Securities Law & Instruments

IN THE MATTER OF

THE SECURITIES ACT,

R.S.O. 1990, c. S.5, AS AMENDED

AND

IN THE MATTER OF

MARTIN JOSEPH BERNIER

WRITTEN SUBMISSIONS TO THEDIRECTOR

PURSUANT TO SUBSECTION 26(3)OF THE SECURITIES ACT

Date:
June 4, 2003
 
Director:
Susan Greenglass
Senior Legal Counsel, Market Regulation
Capital Markets

Written submissions were provided by:

Martin Joseph Bernier
Christopher Jepson, Legal Counsel, RegistrantLegal Services, Capital Markets

DIRECTOR'S DECISION

Background

On July 2, 2002, Martin Joseph Bernier was grantedregistration by the Ontario Securities Commission (the Commission)as a salesperson for Assante Financial Management Ltd. (Assante)in the categories of mutual fund dealer and limited market dealer.Mr. Bernier resides in Saskatchewan. Staff of the Commissionbecame aware that Mr. Bernier had engaged in the trading ofsecurities in Ontario prior to being registered under the SecuritiesAct (Ontario) (the Act).

Mr. Bernier applied for renewal of his registrationas a salesperson under the Act. By letter dated February 18,2003 (the February 18 letter) to Mr. Bernier, staff of the Commissionadvised that they had reviewed his application for renewal ofregistration as a salesperson and recommended that the applicationbe approved subject to the following terms and conditions:

During 2003 and in any event no later thanAugust 17, 2003, the Applicant shall have successfully completedone of The Canadian Investment Funds Course offered by theInvestment Funds Institute of Canada or the Conduct and PracticesHandbook Course offered by the Canadian Securities Institute,notwithstanding that the Applicant may have successfully completedeither or both of these courses prior to registration.

In the February 18 letter, staff stated as follows:

The reason for this recommendation is that:

You engaged in the trading of securitiesin Ontario without appropriate registration. This indicatesan inadequate level of understanding of the ethical andregulatory responsibilities of a securities industry professional.It is therefore in the public interest that you renew yourproficiency in these areas.

Staff has recommended that the terms and conditionsattach to your registration for a period of 180 days, afterwhich they would be removed unless the Director has reasonto believe you are not suitable for unconditional renewalof registration at that time.

Pursuant to subsection 26(3) of the Act, beforea decision is made by the Director, you have the opportunityto be heard. You may take the opportunity to be heard eitherby making written submissions to the Director or by appearingin person before the Director.

Mr. Bernier requested to be heard through awritten submission, which was dated March 3, 2003.

Summary of Mr. Bernier's submission

Mr. Bernier asked that the Commission approvethe renewal of his registration without terms and conditions.Mr. Bernier noted that he has been licensed with the SaskatchewanSecurities Commission since 1989, initially as a salespersonwith a national Scholarship Trust Plan (RESP) and since 1991as a mutual fund salesperson. Since 1991, he has also been licensedas an insurance salesperson pursuant to the Saskatchewan InsuranceAct. Mr. Bernier noted that he is a member of the Canadian Associationof Insurance and Financial Advisors (now Advocis) and The FinancialPlanning Standards Council of Canada which require a minimumof 30 hours annually of continuing education and places a heavyemphasis on ethics.

Mr. Bernier also noted that, over the last sixyears, he has received the Chartered Financial Planner designationas well as the Registered Financial Planner designation. Inaddition, he has successfully completed the Partners, Directorsand Officers examination as well as the Branch manager's examinationand the Canadian Securities Course.

Mr. Bernier submitted that he services threeaccounts in Ontario. According to Mr. Bernier, all are longtime clients developed in Saskatchewan. Mr. Bernier submittedthat when they relocated to Ontario, he continued to servicetheir accounts at their request. Mr. Bernier noted that he hasnot marketed or solicited new business in Ontario and does notintend to.

Mr. Bernier submitted that when he was madeaware of the need for registration by Assante, he agreed todo so. Mr. Bernier further submitted that he acted in a professionalmanner and put his clients and their needs ahead of his own.

Summary of Staff's submission

Staff noted that the Commission has, over time,articulated three fundamental elements of suitability for registration:competence (which includes prescribed proficiency and knowledgeof the requirements of Ontario securities law), integrity (whichincludes honesty and good faith, particularly in dealings withclients, and compliance with Ontario securities law) and financialsoundness. Staff submitted that failure to obtain registrationin Ontario before engaging in registrable activity in the jurisdictionindicates a lack of competence and, possibly, a lack of integrityin that this individual, at best, has shown an inadequate levelof understanding of the ethical and regulatory responsibilitiesof a securities industry professional and, at worst, has chosento ignore the requirements of Ontario securities law. Staffsubmitted that it is in the public interest that Mr. Bernierrenew his proficiency by taking one of the courses specifiedin Ontario Securities Commission Rule 31-502 ProficiencyRequirements that include significant coverage of regulatoryand ethical responsibilities.

Decision

Having reviewed and considered the written submissionsprovided, I find that the terms and conditions set out in AppendixA should be imposed upon the registration of Mr. Bernier. Specifically,Mr. Bernier should be required to complete either: (1) The CanadianInvestment Funds Course offered by the Investment Funds Instituteof Canada, or (2) the Conduct and Practices Handbook Courseoffered by the Canadian Securities Institute within 180 daysfrom the date of this decision. I also agree with Staff's recommendationthat the terms and conditions should attach to Mr. Bernier'sregistration for a period of 180 days, after which they wouldbe removed unless there is reason to believe that Mr. Bernieris not suitable for unconditional renewal of registration atthat time.

Requiring appropriate registration before engagingin the trading of securities in Ontario is a basic requirementof the regulatory system. Although Mr. Bernier submitted thatthe three accounts that he services in Ontario were long timeclients developed in Saskatchewan, nonetheless he engaged inthe trading of securities in Ontario without appropriate registrationunder the Act. I agree with Staff's position, as set out inthe February 18 letter, that engaging in the trading of securitieswithout appropriate registration indicates an inadequate levelof understanding of the ethical and regulatory responsibilitiesof a securities industry professional. I am of the view thatit is in the public interest for Mr. Bernier to renew his proficiencyby taking one of the courses set out in Appendix A that includecoverage of regulatory and ethical responsibilities requiredby a registrant.

June 4, 2003.

"Susan Greenglass"

 

APPENDIX A

TERMS AND CONDITIONS OF REGISTRATIONOF MARTIN JOSEPH BERNIER

Within 180 days from the date of this decision,the Applicant shall have successfully completed one of The CanadianInvestment Funds Course offered by the Investment Funds Instituteof Canada or the Conduct and Practices Handbook Course offeredby the Canadian Securities Institute, notwithstanding that theApplicant may have successfully completed either or both ofthese courses prior to registration.