Securities Law & Instruments

Headnote

National Policy 11-203 Process for Exemptive Relief Applications in Multiple Jurisdictions -- section 4.1 of National Instrument 31-103 Registration Requirements and Exemptions -- an individual registered with a firm prohibited from acting as an officer, partner or director of another registered firm that is not an affiliate of the first mentioned firm -- the individual was a director of the other registered firm prior to NI31-103 coming into force -- policies in place to handle potential conflicts of interest -- Filer exempted from prohibition.

Applicable Legislative Provisions

Multilateral Instrument 11-102 Passport System, s. 4.7.

National Instrument 31-103 Registration Requirements and Exemptions, ss. 4.1, 15.1.

July 4, 2011

IN THE MATTER OF

THE SECURITIES LEGISLATION OF

ONTARIO

(the Jurisdiction)

AND

IN THE MATTER OF

THE PROCESS FOR EXEMPTIVE RELIEF

APPLICATIONS IN MULTIPLE JURISDICTIONS

AND

IN THE MATTER OF

EAMONN BRIAN MCCONNELL

(the Filer)

DECISION

Background

The principal regulator in the Jurisdiction has received an application from the Filer for a decision under the securities legislation of the Jurisdiction of the principal regulator (the Legislation) for an exemption (the Exemption Sought) from section 4.1 of National Instrument 31-103 Registration Requirements and Exemptions (NI 31-103) to permit the Filer to be a dealing and/or an advising representative of Manna Asset Management Inc. or of Kensington Capital Advisors Inc. while also acting as a director of Desautels Capital Management Inc.

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

(a) The OSC is the principal regulator for this application and

(b) The Filer has provided notice that section 4.7(1) of Multilateral Instrument 11-102 Passport System (MI 11-102) is intended to be relied upon in Quebec.

Interpretation

Terms defined in National Instrument 14-101 Definitions, MI 11-102 and NI 31-103 have the same meaning if used in this decision, unless otherwise defined.

The following terms shall have the following meanings:

1. Act means the Securities Act (Ontario).

2. AMF means the Autorité des marchés financiers du Quebéc.

3. Desautels means Desautels Capital Management Inc., a registered adviser, investment fund manager and exempt market dealer in the province of Québec and a registered exempt market dealer in the province of Ontario.

4. KCAI means Kensington Capital Advisors Inc., a registered adviser and exempt market dealer in Ontario and a registered adviser in Québec.

5. OSC means the Ontario Securities Commission.

6. Manna means Manna Asset Management Inc., a registered adviser and exempt market dealer in the provinces of Ontario, Alberta and Québec.

Representations

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

1. The Filer lives in Toronto, Ontario.

2. The Filer is and, since July 2009, has been registered in the provinces of Ontario, Alberta and Québec, as the ultimate designated person, an advising representative and a dealing representative of Manna. The Filer is also a shareholder of Manna. The OSC is the principal regulator of Manna.

3. Since August 2009, the Filer has also been a director of Desautels. The AMF is Desautels' principal regulator.

4. Desautels was established by the Faculty of Management at McGill University, as a hands-on educational facility that allows students to participate as research analysts in an operating "real-life" investment firm. Desautels manages two investment funds, with institutional and high net worth investors.

5. The Filer is a graduate of McGill University and given his professional and educational background agreed to foster the work of the Faculty of Management and Desautels by being a member of the board of directors of Desautels.

6. The Filer's involvement with Desautels is pro bono and involves participating at board of directors meetings and meeting with students. He estimates that he spends around an hour a month on Desautels' duties. The Filer is not involved in any investment decisions or other operational or day-to-day decisions made for Desautels.

7. In late April 2011, the shareholders of Manna, including the Filer, agreed to sell their shares to Kensington Capital Partners Ltd. (KCPL). This share purchase is the subject of a notice filed with the Alberta, Ontario and Québec securities regulators pursuant to section 11.10 of NI 31-103. The OSC, the AMF and the Alberta Securities Commission issued a notice of non-objection to this share purchase pursuant to a notice filed by KCPL pursuant to section 11.10 of NI 31-103. KCPL is the parent company of KCAI. In September 2010, KCAI applied to be registered as an investment fund manager with the OSC, and to extend its registration as an exempt market dealer in the provinces of Alberta, British Columbia, Manitoba, Québec and Saskatchewan.

8. Upon the closing of the share purchase, Manna will become a wholly owned subsidiary of KPCL and an affiliate of KCAI. The Filer has agreed with KPCL to apply to transfer his registration as an advising representative to become an advising representative of KCAI, instead of an advising representative of Manna. The Filer will remain the ultimate designated person of Manna. These relationships will be permitted under section 4.1 of NI 31-103, given the affiliated status of Manna and KCAI.

9. The Filer's directorship duties with Desautels do not conflict with his duties at Manna nor will they conflict with his proposed duties at KCAI. The Filer's directorship duties do not create any conflicts of interest for the Filer or for Manna, nor will they create any conflicts of interest for KCAI, given that the Filer is not involved in any investment decision-making for Desautels and the fact that Desautels primarily operates as an educational investment firm for students of McGill's Faculty of Management.

Decision

The principal regulator is satisfied that the decision meets the test set out in the Legislation for the principal regulator to make the decision.

The decision of the principal regulator under the Legislation is that the Exemption Sought is granted.

The decision shall cease to be effective when:

1. The Filer is no longer a director of Desautels or

2. The Filer is not registered in any jurisdiction as a dealing or an advising representative of either Manna or KCAI

"Erez Blumberger"
Deputy Director, Compliance and Registrant Regulation
Ontario Securities Commission