Source: http://oscbulletin.carswell.com/bb/osc/bb/4036/on4036.htm
Timestamp: 2017-10-23 22:19:10
Document Index: 403450075

Matched Legal Cases: ['art 9', 'art 10', 'art 3', 'art 3', 'art 6', 'art 3']

OSCB 40/36
Issue 40/36 - September 07, 2017
Ont. Sec. Bull. Issue 40/36
• Earl Marek -- ss. 8, 21.7
• Khalid Walid Jawhari -- ss. 127(1), 127(10)
• David Gregor McClure -- ss. 127(1), 127(10)
• Earl Marek
• Khalid Walid Jawhari
• Hanane Bouji et al.
• David Gregor McClure
• Capital Research and Management Company -- s. 80 of the CFA
• ID Watchdog, Inc.
• Hanane Bouji et al. -- s. 8(3)
• Amendments to National Instrument 24-101 Institutional Trade Matching and Settlement
• TriAct Canada Marketplace LP -- Changes to the MATCHNow Trading System -- Notice of Approval
• CDCC -- Omnibus Amendments to Rule A and D-6 of CDCC's Rules as well as to the Operations Manual, Risk Manual and Default Manual, Introducing the Limited Clearing Members Category and Establishing Additional Recovery Power -- OSC Staff Notice of Request for Comment
• Goodfood Market Corp. -- s. 4(b) of Ont. Reg. 289/00 under the OBCA
Earl Marek -- ss. 8, 21.7
IN THE MATTER OF EARL MAREK
NOTICE OF HEARING (Sections 8 and 21.7 of the Securities Act, RSO 1990, c S.5)
TAKE NOTICE THAT the Ontario Securities Commission will hold a hearing pursuant to sections 8 and 21.7 of the Securities Act, RSO 1990, c S.5 at the offices of the Commission, located at 20 Queen Street West, 17th Floor, Toronto, Ontario on November 8, 2017, at 10:30 a.m., or as soon thereafter as the hearing can be held;
AND TAKE FURTHER NOTICE that the purpose of the hearing is to consider an application made by Earl Marek for a hearing and review of the following two decisions of the Investment Industry Regulatory Organization of Canada: the Decision on the Merits dated October 3, 2016 and the Penalty Decision dated February 27, 2017;
AND TAKE FURTHER NOTICE that the Notice of Hearing is also available in French on request, participation may be in either French or English and participants must notify the Secretary's Office in writing as soon as possible, and in any event, at least thirty (30) days before a hearing if the participant is requesting a proceeding to be conducted wholly or partly in French; and
DATED at Toronto, this 30th day of August, 2017
Khalid Walid Jawhari -- ss. 127(1), 127(10)
IN THE MATTER OF KHALID WALID JAWHARI
NOTICE OF HEARING (Subsections 127(1) and 127(10) of the Securities Act)
TAKE NOTICE THAT the Ontario Securities Commission (the Commission) will hold a hearing pursuant to subsections 127(1) and 127(10) of the Securities Act, RSO 1990, c S.5 (the Act), at the offices of the Commission, 20 Queen Street West, 17th Floor, commencing on September 26, 2017 at 11:30 a.m., or as soon thereafter as the hearing can be held;
1. against Khalid Walid Jawhari (Jawhari) that:
a. pursuant to paragraph 2 of subsection 127(1) of the Act, trading in any securities or derivatives by Jawhari cease until March 22, 2020, except that he may trade in securities in a single account, either in his own name or in the name of 1601590 Alberta Ltd. (1601590), through a registrant who has been given a copy of the Settlement Agreement and Undertaking between Jawhari and the Alberta Securities Commission dated March 22, 2017 (the Settlement Agreement) and a copy of the Order of the Commission in this proceeding, if granted; and
b. pursuant to paragraph 2.1 of subsection 127(1) of the Act, the acquisition of any securities by Jawhari cease until March 22, 2020, except that he may purchase securities in a single account, either in his own name or in the name of 1601590, through a registrant who has been given a copy of the Settlement Agreement and a copy of the Order of the Commission in this proceeding, if granted;
2. such other order or orders as the Commission considers appropriate.
