IN THE MATTER OF
THE SECURITIES ACT
R.S.O. 1990 C. S.5, AS AMENDED
IN THE MATTER OF
THE REGISTRATION OF
OPPORTUNITY TO BE HEARD BY THE DIRECTOR
PURSUANT TO SUBSECTION 26(3) OF THE SECURITIES ACT
Date: November 28, 2003
Director: David M. Gilkes
Submissions: Jessica Di Renzo
DECISION AND REASONS FOR DECISION
The decision of the Director is to grant the application subject to terms and conditions upon the registration of Nicholette Stuart-Russell (the Applicant). These are the reasons for the decision.
The Ontario Securities Commission (OSC) granted Ms. Stuart-Russell registration as a salesperson with CIBC Securities Inc. (CIBC) in September 1993. She left the securities industry in August 1999 to work in the travel industry. Ms. Stuart-Russell returned to the financial sector in May 2001 accepting a position with Royal Bank as an Account Manager/Credit Specialist. On April 29, 2003 the OSC received an application for registration of Ms. Stuart-Russell sponsored by Royal Mutual Fund Inc. (RMF).
On April 23, 2003, Staff sent an e-mail to RMF noting that the Applicant had not been registered over the past three years and as a result, her proficiencies had expired. The RMF applied to the OSC for exemption from the proficiencies of a mutual fund salesperson for Ms. Stuart-Russell. RMF noted in the exemption that the Applicant’s experience and use of her skills remained current. Further information was requested on how the Applicant’s skills were used and remained current.
The exemption was denied and staff recommended that Ms. Stuart-Russell not be granted registration as a mutual fund salesperson. A letter notifying Ms. Stuart-Russell and RMF of Staff’s recommendation was sent on July 22, 2003. After receiving Staff’s letter, the Applicant requested the opportunity to be heard by the Director pursuant to subsection 26(3) of the Act which states:
(3) Refusal – The Director shall not refuse to grant, renew, reinstate or amend registration or impose terms and conditions thereon without giving the applicant an opportunity to be heard.
The Applicant requested to be heard through a written submission, which was dated August 22, 2003 and received by the OSC on September 8, 2003.
Summary of the Applicant’s Submission
The Applicant noted that she had been under the impression that RMF had applied to have her registered on May 1, 2002. There is no record of this application on the OSC’s legacy database or in the OSC files. The last date of registration was August 1999 with CIBC Securities Inc.
Ms. Stuart-Russell also reiterated the exemption application in saying that her current position and daily reading has kept her knowledge and proficiency current. She further noted that she often works closely with mutual fund salespersons.
Summary of Staff’s Submission
Staff of the OSC recommended that the Applicant took the CSC in October 1998. In the almost five years that has passed, she worked less than one year in the securities industry, almost two years in the travel industry and since May 2001 has worked as an Account Manager/Credit Specialist with Royal Bank. Her recent experience has not kept her proficiency current.
Suitability for registration has three broad components: proficiency (education and experience), integrity, and financial soundness. The proficiency requirements for a mutual fund salesperson are specified in OSC rule 31-502. The rule clearly states that an applicant for registration must have completed a specified course or examination within three years before the date of the application for registration, or have been registered in the relevant category at any time during the three year period immediately before the application for registration. This condition was not met by the application for Ms. Stuart-Russell. If RMF had applied for registration for Ms. Stuart-Russell in May 2002, her proficiency would have still been stale-dated.
Ms. Stuart-Russell’s course requirements need to be updated, however, she gained relevant experience in the mutual fund industry while sponsored by CIBC and more recently with Royal Bank. It appears to me that the Applicant, Nicholette Stuart-Russell is suitable for registration as a mutual fund salesperson on behalf of Royal Mutual Fund Inc., subject to her completing any of the 1. Canadian Securities Course, 2. Canadian Investment Funds Course, or 3. Investment Funds in Canada Course, within 180 days of the date of this decision.
I therefore grant the application subject to the terms and conditions attached as Exhibit “A” to this order.
November 28, 2003.
“David M. Gilkes”
Terms and Conditions for registration of
Within 180 days from the date of this decision, the Applicant shall have successfully completed one of The Canadian Investment Funds Course offered by the Investment Funds Institute of Canada, The Canadian Securities Course offered by the Canadian Securities Institute, or the Investment Funds in Canada course offered by the Institute of Canadian Bankers, notwithstanding that the Applicant may have successfully completed any or all of these courses prior to this decision.