Scotia Capital (USA) Inc. and Scotia Capital Inc. - s. 3.1 of OSC Rule 31-501 Registrant Relationships and s. 127(2)(h) of the Regulation

Order

Headnote

Order pursuant to subsection 3.1 of the OSC Rule 31-501 Registrant Relationships and section 127(2)(h) of the Regulation, exempting the applicants representatives who are currently registered with the Commission from the prohibition against dual registration contained in section 1.1 of Rule 31-501 and section 127(1) of the Regulation, in order that they may be concurrently registered as salespersons or trading officers with both the Applicant and Scotia Capital Inc., subject to conditions and restrictions.

IN THE MATTER OF

THE SECURITIES ACT,

R.S.O. 1990, CHAPTER S.5,

AS AMENDED (the Act)

AND

IN THE MATTER OF

R.R.O. 1990, REGULATION 1015,

AS AMENDED (the Regulation)

AND

IN THE MATTER OF

SCOTIA CAPITAL (USA) INC.

AND

SCOTIA CAPITAL INC.

 

ORDER

(Section 3.1 of the Ontario Securities Commission

Rule 31-501 and Section 127(2)(h) of the Regulation)

UPON the application (the Application) of Scotia Capital (USA) Inc. (the Applicant), to the Ontario Securities Commission (the Commission or OSC) for an order pursuant to subsection 3.1 of the OSC Rule 31-501 Registrant Relationships (Rule 31-501) and section 127(2)(h) of the Regulation, providing that certain representatives of the Applicant (the Representatives) who are resident in the Province of Ontario and who are currently registered with the Commission as salespersons of Scotia Capital Inc., be exempt from the prohibition against dual registration contained in section 1.1 of Rule 31-501 and section 127(1) of the Regulation, in order that they may be concurrently registered as salespersons or trading officers with both the Applicant and Scotia Capital Inc.;

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

AND UPON the Applicant having represented to the Commission that:

1. The Applicant is a corporation incorporated under the laws of the State of New York, with its principal place of business located in New York, New York, U.S.

2. The Applicant is a wholly-owned subsidiary of Scotia Capital Inc. and is an indirect wholly-owned subsidiary of The Bank of Nova Scotia.

3. Scotia Capital Inc. is registered under the Act as a dealer in the category of investment dealer and is a member of the Investment Dealers Association of Canada.

4. The Applicant is registered under the Act as a dealer in the category of non-resident limited market dealer.

5. The Applicant is also registered as a broker-dealer with the U.S. Securities and Exchange Commission and is a member of the National Association of Securities Dealers, Inc. (NASD).

6. The Applicant maintains a branch office in Toronto, Ontario (the Toronto Branch), in which the Representatives work.

7. The Representatives are currently registered with the Commission as salespersons or trading officers of Scotia Capital Inc., in order to provide trading services to institutional clients of Scotia Capital Inc. that are resident in the Province of Ontario.

8. The Representatives in the Toronto Branch will also act on behalf of the Applicant in respect of providing trading services to institutional investors who are resident and/or located in the United States (US Clients).

9. The Representatives are, or will also be, registered with NASD as general securities representatives of the Applicant.

10. The Representatives will, on behalf of the Applicant, act in respect of US Clients only.

11. The Representatives will not, on behalf of the Applicant, solicit or contact clients that are resident or located in the Province of Ontario.

12. For the purposes of maintaining their status as representatives of the Applicant, the Representatives are under the supervision and control of the Applicant and are subject to all securities-related and conflicts of interest policies and procedures of the Applicant, in addition to being under the supervision and control of Scotia Capital Inc. and subject to Scotia Capital Inc.'s securities-related policies and procedures including conflicts of interest policies.

13. There will be no conflict of interest arising from the Representatives' duties and responsibilities at Scotia Capital Inc. and at the Applicant, as each dealer registrant carries on different lines of business activity within their affiliated corporate group controlled by The Bank of Nova Scotia.

14. The Representatives who act on behalf of the Applicant in respect of trades with or on behalf of US Clients will comply with all applicable requirements of US securities law.

IT IS ORDERED THAT subsection 3.1 of Rule 31-501 shall not apply to the Representatives acting on behalf of the Applicant, in acting as a dealer to US Clients as described above,

IT IS FURTHER ORDERED THAT pursuant to section 127(2)(h) of the Regulation the Director finds that the activities of the Representatives acting on behalf on the Applicant will not interfere with the Representatives' duties or responsibilities to Scotia Capital Inc. and such activities will not create any conflicts of interests, provided that:

(a) the only trading activities to be performed by the Representatives on behalf of the Applicant will be with persons or companies that are resident in the U.S.;

(b) the Representatives will not trade on behalf of a person or company that is resident in the U.S. if the trade is being made to another person or company that is resident in Ontario;

(c) the trading activities and duties and responsibilities to be carried out by the Representatives on behalf of the Applicant do not interfere with the Representatives' duties or responsibilities at Scotia Capital Inc.; and

(d) the Applicant and the Representatives will comply with applicable US securities laws in respect of all trading activities performed on behalf of US Clients by the Applicant and the Representatives.

February 24, 2006

"David M. Gilkes"
Manager, Registrant Regulation