TD Securities Inc. and TD Waterhouse Canada Inc.

Headnote

Under paragraph 4.1(1)(b) of National Instrument 31-103 Registration Requirements, Exemptions and Ongoing Registrant Obligations a registered firm must not permit an individual to act as a dealing, advising or associate advising representative of the registered firm if the individual is registered as a dealing, advising or associate advising representative of another registered firm. The Filers are affiliated entities and have valid business reasons for the individuals to be registered with both firms. The Filers have policies in place to handle potential conflicts of interest. The Filers are exempted from the prohibition for current and future dealing representatives.

Applicable Legislative Provisions

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

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

December 17, 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

TD SECURITIES INC. (TDSI)

AND

TD WATERHOUSE CANADA INC.

(TD Waterhouse, and, together with TDSI, the Filers)

DECISION

Background

The principal regulator in the Jurisdiction has received an application from the Filers for a decision under the securities legislation of the Jurisdiction of the principal regulator (the Legislation) for relief, pursuant to section 15.1 of National Instrument 31-103 Registration Requirements, Exemptions and Ongoing Registrant Obligations (NI 31-103), from the requirement in paragraph 4.1(1)(b) of NI 31-103 to permit current and future individuals (collectively, the Representatives) to each be registered as both a dealing representative of TDSI and a dealing representative of TD Waterhouse (the Dual Registration) (the Exemption Sought).

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

(a) the Ontario Securities Commission is the principal regulator for this application, and

(b) the Filers have provided notice that section 4.7(1) of Multilateral Instrument 11-102 Passport System (MI 11-102) is intended to be relied upon by the Filers in each jurisdiction of Canada outside of Ontario (together with Ontario, the 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

The decision is based on the following facts represented by the Filers:

1. TDSI is a corporation incorporated under the laws of the Province of Ontario. The head office of TDSI is located in Toronto, Ontario.

2. TDSI is wholly-owned subsidiary of The Toronto-Dominion Bank (TD Bank).

3. TDSI is registered as a dealer in every jurisdiction of Canada in the category of investment dealer; it is a member of the Investment Industry Regulatory Organization of Canada (IIROC) and the TSX Venture Exchange; it is an approved participant of the Montreal Exchange (ME) and it is a participation organization of The Toronto Stock Exchange (TSX).

4. TD Waterhouse is a corporation incorporated under the laws of the Province of Ontario. The head office of TD Waterhouse is located in Toronto, Ontario.

5. TD Waterhouse is a wholly-owned subsidiary of TD Bank.

6. TD Waterhouse is registered as a dealer in every jurisdiction of Canada in the category of investment dealer. It is a member of IIROC and it is an approved participant of the ME.

7. As members of IIROC, and affiliates of each other, each of TD Waterhouse and TDSI has cross-guaranteed the obligations of the other to their respective clients in accordance with IIROC Rule 6.6.

8. For various business and other reasons, TD Bank has historically caused, and continues to require, its securities brokerage business to be conducted through two registrants, whereby its retail brokerage business is conducted through TD Waterhouse and its institutional brokerage business is conducted through TDSI.

9. TDSI has a client base that is currently limited to institutional customers as defined in IIROC Rule 1 which includes very sophisticated clients that do not include natural persons.

10. TD Waterhouse has a client base that is generally limited to retail customers as defined in IIROC Rule 1, specifically meaning a customer that is not an "institutional customer".

11. TD Waterhouse operates an Institutional Services division (TDWIS) that provides brokerage and custody services to certain institutional customers that meet the definition of "institutional customer" in IIROC Rule 1. TDWIS provides brokerage services to approximately 200 registered portfolio managers and provides custody services to their managed accounts and the segregated accounts of their clients which these portfolio managers manage on a fully discretionary and segregated basis.

12. TDSI operates a fixed income distribution desk that offers fixed income products and trade execution services to institutional customers including registered portfolio managers and other registered investment dealers for their retail customers. TDSI proposes to dually register certain TDSI Representatives with TD Waterhouse so that they can act on behalf of the TDWIS clients. Such Representatives have, or will have, extensive experience providing fixed income products and trade execution services to institutional customers. The Representatives will only deal with TDWIS' institutional customers; all of which are registrants of IIROC and/or CSA jurisdictions. There are no high net worth individuals or other institutional corporate accounts which qualify as institutional within TDWIS. TDSI will also not provide trade execution services directly to individual retail customers.

13. The Representatives are, or will be, approved by IIROC solely as registered representatives, as defined by IIROC, with the product type of "securities" and customer type of "institutional only".

14. The Representatives are, or will be, under the direct supervision and control of both Filers and they are, or will be, subject to all securities-related conflicts of interest policies and procedures of both Filers.

15. The Dual Registration will not be a source of any client confusion or conflicts of interest because:

(a) when acting on behalf of TD Waterhouse, the Representatives will only trade with the institutional customers of TDWIS;

(b) when acting on behalf of TD Waterhouse, the Representatives do not, and will not, provide advice, and all trading orders received by the Representatives will be unsolicited;

(c) when acting on behalf of TDSI, the Representatives do not, and will not, provide advice, and the trading orders received by the Representatives will be unsolicited;

(d) prior to conducting dealing activities on behalf of a TD Waterhouse client, the Representatives will provide written notice to the TD Waterhouse client of their dual registration with both TDSI and TD Waterhouse; and

(e) the Representatives shall act in the best interests of both their TDSI clients and their TD Waterhouse clients and deal fairly, honestly and in good faith.

16. TDWIS' institutional customers have requested access to the products and trade execution services offered by the Representatives on the TDSI fixed income distribution desk. TDSI's competitors, which conduct both retail and institutional brokerage services within a single registered dealer, currently provide such brokerage and custody services without requiring an exemption from the dual registration restriction.

17. TDSI's fixed income distribution desk is dedicated to providing fixed income products and trade execution services to institutional customers and is, and will be, staffed by a sufficient number of Representatives to handle expected trade volumes at all times. Accordingly, the Representatives will have sufficient time to adequately serve each firm and its clients.

18. TDSI and TD Waterhouse currently have individuals dually registered as representatives with both registrants having previously received an exemption in connection with TDSI offering prime brokerage services to accredited investor clients of TD Waterhouse. Pursuant to the grandfathering provision in section 4.1(2) of NI 31-103, the dual registration restriction in section 4.1(1)(b) does not apply to these dually registered employees.

19. In the absence of the Exemption Sought, the Filers would be prohibited from permitting a Representative to act as a dealing representative of TD Waterhouse while the individual is a dealing representative of TDSI even though TD Waterhouse is an affiliate of TDSI.

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 provided that:

(a) each Representative, when acting as a dealer by trading securities on behalf of TD Waterhouse, is limited to acting as a dealer for the institutional customers of TDWIS only;

(b) each Representative will not act as a dealer by trading securities for any retail customer; and

(c) Institutional clients of TDWIS will never be clients of both TDWIS and TDSI.