BY REASON of the allegations set out in the Statement of Allegations of Staff of the Commission dated August 29, 2017, and by reason of the Settlement Agreement, and such additional allegations as counsel may advise and the Commission may permit;
AND TAKE FURTHER NOTICE that at the hearing on September 26, 2017 at 11:30 a.m., Staff will bring an application to proceed with the matter by written hearing, in accordance with Rule 11 of the Ontario Securities Commission Rules of Procedure (2014), 37 OSCB 4168 and section 5.1 of the Statutory Powers Procedure Act, RSO 1990, c S.22, and any party to the proceeding may make submissions in respect of the application to proceed by written hearing;
AND TAKE FURTHER NOTICE that the Notice of Hearing is also available in French on request of a party, participation may be in either French or English and participants must notify the Secretary's Office in writing as soon as possible, and in any event, at least thirty (30) days before a hearing if the participant is requesting a proceeding to be conducted wholly or partly in French; and
ET AVIS EST ÉGALEMENT DONNÉ PAR LA PRÉSENTE que l'avis d'audience est disponible en français sur demande d'une partie, que la participation à l'audience peut se faire en français ou en anglais et que les participants doivent aviser le Bureau du secrétaire par écrit le plut tôt possible et, dans tous les cas, au moins trente (30) jours avant l'audience si le participant demande qu'une instance soit tenue entièrement ou partiellement en français.
DATED at Toronto this 30th day of August, 2017.
David Gregor McClure -- ss. 127(1), 127(10)
IN THE MATTER OF DAVID GREGOR McCLURE
TAKE NOTICE THAT the Ontario Securities Commission (the Commission) will hold a hearing pursuant to subsections 127(1) and 127(10) of the Securities Act, RSO 1990, c S.5 (the Act), at the offices of the Commission, 20 Queen Street West, 17th Floor, commencing on September 26, 2017 at 12:00 p.m., or as soon thereafter as the hearing can be held;
1. against David Gregor McClure (McClure) that:
a. pursuant to paragraph 2 of subsection 127(1) of the Act, trading in any securities or derivatives by McClure cease until August 16, 2020, except trades in an RRSP, RESP or other such plans permitted under Canadian tax law where such plans are operated for his benefit, or for the benefit of any immediate member of his family, provided such trades are made through a registrant who has first been given a copy of the Settlement Agreement and Undertaking between McClure and the Alberta Securities Commission dated August 16, 2017 (the Settlement Agreement) and a copy of the Order of the Commission in this proceeding, if granted; and
b. pursuant to paragraph 2.1 of subsection 127(1) of the Act, the acquisition of any securities by McClure cease until August 16, 2020, except purchases in an RRSP, RESP or other such plans permitted under Canadian tax law where such plans are operated for his benefit, or for the benefit of any immediate member of his family, provided such purchases are made through a registrant who has first been given a copy of the Settlement Agreement and a copy of the Order of the Commission in this proceeding, if granted;
c. pursuant to paragraph 3 of subsection 127(1) of the Act, any exemptions contained in Ontario securities law do not apply to McClure until August 16, 2020;
d. pursuant to paragraph 7 of subsection 127(1) of the Act, McClure resign any positions that he holds as a director or officer of any issuer;
e. pursuant to paragraph 8 of subsection 127(1) of the Act, McClure be prohibited from becoming or acting as a director or officer of any issuer until August 16, 2020; and
f. pursuant to paragraph 8.5 of subsection 127(1) of the Act, McClure be prohibited from becoming or acting as a registrant, investment fund manager or promoter until August 16, 2020;
BY REASON of the allegations set out in the Statement of Allegations of Staff of the Commission dated August 31, 2017, and by reason of the Settlement Agreement, and such additional allegations as counsel may advise and the Commission may permit;
AND TAKE FURTHER NOTICE that at the hearing on September 26, 2017 at 12:00 p.m., Staff will bring an application to proceed with the matter by written hearing, in accordance with Rule 11 of the Ontario Securities Commission Rules of Procedure (2014), 37 OSCB 4168 and section 5.1 of the Statutory Powers Procedure Act, RSO 1990, c S.22, and any party to the proceeding may make submissions in respect of the application to proceed by written hearing;
DATED at Toronto this 31st day of August, 2017.
1. On August 16, 2017, David Gregor McClure (McClure or the Respondent) entered into a Settlement Agreement and Undertaking (the Settlement Agreement) with the Alberta Securities Commission (the ASC).
2. Pursuant to the Settlement Agreement, McClure agreed to certain undertakings and to be made subject to sanctions, conditions, restrictions or requirements within the province of Alberta.
4. McClure was a resident of Calgary, Alberta, and not registered as a dealer under section 75 of the Alberta Securities Act, RSA 2000 c S-4 (the Alberta Securities Act).
5. McClure was a director of Bedford Biofuels Inc. (Bedford) and exercised day-to-day control over the corporation's operations. Bedford was an Alberta corporation, incorporated on November 14, 2008.
