief granted, subject to terms and conditions as described in OSC SN 91-702 including four-year sunset clause.

Applicable Legislative Provisions

Securities Act, R.S.O. 1990, c.S.5, as am., ss. 53,74(1).

OSC Rule 91-502 Trades in Recognized Options.

OSC Rule 91-503 Trades in Commodity Futures Contracts and Commodity Futures Options Entered into on Commodity Futures Exchanges Situate Outside of Ontario.

Proposed OSC Rule 91-504 OTC Derivatives (not adopted).

January 30, 2018

 

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

CMC MARKETS UK PLC AND

CMC MARKETS CANADA INC.

(the Filers)

 

DECISION

 

Background

The principal regulator in the Jurisdiction has received an application (the Application) from CMC Markets UK Plc (CMC UK) and CMC Markets Canada Inc. (CMC Canada) (CMC UK and CMC Canada, together the Filers) for a decision under the securities legislation of the Jurisdiction (the Legislation) that the Filers and their respective officers, directors and representatives be exempt from the prospectus requirement in respect of the distribution of contracts for difference and over-the-counter (OTC) foreign exchange contracts (collectively, CFDs) to investors resident in the Applicable Jurisdictions (as defined below) subject to the terms and conditions below (the Requested Relief).

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 (the Principal Regulator); and

 

(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 each of the other provinces and territories of Canada, other than the provinces of Québec and Alberta, (the Non-Principal Jurisdictions, and, together with the Jurisdiction, the Applicable 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 Filers:

The Filers

1.             CMC UK is a company organized under the laws of England and Wales with its principal office in London, United Kingdom. Founded in 1989, CMC UK is an established international on-line trading company which, with its affiliates, offers CFDs to a broad range of clients in many countries.

 

2.             CMC UK is a privately held company, controlled indirectly by its principal founder, Mr. Peter Cruddas. CMC Markets Plc, the ultimate parent company of both CMC UK and CMC Canada, is a privately held company controlled directly by its principal founder, Mr. Peter Cruddas.

 

3.             CMC UK is authorized and regulated by the United Kingdom Financial Conduct Authority (the FCA) in the United Kingdom. CMC UK is currently regulated as a full scope BIPRU investment firm by the FCA. CMC UK is licensed in the U.K., among other things, to act as principal to its clients in the products it offers and may deal with all categories of clients, including directly with retail clients. Furthermore, CMC UK is regulated on a consolidated basis in the UK by the FCA.

 

4.             CMC UK is a "regulated entity" as defined in the rules and regulations (the IIROC Rules) of the Investment Industry Regulatory Organization of Canada (IIROC).

 

5.             CMC UK has established a Canadian dealer affiliate, CMC Canada, to act as a dealer for CFDs offered by CMC UK to Canadian clients.

 

6.             CMC Canada is a corporation amalgamated under the laws of Canada with its principal office in Toronto, Ontario. CMC Canada is an affiliate of CMC UK. CMC Markets plc is the ultimate parent company of both CMC UK and CMC Canada.

 

7.             CMC Canada is registered as a dealer in the category of investment dealer in each of the provinces and territories of Canada, and is a member of IIROC.

 

8.             Neither of the Filers has any securities listed or quoted on an exchange or marketplace in any jurisdiction inside or outside of Canada.

 

9.             The Filers offer CFDs to investors in each of the provinces and territories of Canada, except Québec and Alberta, (each an Applicable Jurisdiction) in accordance with the representations, terms and conditions described in the Existing Relief and wants to continue to do so in accordance with the representations, terms and conditions set out in this Decision. During the Interim Period (as defined below), the Filers are seeking the Requested Relief in connection with the offering of CFDs to investors in Ontario and intend to rely on this Decision and the Passport System described in MI 11-102 to offer CFDs in the Non-Principal Jurisdictions.

 

10.          Neither of the Filers is in default of any requirements of securities or derivatives legislation in Canada or the IIROC Rules or the IIROC Acceptable Practices (each, as defined below), except with respect to the fact that the Existing Relief has lapsed and was not renewed on a timely basis. The Filers have at all times since the Existing Relief lapsed acted in full compliance with the terms and conditions set out in such relief, except for the four-year sunset clause.

