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Fidelity Investments Canada Limited and Dow AgroSciences Canada Inc. - MRRS Decision
Headnote
Variation of previous MRRS Decision extendingthe duration and extending the time within which the applicantmust transfer its group retirement business to an entity thatis appropriately registered.
Director's Decision
Variation of the duration of the original director'sdecision and extending the specified time within which the applicantmust transfer its group retirement business to an entity thatis properly registered.
Applicable Ontario Statute
Securities Act, R.S.O. 1990, c. S.5, as am.,ss. 25 and 74(1).
Applicable Ontario Securities CommissionRule
Rule 31-505 "Conditions of Registration"(1999) 22 O.S.C.B. 731, ss. 1.5 and 4.1.
IN THE MATTER OF
THE SECURITIES LEGISLATION OF
ALBERTA, SASKATCHEWAN, AND ONTARIO
AND
IN THE MATTER OF
THE MUTUAL RELIANCE REVIEW SYSTEM
FOR EXEMPTIVE RELIEF APPLICATIONS
AND
IN THE MATTER OF
FIDELITY INVESTMENTS CANADA LIMITED AND
DOW AGROSCIENCES CANADA INC.
MRRS DECISION DOCUMENT
WHEREAS the local securities regulatoryauthority or regulator (the "Decision Maker") in eachof Alberta, Saskatchewan, and Ontario (the "Jurisdictions")has received an application (the "Application") fromFidelity Investments Canada Limited ("Fidelity") tovary the MRRS Decision Document dated August 1, 2001 IN THEMATTER OF FIDELITY INVESTMENTS CANADA LIMITED AND DOW AGROSCIENCESINC. (the "Original MRRS Decision") which provided,subject to terms and conditions, relief from the Dealer RegistrationRequirement (as defined in the Original MRRS Decision) for certaintrades in shares of common stock of The Dow Chemical Company("Common Shares") made by Fidelity on behalf of theGroup Retirement Clients (as defined below) in the employer-sponsoredsavings plan (the "Program") of Dow AgroSciences CanadaInc. ("DowAgro");
AND WHEREAS Fidelity wishes to vary the duration of theOriginal MRRS Decision and extend the specified time withinwhich it must transfer its Group Retirement Business (as definedbelow) to an entity that is appropriately registered under thesecurities legislation of the Jurisdictions (the "Legislation")to trade in securities;
AND WHEREAS under the Mutual RelianceReview System for Exemptive Relief Applications (the "System"),the Ontario Securities Commission is the principal regulatorfor this application;
AND WHEREAS Fidelity has representedto the Decision Makers that:
1. Fidelity is registered in all Jurisdictionsas a dealer in the category of mutual fund dealer and is, orwill be, registered as an adviser in the categories of "investmentcounsel" and "portfolio manager" in all Jurisdictions.
2. Fidelity's registration under the legislationof the Jurisdictions (other than Quebec) as a "mutual funddealer" has been, or is expected to be, restricted to certainactivities that are incidental to its principal business. Therestricted trading activity includes trades by Fidelity to aparticipant in an employer-sponsored plan until the earlierof:
(i) the assumption of such trading activityby Fidelity Intermediary Securities Company Limited, a wholly-ownedsubsidiary of Fidelity, and
(ii) December 31, 2002.
3. Currently, Fidelity sells Common Shares tocertain participants ("Group Retirement Clients")in the Program.
4. Fidelity Retirement Services Company of CanadaLimited ("New Fidelity"), a wholly-owned subsidiaryof Fidelity, has applied for registration under the Legislationas a mutual fund dealer and has applied for membership in theMutual Fund Dealers Association (the "MFDA").
5. The Original MRRS Decision, a decision ofthe Director of the Ontario Securities Commission dated August1, 2001 (the "Original Director's Decision") and anOrder of the Alberta Securities Commission dated July 31, 2001(collectively, the "Relief") was granted to Fidelityand allows it to trade in securities of Common Shares wherethe trade is made to a Group Retirement Client until the earlierof:
(i) the assumption of such trading activityby New Fidelity; and
(ii) July 2, 2002 (the "Deadline").