6. McClure was a director of Bedford Biofuels Tana Delta Phase 1 Investment Corporation (Bedford Tana Delta) and exercised day-to-day control over the corporation's operations. Bedford Tana Delta was an Alberta corporation, incorporated on June 29, 2009.
7. McClure was the de facto director of Arts Without Borders Inc. (AWB) and exercised day-to-day control over the corporation's operations. AWB was an Alberta corporation, incorporated on July 20, 2010.
8. McClure was a director of Bella Bay Investments (Barbados) Inc. (Bella Bay) and exercised day-to-day control over the corporation's sales. Bella Bay was incorporated under the laws of Barbados on April 18, 2012.
Illegal Distributions -- Bedford
9. Bedford was incorporated for a legitimate business purpose. Its business plan involved the development of biofuel plantations in Kenya. No preliminary prospectus or prospectus was ever filed on behalf of Bedford.
10. Between November 14, 2008 and December 31, 2012, Bedford raised approximately $11,000,000 from investors for the development of its biofuel business in Kenya. A portion of this amount, $975,000, was raised by McClure by selling shares of Bedford to five investors resident in Alberta who did not qualify for any exemptions under the Alberta Securities Act. McClure raised $975,000 for Bedford from the five investors, contrary to the Alberta Securities Act.
Illegal Distributions -- Bedford Tana Delta
11. Bedford Tana Delta was incorporated to raise proceeds to finance the purchase of agricultural leases in Kenya for the cultivation of biofuels. Bedford Tana Delta was part of Bedford's business plan regarding the development of the Kenyan biofuel plantations.
12. Between February 1, 2010 and December 15, 2011, Bedford Tana Delta issued six Offering Memoranda. Bedford Tana Delta raised approximately $5,300,000 between February 1, 2010 and May 25, 2012. Although some of the investment monies were legitimately raised pursuant to the Offering Memoranda, McClure solicited, either himself or through employees he supervised, three investors resident in Alberta for Bedford Tana Delta. These investors were purportedly qualified as eligible investors under Alberta securities laws; however, these three investors did not, in fact, meet the criteria for the eligible investor exemption or for any exemptions under the Alberta Securities Act. McClure raised $72,000 for Bedford Tana Delta from the three investors, contrary to the Alberta Securities Act.
Unregistered Dealing and Illegal Distributions -- AWB
13. 1548715 Alberta Ltd. was incorporated in Alberta on July 20, 2010 and on March 10, 2011 changed its name to Arts Without Borders Inc. (AWB). AWB's purpose was to take any profits from leasing art to customers in Canada and use them to support micro-lending to Kenyan employees working on Bedford's biofuel plantations in Kenya. No preliminary prospectus or prospectus was ever filed on behalf of AWB.
14. McClure solicited five investors resident in Alberta for AWB, ostensibly relying on the employee and accredited investor exemptions under Alberta securities laws. These investors did not, in fact, qualify for any of these exemptions and no prospectus requirement exemption was available. McClure raised $125,000 for AWB from the five investors, contrary to the Alberta Securities Act.
Unregistered Dealing and Illegal Distributions -- Bella Bay
15. Bella Bay was created for the purpose of developing real estate properties in Honduras. No preliminary prospectus or prospectus was ever filed on behalf of Bella Bay in Alberta.
16. In 2012, McClure solicited three couples, resident in Alberta, to invest in Bella Bay. The Bella Bay investment included shares in the company, real estate in Honduras, and shares in Bedford. The investors did not qualify for any exemptions under the Alberta Securities Act, and no prospectus requirement exemption was available. McClure raised $200,000 for Bella Bay and Bedford from the sale of shares in Bella Bay and Bedford to the investors, contrary to the Alberta Securities Act.
Misleading or Untrue Statements Regarding Bedford
17. Bedford ran into difficulties with the implementation of its business plan in Kenya in 2011. McClure began to make efforts to sell the company. Starting in the fall of 2011, McClure, on behalf of Bedford, retained agents in Hong Kong to identify and solicit potential purchasers for Bedford.
18. McClure made representations to three investors resident in Alberta in late 2011 and early 2012 that Bedford was about to be sold to an Asian buyer for $70 to $80 million, and that the closing would take place in April 2012. McClure represented that Bedford needed further funds to close the sale. At the time of these representations no actual buyer for Bedford existed. No actual buyer for Bedford ever came forward and on January 31, 2013 Bedford filed an Assignment in Bankruptcy.
19. As a result of McClure's representations regarding the imminent sale of Bedford, a further $450,000 was raised for Bedford from the three investors.
