UBS Securities LLC and Bloomberg Tradebook Canada Company - s. 38 of the CFA, s. 74 of the OSA, s. 211 of the Regulation and s. 6.1 of Rule 91-502

Headnote

Section 38 of the Commodity Futures Act (Ontario), Section 74 of the OSA, Section 211 of the Regulation and Section 6.1 of Rule 91-502 -- enable Institutional Investors to trade futures and options through the Bloomberg Tradebook system and UBS LLC.

July 5, 2005

IN THE MATTER OF

THE COMMODITY FUTURES ACT

R.S.O. 1990, CHAPTER C.20, AS AMENDED (the "CFA")

AND

IN THE MATTER OF

THE SECURITIES ACT

R.S.O. 1990, CHAPTER S.5, AS AMENDED (the "OSA")

AND

IN THE MATTER OF

ONTARIO REGULATION 1015 MADE UNDER THE OSA

R.R.O. 1990, REG. 1015, AS AMENDED (the "Regulation")

AND

IN THE MATTER OF

RULE 91-502

TRADES IN RECOGNIZED OPTIONS (the "RULE")

AND

IN THE MATTER OF

UBS SECURITIES LLC

AND

BLOOMBERG TRADEBOOK CANADA COMPANY

ORDER AND RULING

(Section 38 of the CFA, Section 74 of the OSA, Section 211 of the Regulation and

Section 6.1 of Rule 91-502)

UPON the application (the "Application") of UBS Securities LLC ("UBS LLC") and Bloomberg Tradebook Canada Company ("Tradebook Canada") (collectively, the "Applicants"), in connection with trades in futures and options on behalf of Institutional Investors (as defined in Appendix 1 to this order) that are routed through the electronic order-routing system made available by Tradebook Canada (the "TBFO System") and executed by UBS LLC, to the Ontario Securities Commission (the "Commission") for:

(a) an order pursuant to section 38 of the CFA for relief from paragraph 22(1)(a) and section 33 of the CFA for certain trades in futures contracts;

(b) an exemption pursuant to section 211 of the Regulation from the restrictions set out in subsection 208(1) of the Regulation for certain trades in options and futures;

(c) a ruling pursuant to section 74 of the OSA for relief from section 53 for certain trades in options and futures; and

to the Director for an order pursuant to section 6.1 of the Rule for relief from section 3.1 of the Rule for certain trades in options.

AND UPON the Applicants having represented to the Commission as follows:

Bloomberg Tradebook Entities

1. Tradebook Canada, a Nova Scotia unlimited liability company, is registered as an investment dealer under the OSA and is a member of the Investment Dealers Association of Canada ("IDA").

2. Bloomberg Tradebook LLC ("Tradebook U.S."), a Delaware (U.S.) limited liability company, is an introducing broker registered with the U.S. Commodity Futures Trading Commission ("U.S. CFTC"), a member of the U.S. National Futures Association ("U.S. NFA"), a broker-dealer registered with the U.S. Securities and Exchange Commission ("U.S. SEC") and a member of the U.S. National Association of Securities Dealers, Inc. ("U.S. NASD"). Tradebook U.S. is registered as an international dealer under the OSA and has attorned to the jurisdiction of the courts of Ontario and appointed an agent for service in Ontario.

3. Bloomberg Tradebook (Bermuda) Ltd. ("Tradebook Bermuda"), a Bermuda company, is registered under the Bermuda Investment Business Act.

UBS Entities

4. UBS LLC, a Delaware (U.S.) limited liability company, is an integrated investment bank whose clients include financial institutions, corporations, governments and individuals. UBS LLC provides its clients with a broad range of financial products and services. In the United States, UBS LLC is a futures commission merchant registered with the U.S. CFTC, a member of the U.S. NFA, a broker-dealer registered with the U.S. SEC and a member of the U.S. NASD.

5. UBS LLC is registered as an international dealer under the OSA and has attorned to the jurisdiction of the courts of Ontario and appointed an agent for service in Ontario.

6. UBS Securities Canada Inc., an Ontario corporation, is registered as an investment dealer and broker under the OSA and as a dealer under the CFA but does not act as a broker for Futures Trades (as defined below) or Options Trades (as defined below).