 

11.          In Québec, CMC UK is qualified by the Autorité des marchés financiers (AMF) pursuant to section 82 of the Derivatives Act (Québec) (the QDA) and authorized to market certain forward contracts and CFDs offered to the public, subject to the terms and conditions of its qualification decision and related provisions of the QDA.

 

12.          The Filers understand that staff of the Alberta Securities Commission have public interest concerns with CFD trading by retail clients and, accordingly, the Filers do not offer CFDs to retail investors in Alberta. The Filers undertake not to give notice that subsection 4.7(1) of MI 11-102 is intended to be relied upon in Alberta.


IIROC Rules and Acceptable Practices

 

13.          As a member of IIROC, CMC Canada is only permitted to enter into CFDs pursuant to the rules and regulations of IIROC (the IIROC Rules).

 

14.          In addition, IIROC has communicated to its members certain additional expectations as to acceptable business practices (IIROC Acceptable Practices) as articulated in IIROC's paper "Regulatory Analysis of Contracts for Differences (CFDs)" published by IIROC on June 6, 2007, as amended on September 12, 2007, for any IIROC member proposing to offer CFDs to investors. Each of the Filers is in compliance with IIROC Acceptable Practices in offering CFDs. The Filers will continue to offer CFDs in accordance with IIROC Acceptable Practices as may be established from time to time, and will not offer CFDs linked to bitcoin, cryptocurrencies or other novel or emerging asset classes to investors in the Applicable Jurisdictions without the prior written consent of IIROC.

 

15.          CMC Canada is required by IIROC to maintain a certain level of capital to address the business risks associated with its activities. The capital reporting required by IIROC (as per the calculation in the Form 1 Joint Regulatory Financial Questionnaire and Report (Form 1) and in the Monthly Financial Reports to IIROC) is based predominantly on the generation of financial statements and calculations so as to ensure capital adequacy. CMC Canada, as an IIROC member, is required to have a specified minimum capital which includes having any additional capital required with regards to margin requirements and other risks. This risk calculation is summarized as a risk adjusted capital calculation which is submitted in CMC Canada's Form 1 and required to be kept positive at all times.

 

Oversight of CMC UK

 

16.          CMC UK is authorized and regulated by the FCA in the United Kingdom. CMC UK is currently regulated as a full scope BIPRU firm with the FCA. CMC UK is licensed, among other things, to act as principal to its clients in the products offered and may deal with all categories of clients, including directly with retail investors.

 

17.          In order for a firm to be authorized and regulated by the FCA, the FCA must be satisfied that the firm meets certain threshold conditions prescribed by the Financial Services and Markets Act 2000 and under the FCA’s Handbook of Rules and Guidance. In similar fashion to reviews conducted by IIROC and the Principal Regulator, the FCA reviews, among other things, the firm’s legal status, location of offices, adequacy of resources and suitability. In order to remain authorized, a registered firm must demonstrate its continuing compliance with these conditions.

 

18.          As an FCA-regulated firm, CMC UK is required to comply with certain rules of the FCA (the FCA Rules). The FCA Rules seek to ensure, among other things, that regulated firms satisfy certain minimum standards. These minimum standards include the requirement that CMC UK maintain adequate financial resources at all times, so that CMC UK is able to meet its liabilities as they fall due. The FCA requires CMC UK to maintain capital resources equal to or in excess of its base capital requirement plus a firm specific variable capital requirement to address market, capital and operational risks. CMC UK monitors its regulatory capital on a daily basis (or more frequently depending on market conditions).

 

19.          The FCA also requires CMC UK to:

 

(a)           file financial reports on a monthly basis with the FCA;

 

(b)           immediately notify the FCA of any breach of the capital adequacy requirement; and

 

(c)           submit its audited financial statements within three months of the financial year end together with an annual return and reconciliation of the annual return to the audited financial statements.