20. Based on the Agreed Facts, McClure admits that he:
i. breached section 75(1) of the Alberta Securities Act by trading in the securities of AWB and Bella Bay without being registered to do so under Alberta securities laws and without an exemption from the registration requirement, as set out in paragraphs 14 and 16 above;
ii. breached section 110(1) of the Alberta Securities Act by distributing the securities of Bedford, Bedford Tana Delta, AWB, and Bella Bay without being registered to do so under Alberta securities laws and without filing a preliminary prospectus or a prospectus with the ASC's Executive Director and obtaining a receipt therefor, as set out in paragraphs 9 to 16 above; and
iii. breached section 92(4.1) of the Alberta Securities Act by making representations to investors regarding the purported sale of Bedford to Asian buyers that were materially misleading or untrue, as set out in paragraphs 18 and 19 above.
21. Pursuant to the Settlement Agreement, McClure agreed to certain undertakings and to be made subject to sanctions, conditions, restrictions or requirements within the province of Alberta:
i. McClure agreed and undertook to the ASC's Executive Director to:
(a) pay to the ASC the amount of $50,000 as settlement;
(b) pay to the ASC the amount of $30,000 for investigation and legal costs incurred by ASC Staff;
(c) resign all positions he may have as a director or officer of any issuer that relies on any exemptions contained in Alberta securities laws or that distributes securities to the public; and
(d) refrain for a period of three (3) years from the date of the Settlement Agreement from:
1. becoming or acting as a director or officer, or both, of any issuer that relies on any exemptions contained in Alberta securities laws or that distributes securities to the public;
2. trading in or purchasing any securities or derivatives except trades in an RRSP, RESP, or other such plans permitted under Canadian tax law where such plans are operated for his benefit, or for the benefit of any immediate member of his family, provided such trades are made through a registrant who has first been given a copy of the Settlement Agreement;
3. relying on any or all of the exemptions contained in Alberta securities laws;
4. engaging in any investor relations activities;
5. advising in securities or derivatives; and
6. acting in a management or consultative capacity in connection with activities in the securities market.
22. In the Settlement Agreement, the Respondent agreed to be made subject to sanctions, conditions, restrictions or requirements within the province of Alberta.
23. Pursuant to paragraph 5 of subsection 127(10) of the Act, an agreement with a securities regulatory authority, derivatives regulatory authority or financial regulatory authority, in any jurisdiction, to be made subject to sanctions, conditions, restrictions or requirements on a person or company may form the basis for an order in the public interest made under subsection 127(1) of the Act.
24. Staff allege that it is in the public interest to make an order against the Respondent.
25. Staff reserve the right to amend these allegations and to make such further and other allegations as Staff deem fit and the Commission may permit.
26. Staff request that this application be heard by way of a written hearing pursuant to Rules 2.6 and 11 of the Ontario Securities Commission Rules of Procedure.
DATED at Toronto, this 31st day of August, 2017.
TORONTO -- The Office of the Secretary issued a Notice of Hearing to consider an application made by Earl Marek for a hearing and review of the following two decisions of the Investment Industry Regulatory Organization of Canada: the Decision on the Merits dated October 3, 2016 and the Penalty Decision dated February 27, 2017.
The hearing will be held on November 8, 2017 at 10:30 a.m. on the 17th floor of the Commission's office located at 20 Queen Street West, Toronto.
A copy of the Application dated March 23, 2017, the Notice of Hearing dated August 30, 2017, and the Order dated August 30, 2017 are available at www.osc.gov.on.ca.
TORONTO -- The Office of the Secretary issued a Notice of Hearing pursuant to Subsections 127(1) and 127(10) of the Securities Act setting the matter down to be heard on September 26, 2017 at 11:30 a.m. or as soon thereafter as the hearing can be held in the above named matter. The hearing will be held at the offices of the Commission at 20 Queen Street West, 17th Floor, Toronto.
A copy of the Notice of Hearing dated August 30, 2017 and Statement of Allegations of Staff of the Ontario Securities Commission dated August 29, 2017 are available at www.osc.gov.on.ca.
Hanane Bouji et al.
IN THE MATTER OF HANANE BOUJI, GLOBAL RESP CORPORATION, and GLOBAL GROWTH ASSETS INC.
TORONTO -- The Commission issued an Order in the above named matter which provides that the Hearing and Review Application is dismissed and the Amended Registration Application is refused, with reasons to follow.
A copy of the Order dated September 5, 2017 is available at www.osc.gov.on.ca.