7. UBS LLC and certain of its affiliates other than UBS Securities Canada Inc. (collectively, "UBS") are engaged in the business of providing execution and, unless the client has directed otherwise, clearing broker services for trades in futures and options on futures other than futures and options on futures traded on the Bourse de Montreal (collectively, "Futures") and options on securities and options on securities indices (collectively, "Options") for clients in the United States and throughout the world.

8. UBS LLC will not rely on the prospectus and registration exemptions provided in OSC Rule 91-503 Trades in Commodity Futures Contracts and Commodity Futures Options Entered into on Commodity Futures Exchanges Situate outside of Ontario for Futures Trades.

Proposed Transactions

9. The TBFO System will offer Ontario clients execution and, unless the client has directed otherwise, clearing broker services for trades in Futures, and Options. Orders for Futures entered on the TBFO System and executed by UBS LLC ("Futures Trades") will be routed and effected as shown on the futures order flow chart and accompanying text attached as Appendix 2 to this order (the "Futures Order Flow Chart"). Orders for Options entered on the TBFO System and executed by UBS LLC ("Options Trades") will be routed and effected as shown on the options order flow chart and accompanying text attached as Appendix 3 to this order (the "Options Order Flow Chart", and together with the Futures Order Flow Chart, the "Order Flow Charts").

10. The Ontario clients that will use the TBFO System to route orders to UBS LLC will be Institutional Investors.

11. As outlined in the Futures Order Flow Chart, all orders for Futures Trades are routed through Tradebook Canada to Tradebook U.S. and then to UBS LLC to be executed on exchanges worldwide. As outlined in the Options Order Flow Chart, the process is substantially identical for Options Trades, except Tradebook Canada routes Options Trades to Tradebook Bermuda, which in turn routes them on to UBS LLC to be executed on exchanges located outside the United States.

12. UBS LLC trades Futures listed on futures exchanges located outside of Canada and cleared through clearing corporations located outside of Canada and Options listed on options exchanges located primarily outside of Canada and cleared through clearing corporations located primarily outside Canada. If it is a member of the exchange on which the trade will be made, UBS LLC executes the client order on the exchange in accordance with the rules and customary practice of the exchange. If it is not a member of the exchange on which the trade will be made, UBS LLC will engage a local broker, which may be an affiliate of UBS LLC, to assist in the execution and clearance of trades. In addition, clients of UBS LLC may direct that the trades executed by UBS LLC be cleared through non-UBS clearing brokers. UBS LLC remains responsible for the execution and, unless the client has directed otherwise, clearance of each Futures Trade and Options Trade.

13. When UBS LLC performs only the execution of a client's order and "gives-up" the transaction for clearance to a non-UBS clearing broker, the non-UBS clearing broker is required to comply with the rules of the exchanges of which it is a member and any relevant regulatory requirements, including requirements under the OSA and/or CFA as applicable.

14. As is customary for all trading on futures and options exchanges, a clearing corporation appointed by the exchange is substituted as a universal counterparty on all trades and client orders are submitted to the exchange in the name of UBS. The client is responsible to UBS LLC for payment for the trade and UBS is in turn responsible to the clearing corporation for payment unless the trade is given-up to a non-UBS clearing broker for clearance and settlement.

15. Clients using the TBFO System will execute a standard clearing agreement with a clearing broker, whether such clearing broker is UBS LLC or a non-UBS clearing broker. The clients will execute give-up agreements for transactions given-up by UBS LLC at the instruction of the client to non-UBS clearing brokers for clearance and settlement. In addition, clients will be required to execute the Bloomberg Tradebook Agreement and the Tradebook Futures and Options Addendum to the Bloomberg Tradebook Agreement.

16. Clients will pay commissions for trades to UBS LLC or the non-UBS clearing broker and such commissions will be shared among UBS LLC, certain of its affiliates, if applicable, the non-UBS clearing broker, if applicable, and Tradebook U.S. or Tradebook Bermuda. Tradebook Canada is compensated by Tradebook U.S. or Tradebook Bermuda for its expense in providing clients with access to the TBFO System.