 

Online Trading Platform

 

20.          The Filers’ NextGeneration® platform (the Trading Platform) is a proprietary and fully automated internet-based trading platform which allows clients to trade CFDs on an execution-only basis.

 

21.          The Trading Platform is a key component in a comprehensive risk management strategy which helps the Filers' clients and the Filers to manage the risks associated with leveraged products. This risk management system has evolved over many years with the objective of meeting the mutual interests of all relevant parties (including, in particular, clients). These attributes and services are described in more detail below:

 

(a)           Real-time account status and client reporting. Clients are provided with a real-time view of their account status. This includes how tick-by-tick price movements affect their account balances and required margins. Clients can view this information at any time by logging into their account.


(b)           Fully automated risk management system. Clients are instructed that they must maintain the required margin against their position(s). The risk management functionality of the Trading Platform ensures that client positions are closed out when the client no longer maintains sufficient margin in their account to support the position, thereby preventing the client from being placed in a margin call situation or losing more than their stated risk capital or cumulative loss limit. This functionality also ensures that the Filers will not incur any credit risk vis-à-vis its customers in respect of CFD transactions.

 

(c)           Wide range of order types. The Trading Platform also provides risk management tools such as stop loss orders, limit orders, contingent orders and upper and lower bounds on market orders. These tools are designed to help clients reduce the risk of loss.

 

22.          The Trading Platform is similar to those developed for on-line brokerages in that the client trades without other communication with, or advice from, the dealer. The Trading Platform is not a "marketplace" as defined in National Instrument 21-101 Marketplace Operation since a marketplace is any facility that brings together multiple buyers and sellers by matching orders in fungible contracts in a nondiscretionary manner.

 

23.          CMC UK is the counterparty to its clients' CFD trades; it will not act as an intermediary, broker or trustee in respect of the CFD transactions. Neither of the Filers manage any discretionary accounts, nor do they provide any trading advice or recommendations regarding CFD transactions.

 

24.          The CFDs are OTC contracts and are not transferable.

 

25.          The ability to lever an investment is one of the principal features of CFDs. Leverage allows clients to magnify investment returns (or losses) by reducing the initial capital outlay required to achieve the same market exposure that would be obtained by investing directly in the underlying instrument, asset or sector.

 

26.          The IIROC Rules and the IIROC Acceptable Practices set out detailed requirements and expectations relating to leverage and margin for offerings of CFDs. The degree of leverage may be amended in accordance with the IIROC Rules and the IIROC Acceptable Practices as may be established from time to time.

 

27.          Pursuant to section 13.12 Restriction on lending to clients of National Instrument 31-103 Registration Requirements, Exemptions and Ongoing Registrant Obligations, only those firms that are registered as investment dealers (a condition of which is to be a member of IIROC) may lend money, extend credit or provide margin to a client.

 

Structure of CFDs

 

28.          A CFD is a derivative product that allows clients to obtain economic exposure to the price movement of an underlying instrument, asset or sector, such as a share, index, market sector, currency pair, treasury or commodity, without the need for ownership and physical settlement of the underlying instrument or asset. Unlike certain OTC derivatives, such as forward contracts, CFDs do not require or oblige either the principal counterparty (being CMC UK for the purposes of the Requested Relief) nor any agent (being CMC Canada for the purposes of the Requested Relief) to deliver the underlying instrument or asset.

 

29.          CFDs to be offered by the Filers will not confer the right or obligation to acquire or deliver the underlying security, instrument or asset itself, and will not confer any other rights of shareholders of the underlying security, instrument or asset, such as voting rights. Rather, a CFD is a derivative instrument which is represented by an agreement between a counterparty and a client to exchange the difference between the opening price of a CFD position and the price of the CFD at the closing of the position. The value of the CFD is generally reflective of the movement in prices at which the underlying instrument or asset is traded at the time of opening and closing the position in the CFD.

 

30.          CFDs allow clients to take a long or short position on an underlying instrument, asset or sector, but unlike futures contracts they have no fixed expiry date or standard contract size or an obligation for physical delivery of the underlying instrument or asset.