TORONTO -- The Office of the Secretary issued a Notice of Hearing pursuant to Subsections 127(1) and 127(10) of the Securities Act setting the matter down to be heard on September 26, 2017 at 12:00 p.m. or as soon thereafter as the hearing can be held in the above named matter. The hearing will be held at the offices of the Commission at 20 Queen Street West, 17th Floor, Toronto.
A copy of the Notice of Hearing dated August 31, 2017 and Statement of Allegations of Staff of the Ontario Securities Commission dated August 31, 2017 are available at www.osc.gov.on.ca.
Capital Research and Management Company -- s. 80 of the CFA
Section 80 of the Commodity Futures Act (Ontario) -- Foreign adviser exempted from the adviser registration requirement in paragraph 22(1)(b) of the Commodity Futures Act (Ontario) where such adviser acts as an adviser in respect of commodity futures contracts or commodity futures options (Contracts) for certain investors in Ontario who meet the definition of "permitted client" in National Instrument 31-103 Registration Requirements, Exemptions and Ongoing Registrant Obligations -- Contracts are primarily traded on commodity futures exchanges outside of Canada and primarily cleared outside of Canada.
Commodity Futures Act, R.S.O. 1990, c. C.20. as am., ss. 1(1), 22(1)(b) and 80.
IN THE MATTER OF THE COMMODITY FUTURES ACT, R.S.O. 1990, CHAPTER C.20, AS AMENDED (the CFA) AND IN THE MATTER OF CAPITAL RESEARCH AND MANAGEMENT COMPANY
UPON the application (the Application) of Capital Research and Management Company (the Applicant) to the Ontario Securities Commission (the Commission) for an order of the Commission, pursuant to section 80 of the CFA that the Applicant and any individuals engaging in, or holding themselves out as engaging in, the business of advising others as to trading in Contracts (as defined below) on the Applicant's behalf (the Representatives) be exempt, for a specified period of time, from the adviser registration requirement in paragraph 22(1)(b) of the CFA, subject to certain terms and conditions;
"NFA" means the National Futures Association of the United States;
"Permitted Client" means a client in Ontario that is a "permitted client", as that term is defined in section 1.1 of NI 31-103, except that for purposes of this Order such definition shall exclude a person or company registered under the securities or commodities legislation of a jurisdiction of Canada as an adviser or dealer;
"United States" means the United States of America; and
"United States Advisers Act" means the Investment Advisers Act of 1940 of the United States, as amended from time to time.
1. The Applicant is a company incorporated under the laws of the State of Delaware, United States. Its principal place of business is located in Los Angeles, California.
2. The Applicant engages in the business of an adviser with respect to securities and with respect to Contracts in the United States. The Applicant provides investment management services on a fully discretionary basis to its clients through funds and separately managed accounts across multiple strategies and financial instruments including Foreign Contracts.
3. The Applicant is currently (a) registered with the SEC as an investment adviser under the United States Advisers Act; (b) registered with the CFTC as a commodity pool operator and swap firm and exempt from registration as a commodity trading advisor; and (c) a member of the NFA.
7. The Applicant seeks to act as a discretionary commodity futures advisory manager for Canadian institutional investors that are Permitted Clients. The Applicant's advisory services to Permitted Clients would primarily include the use of specialized investment strategies employing Foreign Contracts.
10. To the best of the Applicant's knowledge, the Applicant confirms that there are currently no regulatory actions of the type contemplated by the Notice of Regulatory Action attached as Appendix "B".
(e) as at the end of the Applicant's most recently completed financial year, not more than 10% of the aggregate consolidated gross revenue of the Applicant, its affiliates and its affiliated partnerships (excluding the gross revenue of an affiliate or affiliated partnership of the Applicant if the affiliate or affiliated partnership is registered under securities legislation, commodity futures legislation or derivatives legislation of a jurisdiction of Canada) was derived from the portfolio management activities of the Applicant, its affiliates and its affiliated partnerships in Canada (which, for greater certainty, includes both securities-related and commodity-futures-related activities);
(h) the Applicant notifies the Commission of any regulatory action initiated after the date of this Order with respect to the Applicant or any predecessors or the specified affiliates of the Applicant by completing and filing Appendix "B" within 10 days of the commencement of each such action, provided that the Applicant may also satisfy this condition by filing with the Commission,
DATED at Toronto, Ontario, this 15th day of August, 2017.