AND UPON considering the Application and the recommendation of staff of the Commission;

AND UPON the Commission and the Director being satisfied that it would not be prejudicial to the public interest to grant the exemptions requested.

IT IS ORDERED pursuant to section 38 of the CFA that paragraph 22(1)(a) of the CFA does not apply to the Applicants in respect of Futures Trades and section 33 of the CFA does not apply to the Applicants in respect of Futures Trades, provided that

1. at the time trading activity is engaged in:

(a) UBS LLC is registered with the U.S. CFTC as a futures commission merchant and is a member of the U.S. NFA in good standing;

(b) UBS LLC is registered as an international dealer under the OSA; and

(c) Tradebook Canada is registered as an investment dealer under the OSA;

2. each Ontario client effecting Futures Trades is an Institutional Investor and, if using a non-UBS clearing broker, has represented and covenanted that the broker is or will be appropriately registered or exempt from registration under the CFA; and

3. each Ontario client effecting Futures Trades receives disclosure upon entering into the agreement by which it establishes an account relating to the TBFO System that includes:

(a) a statement that there may be difficulty in enforcing any legal rights against UBS LLC or any of its directors, officers or employees because they are resident outside of Canada and all or substantially all of their assets are situated outside of Canada; and

(b) a statement that UBS LLC is not registered under legislation in Ontario governing trading in commodity futures and, accordingly, the protection available to Ontario clients of a dealer registered under such legislation will not be available to clients of UBS LLC; however, UBS LLC is registered as an international dealer under securities legislation in Ontario and the protection arising from such registration is available to Ontario clients; and

(c) a risk disclosure statement that complies with legislative requirements applicable to UBS LLC in the United States, and provides substantially similar disclosure to that required under section 40 of the CFA.

AND IT IS RULED pursuant to section 74 of the OSA that section 53 of the OSA does not apply to the Applicants in respect of Options Trades and Futures Trades, provided that:

1. at the time trading activity is engaged in:

(a) UBS LLC is registered with the U.S. SEC as a broker-dealer and is a member of the U.S. NASD in good standing;

(b) UBS LLC is registered as an international dealer under the OSA; and

(c) Tradebook Canada is registered as an investment dealer under the OSA;

2. each Ontario client effecting Options Trades is an Institutional Investor and, if using a non-UBS clearing broker, has represented and covenanted that the broker is or will be appropriately registered or exempt from registration under the OSA; and

3. each Ontario client effecting Options Trades receives disclosure upon entering into the agreement by which it establishes an account relating to the TBFO System that includes:

(a) a statement that there may be difficulty in enforcing any legal rights against UBS LLC, or any of its directors, officers or employees because they are resident outside of Canada and all or substantially all of their assets are situated outside of Canada; and

(b) a risk disclosure statement that complies with legislative requirements applicable to UBS LLC in the United States, and provides substantially similar disclosure to that required under Appendix B to the Rule.

AND IT IS ORDERED pursuant to section 211 of the Regulation that UBS LLC is exempt from the restrictions contained in subsection 208(1) of the Regulation so long as:

1. Option Trades are made only in compliance with subsection 208(1) as it would apply if "Institutional Investor" replaced "designated institution" wherever appearing and international dealers were permitted to trade Options traded on the Bourse de Montreal; and

2. Futures Trades are made only in compliance with subsection 208(1) as it would apply if "Institutional Investor" replaced "designated institution" wherever appearing.

AND IT IS ORDERED pursuant to section 6.1 of the Rule that section 3.1 of the Rule does not apply to the Applicants in respect of Options Trades, provided that UBS LLC continues to be permitted to trade options in the United States.