 

31.          CFDs allow clients to obtain exposure to markets, instruments and assets that may not be available directly, or may not be available in a cost-effective manner.

 

CFDs Distributed in the Applicable Jurisdictions

 

32.          Certain types of CFDs, such as CFDs where the underlying instrument is a security, may be considered to be "securities" under the securities legislation of the Applicable Jurisdictions.

 

33.          Investors wishing to purchase CFDs must open an account with CMC Canada and complete a principal contract with CMC UK.

 

34.          Prior to a client's first CFD transaction and as part of the account opening process, the Filers will provide the client with a separate risk disclosure document that clearly explains, in plain language, the transaction and the risks associated with the transaction (the Risk Disclosure Document). The risk disclosure document includes the required risk disclosure set forth in Schedule A to the Regulations to the QDA and leverage risk disclosure required under the IIROC Rules. The Risk Disclosure Document contains disclosure that is substantially similar to the risk disclosure statement required for recognized options in OSC Rule 91-502 Trades in Recognized Options (which provides both registration and prospectus exemptions) (OSC Rule 91-502) and the regime for OTC derivatives contemplated by OSC SN 91-702 (as defined below) and proposed OSC Rule 91-504 OTC Derivatives (which was not adopted) (Proposed Rule 91-504). The Filers will ensure that, prior to a client's first trade in a CFD transaction, a complete copy of the Risk Disclosure Document provided to that client has been delivered, or has previously been delivered, to the Principal Regulator.

 

35.          Prior to a client's first CFD transaction and as part of the account opening process, CMC Canada will obtain a written or electronic acknowledgement from the client confirming that the client has received, read and understood the Risk Disclosure Document. Such acknowledgement is separate and prominent from other acknowledgements provided by the client as part of the account opening process.

 

36.          As is customary in the industry, and due to the fact that this information is subject to factors beyond the control of the Filers (such as changes in the IIROC Rules), information such as the underlying instrument listing and associated margin rates would not be disclosed in the Risk Disclosure Document but will be available to the client at the time of account opening on both CMC Canada’s website and the Trading Platform.

 

Satisfaction of the Registration Requirement

 

37.          The role of CMC Canada as it relates to the CFD offering is limited to acting as an execution-only dealer. In this role, CMC Canada, among other things, is responsible for approving all marketing, for holding of clients funds, and for client approval (including the review of know-your-client (KYC) due diligence and account opening suitability assessments).

 

38.          IIROC Rules exempt member firms that provide execution-only services such as discount brokerages from the obligation to determine whether each trade is suitable for a client. However, IIROC has exercised its discretion to impose additional requirements on members proposing to trade in CFDs (namely the IIROC Acceptable Practices described in paragraph 14) which requires, among other things, that:

 

(a)           applicable risk disclosure documents and client suitability waivers provided be in a form acceptable to IIROC;

 

(b)           the firm's policies and procedures, amongst other things, require CMC Canada to assess whether CFD trading is appropriate for a client before an account is approved to be opened. This account opening suitability process includes an assessment of the client's investment knowledge and trading experience, client identification, screening applicants and customers against lists of prohibited/blocked persons, and detecting and reporting suspicious trading and potential terrorist financing and money laundering activities to applicable enforcement authorities;

 

(c)           CMC Canada’s registered dealing representatives, as well as their registered supervisors who oversee the KYC and initial product suitability analysis will meet, or be exempt from, the proficiency requirements for futures trading and will be registered with IIROC as Investment Representative for retail customers in the product category of Futures Contracts and Futures Contract Options (IR). In addition, CMC Canada must have a fully qualified Supervisor for such products; and

 

(d)           cumulative loss limits for each client's account be established (this is a measure normally used by IIROC in connection with futures trading accounts).

 

39.          The CFDs offered in Canada are offered in compliance with applicable IIROC Rules and other IIROC Acceptable Practices.