IN THE MATTER OF THE SECURITIES LEGISLATION OF BRITISH COLUMBIA AND ONTARIO (the Jurisdictions) AND IN THE MATTER OF THE PROCESS FOR CEASE TO BE A REPORTING ISSUER APPLICATIONS AND IN THE MATTER OF ID WATCHDOG, INC. (the Filer)
Hanane Bouji et al. -- s. 8(3)
ORDER (Subsection 8(3) of the Securities Act, RSO 1990, c S.5)
WHEREAS on August 23, 2017, the Ontario Securities Commission (the "Commission") held a hearing at the offices of the Commission, located at 20 Queen Street West, 17th Floor, Toronto, Ontario in relation to an application (the "Hearing and Review Application") by Hanane Bouji, Global RESP Corporation ("Global RESP") and Global Growth Assets Inc. ("GGAI") (collectively, the "Applicants") to set aside a decision of a Director dated June 22, 2017 and to amend the registration of Hanane Bouji to include registration as the ultimate designated person for Global RESP and GGAI (the "Amended Registration Application").
ON READING the materials filed by Staff of the Commission and the Applicants and on hearing the oral evidence and the oral submissions of the representatives for Staff of the Commission and for the Applicants, all appearing in person;
IT IS ORDERED THAT the Hearing and Review Application is dismissed and the Amended Registration Application is refused, with reasons to follow.
Amendments to National Instrument 24-101 Institutional Trade Matching and Settlement
This Instrument came into force in all CSA jurisdictions on September 5, 2017.
1. National Instrument 24-101 Institutional Trade Matching and Settlement is amended by this Instrument.
(a) by replacing the definition of "clearing agency" with:
"clearing agency" means a recognized clearing agency that operates as a "securities settlement system" as defined in section 1.1 of National Instrument 24-102 Clearing Agency Requirements;,
(b) in the definition of "DAP/RAP trade" by,
(i) adding "in a security" immediately after "means a trade", and
(ii) replacing "made" with "completed" in paragraph (b),
(c) by repealing the definitions of "North American region" and "T+3", and
(d) in the definition of "T+2" by replacing "; " following "means the second business day following T" with ".".
3. Section 1.2 is amended by replacing subsection (2) with the following:
(2) For the purposes of this Instrument, in Québec, a clearing agency includes a clearing house and a settlement system within the meaning of the Securities Act (Québec)..
4. Paragraph 2.1(f) is replaced with the following:
(f) a purchase governed by Part 9, or a redemption governed by Part 10, of National Instrument 81-102 Investment Funds,.
(a) in subsection (1) by
(i) replacing "shall" with "must", and
(ii) adding "Eastern Time" after "12 p.m. (noon)", and
6. Section 3.2 is amended by replacing "shall" with "must".
7. Section 3.3 is amended
8. Sections 3.4 and 4.1 are amended by replacing "shall" with "must".
9. Section 5.1 is amended by replacing "through which trades governed by this Instrument are cleared and settled shall" with "must".
10. Sections 6.1 to 8.1 are amended by replacing "shall" with "must" wherever it appears.
11. Form 24-101F1 is amended by replacing the instructions before the heading "Exhibits" with the following:
Deliver this form for both equity and debt DAP/RAP trades together with Exhibits A, B and C pursuant to section 4.1 of the Instrument, covering the calendar quarter indicated above, within 45 days of the end of the calendar quarter if
(a) less than 90 per cent of the equity and/or debt DAP/RAP trades executed by or for you during the quarter matched within the time required in Part 3 of the Instrument, or
(b) the equity and/or debt DAP/RAP trades executed by or for you during the quarter that matched within the time required in Part 3 of the Instrument represent less than 90 per cent of the aggregate value of the securities purchased and sold in those trades.
Include DAP/RAP trades in an exchange-traded fund (ETF) security in the equity DAP/RAP trades statistics. Exhibit A(1) applies only to trades in equity and ETF securities. Exhibit A(2) applies only to trades in debt and other fixed-income securities..
12. Form 24-101F1 is amended by replacing Exhibit A -- DAP/RAP trade statistics for the quarter with the following:
Exhibit A -- DAP/RAP trade statistics for the quarter
If applicable, complete Table 1 or 2, or both, below for each calendar quarter. Deadline means noon Eastern time on T+1.
(1) Equity DAP/RAP trades (includes ETF trades)
Entered into the clearing agency by deadline (to be completed by dealers only)
Matched (to be completed by dealers and advisers)
$ value of trades
# of trades matched
$ value of trades matched
# of trades matched by deadline
$ value of trades matched by deadline
(2) Debt DAP/RAP trades
"# of Trades" is the total number of transactions in the calendar quarter;
"$ Value of Trades" is the total value of the transactions (purchases and sales) in the calendar quarter.