"Paul M. Moore"

"Carol S. Perry"

"Randee B. Pavalow"

Appendix 1

INSTITUTIONAL INVESTORS

In this order, "Institutional Investor" means:

(a) a bank listed in Schedule I or II of the Bank Act (Canada), or an authorized foreign bank listed in Schedule III of that Act;

(b) the Business Development Bank incorporated under the Business Development Bank Act (Canada);

(c) a loan corporation, trust corporation, savings company or loan and investment society registered under the Loan and Trust Corporations Act (Ontario) or under the Trust and Loan Companies Act (Canada), or under comparable legislation in any other province of Canada;

(d) a co-operative credit society, credit union central, federation of caisses populaires, credit union or league, or regional caisse populaire, or an association under the Cooperative Credit Associations Act (Canada), in each case, located in Canada;

(e) a company licensed to do business as an insurance company in a province of Canada;

(f) a subsidiary of any company referred to in paragraph (a), (b), (c), (d) or (e), where the company owns all of the voting shares of the subsidiary;

(g) a federation within the meaning of the Act respecting Financial Services Cooperatives (Quebec);

(h) the Caisse centrale Desjardins du Québec established under the Act respecting the Movement des Caisses Desjardins (Quebec);

(i) a person or company registered under the securities legislation of the applicable province of Canada as an adviser or dealer, other than a limited market dealer;

(j) the government of Canada or of any jurisdiction, or any crown corporation, instrumentality or agency of a Canadian federal, provincial or territorial government;

(K) any Canadian municipality or any Canadian provincial or territorial capital city;

(l) any national, federal, state, provincial, territorial or municipal government of or in any foreign jurisdiction, or any instrumentality or agency thereof;

(m) a pension fund that is regulated by either the Office of the Superintendent of Financial Institutions (Canada) or a provincial pension commission or similar regulatory authority;

(n) a registered charity under the Income Tax Act (Canada);

(o) a company, limited partnership, limited liability partnership, trust or estate, other than a mutual fund or non-redeemable investment fund, that had net assets of at least Cdn.$5,000,000 as reflected in its most recently prepared financial statements;

(p) a person or company, other than an individual, that is recognized by the Ontario Securities Commission as an "accredited investor";

(q) a mutual fund or non-redeemable investment fund that, in the applicable province of Canada, distributes its securities only to persons or companies that are accredited investors;

(r) a mutual fund or non-redeemable investment fund that, in the applicable province of Canada, distributes its securities under a prospectus for which a receipt has been granted;

(s) an account that is fully managed by a registered portfolio manager or an entity listed in paragraphs (a), (c), (d) or (e);

(t) an entity organized outside of Canada that is analogous to any of the entities referred to in paragraphs (a) through (f) and paragraph (m) in form and function; and

(u) a person or company in respect of which all of the owners of interests, direct or indirect, legal or beneficial, are persons or companies that are Institutional Investors; provided that:

(i) two or more persons who are the joint registered holders of one or more securities of the issuer shall be counted as one beneficial owner of those securities; and

(ii) a corporation, partnership, trust or other entity shall be counted as one beneficial owner of securities of the issuer unless the entity has been created or is being used primarily for the purpose of acquiring or holding securities of the issuer, in which event each beneficial owner of an equity interest in the entity or each beneficiary of the entity, as the case may be, shall be counted as a separate beneficial owner of those securities of the issuer.

Appendix 2

Bloomberg Tradebook Futures and Options System

Canada Participant Order Flow

Futures and Options on Futures

Notes

A: order and, if applicable, give-up instructions

B1: confirmation of matched trade for full service clients of UBS Securities LLC

B2: confirmation of matched trade for execution-only clients of UBS Securities LLC

• Participants do not have direct access to any exchanges, including non-Canadian exchanges, because orders will always be routed through UBS Securities LLC as a broker and in the name of an exchange member. UBS Securities LLC, or a Non-UBS Clearing Broker, as defined below (if UBS Securities LLC is not acting as the clearing broker), is responsible to the exchange for payment and delivery in connection with all Participant trades.

As a technical matter, orders from the Bloomberg Tradebook Futures and Options System can go to exchanges in three ways:

First, UBS maintains electronic links to certain exchanges.

Second, Bloomberg L.P., the parent of Bloomberg Tradebook U.S., maintains an electronic link to certain exchanges. Participants may route orders via those links to an exchange in the name of UBS Securities LLC without technical intervention by UBS Securities LLC.

Third, where neither of Bloomberg L.P. nor UBS Securities LLC maintains an electronic link to an exchange, orders would be routed by UBS Securities LLC to a local exchange member.