 

40.          IIROC limits the underlying instruments in respect of which a member firm may offer CFDs since only certain securities are eligible for reduced margin rates. For example, underlying equity securities must be listed or quoted on certain "recognized exchanges" (as that term is defined in the IIROC Rules) such as the Toronto Stock Exchange or the New York Stock Exchange. The purpose of these limits is to ensure that CFDs offered in Canada will only be available in respect of underlying instruments that are traded in well-regulated markets, in significant enough volumes and with adequate publicly available information, so that clients can form a sufficient understanding of the exposure represented by a given CFD.

 

41.          The IIROC Rules prohibit the margining of CFDs where the underlying instrument is a synthetic product (single U.S. sector or "mini-indices"). For example, Sector CFDs (i.e., basket of equities for the financial institutions industry) may be offered to non-Canadian clients; however, this is not permissible under the IIROC Rules.

 

42.          IIROC members seeking to trade CFDs are generally precluded, by virtue of the nature of the contracts, from distributing CFDs that confer the right or obligation to acquire or deliver the underlying security, instrument or asset itself (convertible CFDs), or that confer any other rights of shareholders of the underlying security, instrument or asset, such as voting rights.

 

43.          The Requested Relief, if granted, would (and the Existing Relief does) substantially harmonize the position of the regulators in the Applicable Jurisdictions on the offering of CFDs to investors in the Applicable Jurisdictions with how those products are offered to investors in Québec under the QDA. The QDA provides a legislative framework to govern derivatives activities within that province. Among other things, the QDA requires such products to be offered to investors through an IIROC member and the distribution of a standardized risk disclosure document rather than a prospectus in order to distribute such contracts to investors resident in Québec.

 

44.          The Requested Relief, if granted, would be (and the Existing Relief is) consistent with the guidelines articulated by Staff of the Principal Regulator in OSC Staff Notice 91-702 Offerings of Contracts for Difference and Foreign Exchange Contracts to Investors (OSC SN 91-702). OSC SN 91-702 provides guidance with regards to the distributions of CFDs, foreign exchange contracts and similar OTC derivative products to investors in the Jurisdiction.

 

45.          The Principal Regulator has previously recognized that the prospectus requirement may not be well suited for the distribution of certain derivative products to investors in the Jurisdiction, and that alternative requirements, including requirements based on clear and plain language risk disclosure, may be better suited for certain derivatives.

 

46.          In Ontario, both OSC Rule 91-502 and OSC Rule 91-503 Trades in Commodity Futures Contracts and Commodity Futures Options Entered into on Commodity Futures Exchanges Situate Outside of Ontario (OSC Rule 91-503) provide for a prospectus exemption for the trading of derivative products to clients. The Requested Relief is consistent with the principles and requirements of OSC Rule 91-502, OSC Rule 91-503 and Proposed Rule 91-504.

 

47.          The Filers submit that the Requested Relief, if granted, would (and the Existing Relief does) harmonize the Principal Regulator's position on the offering of CFDs with certain other foreign jurisdictions that have concluded that a clear, plain language risk disclosure document is appropriate for retail clients seeking to trade in foreign exchange contracts.

 

48.          The Filers are of the view that requiring compliance with the prospectus requirement in order to enter into CFDs with retail clients would not be appropriate since the disclosure of a great deal of the information required under a prospectus and under the reporting issuer regime is not material to a client seeking to enter into a CFD transaction. The information to be given to such a client should principally focus on enhancing the client's appreciation of product risk including counterparty risk. In addition, most CFD transactions are of short duration (positions are generally opened and closed on the same day) and are settled when positions are closed. Profit and loss for each position is accumulated for the duration of the period the position is held.

 

49.          CMC UK is regulated by the FCA which has a robust compliance regime including specific requirements to address market, capital and operational risks. CMC Canada is regulated by IIROC, which has a robust compliance regime including specific requirements to address market, capital and operational risks.

 

50.          The Filers submit that the regulatory regimes developed by the FCA, AMF and IIROC for CFDs adequately address issues relating to the potential risk to the clients of CMC UK acting as counterparty. In view of these regulatory regimes, investors would receive little or no additional benefit from requiring the Filers to also comply with the prospectus requirement.