6. The facts set out in the Relief are accurate,except as otherwise stated herein.
7. At the time when Fidelity received the Relief,Fidelity intended to transfer the Group Retirement Clients toNew Fidelity, once New Fidelity was registered as a mutual funddealer in each jurisdiction and was accepted as a member ofthe MFDA.
8. To service its Group Retirement Clients,Fidelity has determined that the business needs of the GroupRetirement Clients (the "Group Retirement Business")requires greater flexibility in terms of the product offeringthat would be permitted under a mutual fund dealer registration.
9. Fidelity has determined that the Group RetirementClients will be more appropriately serviced by an investmentdealer that is a member of the Investment Dealers Associationof Canada (the "IDA").
10. Fidelity has incorporated another wholly-ownedsubsidiary under the Business Corporations Act (Ontario), FidelityIntermediary Securities Company Limited (the "IDA Company"),which has submitted an application for registration as an investmentdealer in each Canadian jurisdiction. The IDA Company is a memberof the IDA.
11. Fidelity intends on transferring its GroupRetirement Clients to the IDA Company no later than December31, 2002. Fidelity proposes to run its Group Retirement Businessas a division of the IDA Company once the IDA Company has becomeregistered in each Canadian jurisdiction and once certain systemsand other changes have been made to ensure that the businesscan be conducted in a manner that is compliant with the IDABy-laws and Rules.
12. Fidelity is unable to transfer the GroupRetirement Clients to the IDA Company by the Deadline due toa number of operational and systems reasons.
13. Fidelity is attempting to ensure that thetransfer of the Group Retirement Clients will be completed assoon as possible.
AND WHEREAS under the System, this MRRSDecision Document evidences the decision of each Decision Maker(collectively, the "MRRS Decision");
AND WHEREAS each of the Decision Makersis satisfied that the test contained in the Legislation thatprovides the Decision Maker with the jurisdiction to make theDecision has been met;
THE MRRS DECISION of the Decision Makers,pursuant to the Legislation of each Jurisdiction, is that:
1. the representation in paragraphs 3 and 4of the Original MRRS Decision are replaced with paragraphs 2and 10, respectively, of this MRRS Decision; and
2. proviso number 3 of the Original MRRS Decisionis replaced with the following:
"3. this MRRS Decision will terminateupon the earlier of:
(1) the assumption of the activity referredto in paragraph 17 by Fidelity Intermediary Securities CompanyLimited; and
(2) December 31, 2002;"
PROVIDED THAT Fidelity complies withall other terms and conditions of the Original MRRS Decision.
May 14, 2002.
"Mary Theresa McLeod" "Robert L. Shirriff"
DECISION OF THE DIRECTOR
UNDER THE SECURITIES LEGISLATION
OF ONTARIO
WHEREAS the Director of the OntarioSecurities Commission (the "Director") has receivedan application from Fidelity to vary a decision of the Directorthat was granted pursuant to section 4.1 of Rule 31-505 - Conditionsof Registration (the "Registration Rule") on August1, 2001 (the "Original Director's Decision"), whichprovided relief from the requirements in paragraph 1.5(1)(b)of the Registration Rule to make enquiries of each participantin the Program, when Fidelity makes certain trades in CommonShares on behalf of the participants in the employer-sponsoredsavings plan of DowAgro;
AND WHEREAS Fidelity wishes to varythe duration of the Original Director's Decision and extendthe specified time within which it must transfer its Group RetirementBusiness to an entity that is appropriately registered underthe Legislation to trade in securities;
AND WHEREAS Fidelity has made to theDirector the same representations referred to in the above MRRSDecision;
AND UPON the Director being satisfiedthat to do so would not be prejudicial to the public interest;
IT IS THE DECISION of the Director,pursuant to section 4.1 of the Registration Rule, that, effectiveon the effective date of the above MRRS Decision, that the provisoin the Original Director's Decision stipulating that the OriginalDirector's Decision will terminate upon the earlier of:
(1) the assumption of the activity referredto in paragraph 17 of the above MRRS decision by New Fidelity;and
(2) July 2, 2002;
is replaced with the following:
(1) the assumption of the activity referredto in paragraph 17 by Fidelity Intermediary Securities CompanyLimited; and
(2) December 31, 2002;
PROVIDED THAT Fidelity complies withall other terms and conditions of the Original MRRS Decision.
May 14, 2002.
"David M. Gilkes"