•• A clearing broker, whether UBS Securities LLC or another entity (identified on the chart as the "Non-UBS Clearing Broker"), is chosen by Participants and has a contractual relationship with Participants and/or their customers that is established separately from the Bloomberg Tradebook Futures and Options System.

When UBS Securities LLC performs only the execution of a Participant's order and "gives-up" the transaction for clearance to a Non-UBS Clearing Broker, the Non-UBS Clearing Broker is required to comply with the rules of the exchanges of which it is a member and any relevant regulatory requirements, which may include know-your-customer obligations, account opening, suitability, anti-money laundering checks, credit checks, delivery of confirmation statements, clearing deposits, initial and maintenance margins, custody of Participants' funds and interaction with the relevant clearing corporation. Non-UBS Clearing Brokers will represent to UBS Securities LLC in a give-up agreement that they will perform their obligations in accordance with applicable laws, governmental, regulatory, self-regulatory, exchange and clearing house rules and the customs and usages of the exchange or clearing house on which Participants' orders are executed and cleared. Non-UBS Clearing Brokers located in the United States are registered with the U.S. CFTC.

••• UBS Securities LLC may use a local exchange member for execution and/or clearance on its behalf of Participants' orders on the exchange. A local exchange member has no relationship with Participants and UBS Securities LLC remains responsible to Participants for the execution and/or clearance of Participants' orders.

(- - -) Dotted line denotes alternative entities and steps.

Appendix 3

Bloomberg Tradebook Futures and Options System

Canada Participant Order Flow

Options on Securities

Notes

A: order and, if applicable, give-up instructions

B1: confirmation of matched trade for full service clients of UBS Securities LLC

B2: confirmation of matched trade for execution-only clients of UBS Securities LLC

† Participants do not have direct access to any exchanges, including non-Canadian exchanges, because orders will always be routed through UBS Securities LLC as a broker and in the name of an exchange member. UBS Securities LLC, or a Non-UBS Clearing Broker, as defined below (if UBS Securities LLC is not acting as the clearing broker), is responsible to the exchange for payment and delivery in connection with all Participant trades.

As a technical matter, orders from the Bloomberg Tradebook Futures and Options System can go to exchanges in three ways:

First, UBS maintains electronic links to certain exchanges.

Second, Bloomberg L.P., the parent of Bloomberg Tradebook (Bermuda) Ltd., maintains an electronic link to certain exchanges. Participants may route orders via those links to an exchange in the name of UBS Securities LLC without technical intervention by UBS Securities LLC.

Third, where neither of Bloomberg L.P. nor UBS Securities LLC maintains an electronic link to an exchange, orders would be routed by UBS Securities LLC to a local exchange member.

†† A clearing broker, whether UBS Securities LLC or another entity (identified on the chart as the "Non-UBS Clearing Broker"), is chosen by Participants and has a contractual relationship with Participants and/or their customers that is established separately from the Bloomberg Tradebook Futures and Options System.

When UBS Securities LLC performs only the execution of a Participant's order and "gives-up" the transaction for clearance to a Non-UBS Clearing Broker, the Non-UBS Clearing Broker is required to comply with the rules of the exchanges of which it is a member and any relevant regulatory requirements, which may include know-your-customer obligations, account opening, suitability, anti-money laundering checks, credit checks, delivery of confirmation statements, clearing deposits, initial and maintenance margins, custody of Participants' funds and interaction with the relevant clearing corporation. Non-UBS Clearing Brokers will represent to UBS Securities LLC in a give-up agreement that they will perform their obligations in accordance with applicable laws, governmental, regulatory, self-regulatory, exchange and clearing house rules and the customs and usages of the exchange or clearing house on which Participants' orders are executed and cleared. Non-UBS Clearing Brokers located in the United States are registered with the U.S. CFTC.

††† UBS Securities LLC may use a local exchange member for execution and/or clearance on its behalf of Participants' orders on the exchange. A local exchange member has no relationship with Participants and UBS Securities LLC remains responsible to Participants for the execution and/or clearance of Participants' orders.

(- - -) Dotted line denotes alternative entities and steps.