 

51.          The Requested Relief in respect of each Applicable Jurisdiction is conditional on the CMC Canada being registered as an investment dealer with the securities regulator in such Applicable Jurisdiction and maintaining its membership with IIROC and that all CFD transactions be conducted pursuant to the IIROC Rules and in accordance with the IIROC Acceptable Practices.

Decision

The Principal Regulator is satisfied that the test set out in the Legislation to make the Decision is met.

The Decision of the Principal Regulator is that the Requested Relief is granted provided that:

 

(a)           all CFDs traded with residents in the Applicable Jurisdictions shall be executed through CMC Canada;

 

(b)           CMC UK remains registered with the FCA and in compliance with FCA Rules;

 

(c)           with respect to residents of an Applicable Jurisdiction, CMC Canada remains registered as a dealer in the category of investment dealer with the Principal Regulator and the Commission in such Applicable Jurisdiction and a member of IIROC;

 

(d)           all CFD transactions with clients resident in the Applicable Jurisdictions shall be conducted pursuant to the IIROC Rules imposed on members seeking to trade in CFDs and in accordance with the IIROC Acceptable Practices, as amended from time to time;

 

(e)           if the Filers continue to offer CFDs to residents of Québec, all CFD transactions with clients resident in the Applicable Jurisdictions be conducted pursuant to the rules and regulations of the QDA and the AMF, as amended from time to time, unless and to the extent there is a conflict between i) the rules and regulations of the QDA and the AMF, and ii) the requirements of the securities laws of the Applicable Jurisdictions, the IIROC Rules and the IIROC Acceptable Practices, in which case the latter shall prevail;

 

(f)            prior to a client first entering into a CFD transaction, the Filers have provided to the client the Risk Disclosure Document described in paragraph 34 and have delivered, or have previously delivered, a copy of the Risk Disclosure Document provided to that client to the Principal Regulator;

 

(g)           prior to a client's first CFD transaction and as part of the account opening process, the Filers have obtained a written or electronic acknowledgement from the client, as described in paragraph 35, confirming that the client has received, read and understood the Risk Disclosure Document;

 

(h)           the Filers have furnished to the Principal Regulator the name and principal occupation of its officers and directors, together with either the personal information form and authorization of indirect collection, use and disclosure of personal information provided for in National Instrument 41-101 General Prospectus Requirements or the registration information form for an individual provided for in Form 33-109F4 of National Instrument 33-109 Registration Information Requirements completed by any officer or director;

 

(i)            the Filers shall promptly inform the Principal Regulator in writing of any material change affecting the Filers, being any change in the business, activities, operations or financial results or condition of the Filers that may reasonably be perceived by a counterparty to a derivative to be material;

 

(j)            the Filers shall promptly inform the Principal Regulator in writing if a self-regulatory organization or any other regulatory authority or organization initiates proceedings or renders a judgment related to disciplinary matters against the Filers concerning the conduct of activities with respect to CFDs;

 

(k)           within 90 days following the end of its financial year, CMC UK shall submit to the Principal Regulator the audited annual financial statements of CMC UK; and

 

(l)            the Requested Relief shall immediately expire upon the earliest of:

 

(i)            four years from the date that this Decision is issued;

 

(ii)           in respect of a subject Applicable Jurisdiction or Québec, the issuance of an order or decision by a court, the Commission in such Applicable Jurisdiction, the AMF (in respect of Québec) or other similar regulatory body that suspends or terminates the ability of the Filers to offer CFDs to clients in such Applicable Jurisdiction or Québec; and

 

(iii)          with respect to an Applicable Jurisdiction, the coming into force of legislation or a rule by its Commission regarding the distribution of OTC derivatives to investors in such Applicable Jurisdiction

 

(the Interim Period).

“Deborah Leckman”                                                                           “Robert Hutchison”

Commissioner                                                                                     Commissioner

Ontario Securities Commission                                                       Ontario Securities Commission