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Bridgewater Associates, LP
Headnote
National Policy 11-203 Process for Exemptive Relief Applications in Multiple Jurisdictions -- Relief granted from section 12.13 of National Instrument 31-103 Registration Requirements and Exemptions -- Registrant exempted from delivering its annual financial statements and corresponding Form 31-103F1 to the regulator within 90 days following the end of its 2011 financial year. -- Change in auditors caused a delay in filing despite diligent efforts by the registrant and its new audit firm. -- Unique situation which is not likely to reoccur.
Applicable Legislative Provisions
Multilateral Instrument 11-102 Passport System, s. 4.7.
National Instrument 31-103 Registration Requirements and Exemptions, ss. 12.13, 15.1.
March 26, 2012
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
BRIDGEWATER ASSOCIATES, LP
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 for the Filer from the requirement contained in section 12.13 of National Instrument 31-103 Registration Requirements, Exemptions and Ongoing Registrant Obligations (NI 31-103) to permit the Filer to file its audited financial statements and completed form 31-103F1 Calculation of Excess Working Capital within 150 days after the end of its financial year, rather than within 90 days after its year end (the Exemption Sought).
Under the Process for Exemptive Relief Applications in Multiple Jurisdictions (for a passport application):
(a) The Ontario Securities Commission (the Commission) is the principal regulator for this application; and
(b) The Filer hereby gives notice that subsection 4.7(1) of Multilateral Instrument 11-102 Passport System (MI 11-102) is intended to be relied upon in British Columbia and Quebec (the Non-principal Jurisdictions or together with the Jurisdiction, the Filing Jurisdictions).
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 is a limited partnership organized under the laws of Delaware, United States.
2. The Filer is engaged in advising in respect of the buying and selling of securities, primarily to institutional investors. The Filer is registered as an investment adviser with the United States Securities and Exchange Commission (SEC), a commodity trading adviser and commodity pool operator with the U.S. Commodity Futures Trading Commission and an investment adviser with the Australian Securities and Investments Commission. In Canada, the Filer is registered as an adviser in the category of portfolio manager in Ontario, British Columbia and Quebec and as an adviser in the category of commodity trading manager in Ontario.
3. The Filer is a non-resident of Canada, and as such does not maintain a business office from which it provides advice nor financial records anywhere in Canada.
4. The SEC, the Filer's securities regulator in its home jurisdiction, does not require that registrants, such as the Filer, file audited financial statements.
5. The Filer is not, to the best of its knowledge, in default of any requirement of securities legislation in any of the Filing Jurisdictions.
6. The Filer has significant excess working capital.
7. The Filer's year end is December 31 (Year End).
8. The Filer changed audit firms in November 2011 and the new auditors began their initial audit on November 15, 2011, as soon as possible after their engagement was finalized.
9. As a result of the nature of the initial audit, the Filer's auditors have encountered unexpected delays in preparing the Filer's 2011 audited financial statements. Such unexpected delays have related to the volume of customized work and testing required by the complexity of the Filer's business and operations, in this first year of the Filer's auditors' engagement in order that the Filer's auditors may familiarize and acclimate themselves to the Filer's history and operations. Such issues have included considerations relating to:
(a) the consolidation of the audit of the funds managed by the Filer to determine whether these should be consolidated with the audit of the Filer;
(b) accounting treatment for certain compensation arrangements;
(c) the volume of corporate accounting issues and new transactions that require significant accounting research, analysis and judgment; and
(d) valuation issues relating to the fact that the Filer is not publicly traded and comparable benchmarks are not readily available.
10. Given the sheer volume of work and scope of this first year's audit for the Filer involving multiple jurisdictions, the audited financial statements for the Filer will not be completed by the filing deadline contained in NI 31-103, despite diligent efforts on the part of the Filer and its auditors. In particular, the Filer and its auditors commenced the audit work as early as possible after their engagement was finalized and the Filer acted diligently in disclosing to the Commission the events that are the cause of the delay well in advance of the filing deadline.
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 to the Filer provided that the Filer:
(i) files its audited financial statements with the Commission within 150 days of the Filer's Year End; and
(ii) pays any late filing fees associated with the delay in filing audited financial statements with the Commission up until the date that this Decision document is issued.
"Marrianne Bridge"
Deputy Director, Compliance and Registrant Regulation
Ontario Securities Commission