13. Form 24-101F1 is amended in Exhibit B and C by replacing "Companion Policy 24-101CP" with "Companion Policy 24-101".
14. Form 24-101F2 is amended by replacing the instructions before the heading "Exhibits" with the following:
Deliver this form together with all exhibits pursuant to section 5.1 of the Instrument, covering the calendar quarter indicated above, within 30 days of the end of the calendar quarter.
Include client trades in an exchange-traded fund (ETF) security in the equity trades statistics.
Exhibits must be provided in an electronic file, in the following file format: "CSV" (Comma Separated Variable) (e.g., the format produced by Microsoft Excel)..
15. Form 24-101F2 is further amended in Exhibit A, in Tables 1 and 2, by
(a) deleting the row titled "T+3", and
(b) replacing ">T+3" with ">T+2".
16. Form 24-101F3 is amended under the heading "INSTRUCTIONS:" by
(a) deleting "or 10.2(4)",
(b) replacing "shall" with "must", and
If you are delivering Form 24-101F3 pursuant to section 10.2 (4) of the Instrument, simply indicate at the top of this form under "Date of Commencement Information" that you were already carrying on business as a matching service utility in the relevant jurisdiction on the date that Part 6 of the Instrument came into force.
17. Form 24-101F4 is amended under the heading "INSTRUCTIONS:" by replacing "shall" with "must" in the second paragraph.
18. Form 24-101F5 is amended under the heading "INSTRUCTIONS:" by
(a) adding the following paragraph after the first paragraph:
Include DAP/RAP trades in an exchange-traded fund (ETF) security in the equity DAP/RAP trades statistics., and
(b) replacing "shall" with "must" wherever it appears.
19. Form 24-101F5 is amended in Exhibit C, Tables 1 and 2, by
Registered firm's exception report -- former rules apply to first quarter ending after the effective date
(1) For the purposes of the calculations under National Instrument 24-101 Institutional Trade Matching and Settlement that determine whether, with respect to the first calendar quarter ending after the effective date, Form 24-101F1 must be delivered under section 4.1 of that Instrument, a registered firm may make the determination under that Instrument as it was in force on the day before the effective date unless the effective date is the first day of a calendar quarter.
(2) If a registered firm is required to deliver Form 24-101F1, and the effective date is not the first day of a calendar quarter, with respect to the first calendar quarter ending after the effective date, the firm may comply with the requirement by delivering the version of Form 24-101F1 that was in force on the day before the effective date.
Clearing agency's operations report -- former rules apply to first quarter ending after the effective date
21. For the purposes of section 5.1 of National Instrument 24-101 Institutional Trade Matching and Settlement, a clearing agency may comply with the requirement to deliver Form 24-101F2, with respect to the first calendar quarter ending after the effective date, by delivering the version of Form 24-101F2 that was in force on the day before the effective date unless the effective date is the first day of a calendar quarter.
Matching service utility's operations report -- former rules apply to first quarter ending after the effective date
22. For the purposes of section 6.4(1) of National Instrument 24-101 Institutional Trade Matching and Settlement, a matching service utility may comply with the requirement to deliver Form 24-101F5, with respect to the first calendar quarter ending after the effective date, by delivering the version of Form 24-101F5 that was in force on the day before the effective date unless the effective date is the first day of a calendar quarter.
23. For the purposes of sections 20 to 22 of this Instrument, "effective date" means the date this Instrument comes into force.
While the means by which this Instrument was brought into force differed in certain CSA jurisdictions, the effective date was September 5, 2017 in all jurisdictions.
(1) Except in Alberta, Ontario, Québec, the Northwest Territories, the Yukon, Nunavut, and Prince Edward Island, this Instrument comes into force on the later of the following:
(a) September 5, 2017;
(b) if this Instrument is filed with the Registrar of Regulations after September 5, 2017, on the day on which it is filed with the Registrar of Regulations.
(2) In Alberta, Ontario, Québec, the Northwest Territories, the Yukon, Nunavut and Prince Edward Island this Instrument comes into force on the later of the following:
(b) in the event that the SEC extends the current compliance date of September 5, 2017 for broker-dealers in the United States to meet a new T+2 settlement standard under the amendments to Rule 15c6-1, the extended date set by the SEC to be such compliance date.
