Mutual Reliance Review System for ExemptiveRelief Applications -- relief granted to certain vice-presidentsof a reporting issuer from the insider reporting requirements,subject to certain conditions.
Applicable Ontario Statutory Provisions
Securities Act, R.S.O. 1990, c. S.5, as am.,ss. 1(1), 107, 108, 121(2)(a)(ii).
Regulation made under the Securities Act, R.R.O.1990, Reg. 1015, as am., Part VIII.
National Instrument 55-101 -- Exemption FromCertain Insider Reporting Requirements.
IN THE MATTER OF
THE SECURITIES LEGISLATIONOF
ALBERTA, SASKATCHEWAN, ONTARIO,QUÉBEC,
NOVA SCOTIA AND NEWFOUNDLANDAND LABRADOR
IN THE MATTER OF
THE MUTUAL RELIANCE REVIEWSYSTEM
FOR EXEMPTIVE RELIEF APPLICATIONS
IN THE MATTER OF
ROCKWATER CAPITAL CORPORATION
MRRS DECISION DOCUMENT
WHEREAS the local securities regulatoryauthority or regulator (the "Decision Maker")in each of the Provinces of Alberta, Saskatchewan, Ontario,Québec, Nova Scotia and Newfoundland and Labrador (the"Jurisdictions") has received an application(the "Application") from Rockwater CapitalCorporation ("Rockwater") for a decision underthe securities legislation of the Jurisdictions (the "Legislation")that the requirements contained in the Legislation for an insiderof a reporting issuer or the equivalent thereof to file reportsdisclosing the insider's direct or indirect beneficial ownershipof, or control or direction over, securities of the reportingissuer (the "Insider Reporting Requirements")shall not apply to certain individuals of a "major subsidiary"of Rockwater who are insiders of Rockwater by reason of havingthe title "Vice-President";
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, unless otherwise defined,the terms herein have the meaning set out in National Instrument14-101 Definitions or in Québec Commission Notice14-101;
AND WHEREAS Rockwater has representedto the Decision Makers that:
1. Rockwater is a corporation subsisting underthe Business Corporations Act (Ontario).
2. Rockwater's head office is located in Toronto,Ontario.
3. Rockwater is authorized to issue an unlimitednumber of common shares (the "Common Shares").
4. Rockwater is a reporting issuer, or theequivalent thereof, in all of the provinces and territoriesof Canada.
5. Rockwater is not in default of any requirementsunder the Legislation.
6. The Common Shares are listed and postedfor trading on Toronto Stock Exchange under the symbol "RCC".
7. Rockwater is a financial services companyproviding a broad range of financial products and servicesto individuals and corporations primarily through two wholly-ownedoperating subsidiaries: First Associates Investments Inc.("FAII"), a dealer registered in the categoriesof broker and investment dealer, or the equivalent thereof,in all of the provinces and territories of Canada and a memberof the Investment Dealers Association of Canada; and RockwaterAsset Management Inc., an adviser registered in the categoriesof investment counsel and portfolio manager in the Provinceof Ontario.
8. Rockwater has one "major subsidiary"as defined under National Instrument 55-101 Exemption fromCertain Insider Reporting Requirements ("NI 55-101"),being FAII.
9. As at the date hereof, the number of individualswho are insiders of Rockwater by reason of being a seniorofficer or director of Rockwater or a major subsidiary ofRockwater and who are not exempt from the Insider ReportingRequirements is 66.
10. Rockwater has made this application toseek the requested relief in respect of approximately 50 individuals,who, in the opinion of Rockwater satisfy the Exempt VP Criteria(as defined below).
11. Rockwater has implemented internal policiesand procedures relating to monitoring and restricting thetrading activities of all of its directors and employees.
12. These internal policies and proceduresare contained in Rockwater's Timely Disclosure, Confidentialityand Insider Trading Policy (the "Rockwater Policy")relating to trading in Rockwater's securities by all directorsand employees who have knowledge of material undisclosed informationabout Rockwater.
13. The objective of the Rockwater Policyis to (a) ensure that communications to the investing publicabout Rockwater are timely, factual, accurate and broadlydisseminated in accordance with all applicable legal and regulatoryrequirements and (b) to ensure that all directors and employeeswho routinely have access to material undisclosed informationabout Rockwater are aware of their responsibilities underthe Legislation and to assist them in complying with the Legislationin this regard.
14. Rockwater has adopted, published and distributedthe Rockwater Policy to all relevant persons and has filedthe Rockwater Policy with the Decision Makers in connectionwith this Application.
15. Pursuant to the Rockwater Policy, alldirectors and employees with knowledge of material undisclosedinformation about Rockwater may not trade in securities ofRockwater. In addition, such directors and employees may nottrade in securities of Rockwater during "black-out"periods around the release of Rockwater's financial resultsor any other "black-out" period as determined bythe senior management of Rockwater from time to time.
16. Rockwater has made this application toseek relief from the Insider Reporting Requirements for individualswho meet the following criteria (the "Exempt VP Criteria")set out in Canadian Securities Administrators Staff Notice55-306 Applications for Relief from the Insider ReportingRequirements by Certain Vice-Presidents (the "StaffNotice"):
(a) the individual is a vice-president ofFAII;
(b) the individual is not in charge of aprincipal business unit, division or function of Rockwateror FAII;
(c) the individual does not in the ordinarycourse receive, or have access to, information as to materialfacts or material changes concerning Rockwater before suchmaterial facts or material changes are generally disclosed,and;
(d) the individual is not an insider ofRockwater in any other capacity other than as a vice-presidentof FAII.
17. General Counsel to Rockwater, in consultationwith members of Rockwater's senior management team, reviewed(a) the organizational structure of Rockwater and FAII; (b)the function of each vice-president; and (c) the distributionof non-public material information about Rockwater througheach of its business units and assessed whether non-publicmaterial information about Rockwater is provided to a particularvice-president function in the ordinary course based on criteriacontained in the Staff Notice.
18. Rockwater applies the same analysis eachtime a new vice-president is appointed or an existing vice-presidentis promoted. Rockwater will review and, as necessary, updatethis analysis annually.
19. If an individual no longer satisfies theExempt VP Criteria, Rockwater will ensure that the individualis informed about his or her renewed obligation to file aninsider report on trades in securities of Rockwater.
AND WHEREAS under the System, this MRRSDecision Document evidences the decision of each Decision Maker(collectively, the "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 DECISION of the Decision Makers underthe Legislation is that the Insider Reporting Requirements shallnot apply to insiders of Rockwater who satisfy the Exempt VPCriteria for so long as such insiders satisfy the Exempt VPCriteria, provided that:
1. Rockwater agrees to make available to theDecision Makers, upon request, a list of all individuals whoare relying on the exemption granted by this Decision as atthe time of the request; and
2. the relief granted will cease to be effectiveon the date when NI 55-101 is amended.
August 29, 2003.
"Robert W. Davis"
"Paul M. Moore"