Swift Trade Securities Inc. - MRRS Decision

MRRS Decision

Headnote

MutualReliance Review System for Exemptive Relief Applications - Pursuantto section 144 of the Act, variation of an order providing, subjectto terms and conditions, relief from the Suitability Requirements,as reflected in paragraph 1.5(1)(b) of OSC Rule 31-505, to specifythe client accounts of the Filer to which the Suitability ReliefOrder applies and to vary the course requirements with respectto such clients. Pursuantto section 144 of the Act, variation of a decision made pursuantto s.21.1(4) of the Act that, subject to terms and conditions,the IDA Suitability Requirements do not apply to the Filer, tospecify the client accounts of the Filer to which the SuitabilityRelief Order applies and to vary the course requirements withrespect to such clients. ApplicableOntario Statute SecuritiesAct R.S.O. 1990, c.S.5, as amended, s.21.1(4), s.144. RuleCited OntarioSecurities Commission Rule 31-505 "Conditions of Registration"(1999) 22 O.S.C.B. 731. IDARegulations Cited IDARegulation 1300.1(a) and (b), 1900.4.

INTHE MATTER OF

THESECURITIES LEGISLATION OF

BRITISHCOLUMBIA AND ONTARIO


AND

INTHE MATTER OF

THEMUTUAL RELIANCE REVIEW SYSTEM

FOREXEMPTIVE RELIEF APPLICATIONS


AND

INTHE MATTER OF

SWIFTTRADE SECURITIES INC.

MRRSDECISION DOCUMENT

WHEREASthe local securities regulatory authority or regulator (the"Decision Maker") in each of the provinces of British Columbiaand Ontario (collectively, the "Jurisdictions") has receivedan application from Swift Trade Securities Inc. (the "Filer"),formerly known as Penson Securities Inc., to vary the MRRS DecisionDocument dated June 29, 2001, IN THE MATTER OF PENSON SECURITIESINC., which provided, subject to the terms and conditions setout therein, relief from certain suitability obligations onan order-by-order basis with respect to clients of the Filerunder the securities legislation of the Jurisdictions and decided,subject to terms and conditions, that certain suitability requirementsof the Investment Dealers Association of Canada did not applyto the Filer (the "Suitability Relief Order");

ANDWHEREAS the terms "Suitability Requirements", "IDA SuitabilityRequirements" and "Registered Representatives" shall each havethe respective meaning ascribed thereto under the SuitabilityRelief Order; ANDWHEREAS the Filer wishes to vary the Suitability ReliefOrder in particular to specify the client accounts of the Filerto which the Suitability Relief Order applies and to vary thecourse requirements with respect to such clients; ANDWHEREAS under the Mutual Reliance Review System for ExemptiveRelief Applications (the "System"), the Ontario Securities Commissionis the principal regulator for this application; ANDWHEREAS the Filer has represented to the Decision Makersthat: 1.the Filer changed its name from Penson Securities Inc. to SwiftTrade Securities Inc. on July 10, 2001, is a corporation incorporatedunder the Canada Business Corporations Act, and is registeredunder the Legislation as an investment dealer and is a memberof the IDA; 2.the Filer seeks to vary the Suitability Relief Order as follows: (a)to specify the clients of the Filer to which the Suitability ReliefOrder applies; and (b)to recognize that the Filer will require a new course requirement,comprising a one week theory course followed by an exam on whicha passing grade of 70% is required, and that the five week practicalcourse will be removed from the mandatory curriculum, with theoption left open to clients to request further hands-on practicaltraining if they desire it; 3.the Filer and its Registered Representatives will otherwise continueto comply with the Suitability Requirements and IDA SuitabilityRequirements for day trading client accounts on the same basisas in the Suitability Relief Order; and 4.except as noted above, the Filer confirms the representationsto the Decision Makers in the Suitability Relief Order; ANDWHEREAS under the System, this MRRS Decision Documentevidences the decision of each Decision Maker (collectively, the"Decision"); ANDWHEREAS each of the Decision Makers is satisfied thatthe test contained in the Legislation that provides the DecisionMaker with the Jurisdiction to make the Decision has been met; THEDECISION of the Decision Maker under the Legislationis that the Suitability Relief Order is amended by: (a)replacing the reference in Recital (a) of the Suitability ReliefOrder to "each client of the Filer" with the reference "each clientof the Day Trading Business (as defined below) of the Filer (each,a "Day Trading Client")"; (b)replacing each reference to the word "client" or "customer" thereafterto "Day Trading Client"; and (c)replacing Representations 4 and 6 with the following: (i)4. the Filer provides electronic day trading services (the "DayTrading Business") to certain clients; and (ii)6. prospective clients of the Day Trading Business will be requiredto complete a one week theory course, followed by a three-hourexamination on which a passing grade of 70% is required, and onlyby passing such examination will Day Trading Clients be permittedto use the Filer's facilities in connection with the Day TradingBusiness. DATEDJanuary 23, 2002. "RandeePavalow"

 

THEDECISION of the Decision Makers is that the SuitabilityRelief Order is amended by: (a)replacing the reference in Recital (a) of the Suitability ReliefOrder to "each client of the Filer" with the reference "each clientof the Day Trading Business (as defined below) of the Filer (each,a "Day Trading Client")"; (b)replacing each reference to the word "client" or "customer" thereafterto "Day Trading Client"; and (c)replacing Representations 4 and 6 with the following: (i)4. the Filer provides electronic day trading services (the "DayTrading Business") to certain clients; and (ii)6. prospective clients of the Day Trading Business will be requiredto complete a one week theory course, followed by a three-hourexamination on which a passing grade of 70% is required, and onlyby passing such examination will Day Trading Clients be permittedto use the Filer's facilities in connection with the Day TradingBusiness. January23, 2002. "PaulMoore"       "R. Stephen Paddon"