Desjardins Securities Inc.

Headnote

A large investment dealer owned by a financial group with separate Capital Market and Brokerage and Private Client services divisions and de facto co-CEOs exempted from requirements to register a single ultimate designated person (UDP) -- permitted to register two UDPs one for each operating division.

Statutes Cited

National Instrument 31-103 Registration Requirements and Exemptions, s. 11.2.

June 21,2011

IN THE MATTER OF

THE SECURITIES LEGISLATION OF

QUEBEC AND ONTARIO

(the Jurisdictions)

AND

IN THE MATTER OF

THE PROCESS FOR EXEMPTIVE RELIEF

APPLICATIONS IN MULTIPLE JURISDICTIONS

AND

IN THE MATTER OF

DESJARDINS SECURITIES INC.

(the Filer)

DECISION

Background

The securities regulatory authority or regulator in each of the Jurisdictions (Decision Maker) has received an application from the Filer for a decision under the securities legislation of the Jurisdictions (the Legislation) for an exemption for the Filer from the requirement contained in section 11.2 of National Instrument 31-103 Registration Requirements and Exemptions (NI 31-103) to designate an individual to be the ultimate designated person (UDP) and instead be permitted to designate and register two individuals as UDP in respect of two distinct lines of securities business of the Filer (the Exemption Sought).

Under the Process for Exemptive Relief Applications in Multiple Jurisdictions (for a dual application):

a) the Autorite des marches financiers is the principal regulator for this application;

b) the Filer has provided notice that subsection 4.7(1) of Multilateral Instrument 11-102 Passport System (MI 11-102) is intended to be relied upon in all of the jurisdictions in Canada outside of Quebec and Ontario (the Non-principal Jurisdictions, or together with the Jurisdictions, the Application Jurisdictions); and

c) the decision is the decision of the principal regulator and evidences the decision of the securities regulatory authority or regulator in Ontario.

Interpretation

Terms defined in National Instrument 14-101 Definitions and MI 11-102 have the same meaning if used in this decision, unless otherwise defined.

Representations

This decision is based on the following facts represented by the Filer:

1. The Filer has its head office in Quebec.

2. The Filer is registered under the Legislation in the category of investment dealer, is a member of the Investment Industry Regulatory Organization of Canada (IIROC).

3. The Filer is also registered as an investment dealer in each of the Non-Principal Jurisdictions.

4. The Filer is not, to the best of its knowledge, in default of any requirements of securities legislation in any of the Application Jurisdictions.

5 The Filer's business structure is organized as follows:

a) The Filer has two distinct divisions (each a Division) based on the nature of the client served - an institutional Division called "Capital Markets" and a retail Division called "Brokerage and Private Client Services".

b) The "Capital Markets" Division of the Filer forms part of the "Business and Institutional Services" sector of Desjardins Group. The "Capital Markets" Division consists of Fixed Income, Institutional Equities, Investment Banking and Research.

c) The "Business and Institutional Services" sector of Desjardins Group is also composed of units specialized in commercial lending to small, medium and large companies in addition to offering specialized services. These activities are conducted by affiliates of the Filer who are not members of 1IROC (and do not need to be because of the nature of their particular activities),

d) The "Business and Institutional Services" sector of Desjardins Group has its own support functions such as Finance and Treasury, Risk Management. Human Resources, Technology and Communications.

e) The Brokerage and Private Client Services" Division of the Filer forms part of the "Wealth Management and Life and Health Insurance' sector of Desjardins Group. The "Brokerage and Private Client Services" Division of the Filer carries out its activities principally in Quebec and Ontario. It provides advisory and self execution brokerage services and other wealth management related services to retail clients.

f) The "Wealth Management and Life and Health insurance" sector of Desjardins Group includes other activities in insurance of persons and manufacturing of products by affiliates of the Filer who are not members of IIROC (and do not need to be because of the nature of their specific activities).

g) The "Wealth Management and Life and Health Insurance" sector of Desjardins Group has its own support functions such as Finance and Treasury, Risk Management, Human Resources, Technology and Communications.

h) The "Capital Markets" Division and "Brokerage and Private Client Services" Division each have separate and distinct senior management structures. Although they are part of the same corporate entity (i.e. the Filer), each Division is functionally a stand-alone independent operation within Desjardins Group.

i) The head of each Division (Division Head) has equivalent roles to that of a Chief Executive Officer (CEO) in respect of the Division for which they are responsible Each Division Head reports independently to the President and CEO of Desjardins Group and each has access to the Filer's Board of Directors.

j) Each of the Division Heads has final authority to effect decisions in respect of their Division (subject to the approval by the Board of Directors of the Filer).

This decision is also based on the following facts represented by the Filer:

UDP Requirement

1. NI 31-103 was implemented on September 28, 2009 (the Implementation Date).

2. Under paragraph 11.2 (2) of NI 31-103, a registered firm is required to designate an individual to be the UDP (the UDP Requirement) and the UDP must be the CEO, or equivalent of the registered firm.

3. Designating only one of the Division Heads for purposes of satisfying the UDP Requirement would not be consistent with the policy objectives it is intended to achieve because the Division Heads are each effectively a CEO of their respective Divisions.

Decision

Each of the Decision Makers is satisfied that the decision meets the test set out in the Legislation for the Decision Maker to make the decision.

The decision of the Decision Makers under the Legislation is that the Exemption Sought is granted to the Filer provided that:

i) each Division shall have its own UDP, who shall be its Division Head. Superintendent, Client Services, Compensation and Distribution