(a) "SEC" means the United States Securities and Exchange Commission;
(b) "Rule 15c6-1" means SEC Rule 15c6-1, Securities Transactions Settlement, Exchange Act Release No. 33023 (Oct. 6, 1993), 58 FR 52891, 52893 (Oct. 13, 1993); generally cited as: 17 CFR 240.15c6-1; and
(c) "amendments to Rule 15c6-1" means amendments made by the SEC to Rule 15c6-1 published on March 29, 2017 in the Federal Register in the United States to shorten the standard settlement cycle for most broker-dealer transactions from T+3 to T+2, as set forth in SEC Release No. 34-80295; File No. S7-22-16 (RIN 3235-AL86), Securities Transaction Settlement Cycle; Final rule.
CHANGES TO COMPANION POLICY 24-101 INSTITUTIONAL TRADE MATCHING AND SETTLEMENT
The changes outlined in this Document became effective on September 5, 2017, the same day that the Instrument amending National Instrument 24-101 Institutional Trade Matching and Settlement came into force in all CSA jurisdictions.
1. Companion Policy 24-101 Institutional Trade Matching and Settlement is changed by this Document.
2. The title of the Companion Policy is replaced by the following:
COMPANION POLICY 24-101 INSTITUTIONAL TRADE MATCHING AND SETTLEMENT
3. Subsection 1.2(2) is changed by replacing, in the last sentence of footnote 3, the words "within one hour of the execution of the trade" with "by no later than 6 pm on the day of the trade".
4. Paragraph 1.2(3)(c) is changed by replacing footnote 5 by the following:
5 See, for example, section 14.12 of NI 31-103 and IIROC Member Rule 200.1(h).
5. Subsection 1.3(1) (including footnotes) is replaced by the following (including a footnote):
While the terms "clearing agency" and "recognized clearing agency" are generally defined in securities legislation,6 we have defined clearing agency for the purposes of the Instrument to narrow its scope to a recognized clearing agency that operates as a securities settlement system. The term securities settlement system is defined in National Instrument 24-102 Clearing Agency Requirements as a system that enables securities to be transferred and settled by book entry according to a set of predetermined multilateral rules. Today, the definition of clearing agency in the Instrument applies to CDS Clearing and Depository Services Inc. (CDS). For the purposes of the Instrument, a clearing agency includes, in Québec, a clearing house and settlement system within the meaning of the Securities Act (Québec). See subsection 1.2(2). [footnote 6: See, for example, s. 1(1) of the Securities Act (Ontario).]
6. Subsection 1.3(4) is changed by replacing the words "the Joint Financial Questionnaire and Report of the Canadian SROs" with "IIROC Form 1, Part II".
7. Section 2.2 is changed by
(a) adding "Eastern Time" after "12p.m. (noon)",
(b) deleting the second and third sentences, and
(c) adding after the first sentence the following new sentence (including a footnote):
The policies and procedures requirement of Part 3 of the Instrument is consistent with the overarching obligation of a registered firm to manage the risks associated with its business in accordance with prudent business practices.7 [footnote 7: See s. 11.1 of NI 31-103, which requires registered firms to establish, maintain and apply policies and procedures that establish a system of controls and supervision sufficient to manage the risks associated with their business in accordance with prudent business practices.]
8. Section 3.1 is changed by
(a) replacing in paragraph (a), the words "a percentage target of the DAP/RAP trades" with "90 percent of the DAP/RAP trades (by volume and value)", and
(b) replacing the first word "They ..." in the second sentence of paragraph (b) with the following:
DAP/RAP trades in exchange-traded funds are reportable in the equities category of DAP/RAP trades.
Form 24-101F1 should only be submitted for DAP/RAP trades for the type of security (equity or debt) that did not meet the 90 percent threshold by the relevant timeline. If a registered firm does not meet the threshold for both equity and debt DAP/RAP trades, then it should submit the Form for both equity and debt DAP/RAP trades (i.e., by completing both tables in Exhibit A of Form 24-101F1). If the firm does not meet the threshold only for one type of security (i.e., for equity but not debt, or for debt but not equity), it should only submit the Form for the one type of security, by completing only one of the tables in Exhibit A of Form 24-101F1. A registered firm ... .
9. Paragraph 3.2(b) is changed by
(a) replacing the first sentence with the following:
The Canadian securities regulatory authorities may consider the consistent inability to meet the matching percentage target as evidence that either the policies and procedures of one or more of the trade matching parties have not been properly designed or, if properly designed, have been inadequately complied with., and
(b) replacing, in the second sentence, the word "will" with "may".
10. Section 3.3 is changed by replacing "participants or users/subscribers" with "participants, users or subscribers".
11. Section 3.4 is changed by replacing "may" with "are encouraged to".
12. Subsection 4.1(1) is changed by
(a) replacing the first word ("The...") in the second sentence with the following "For the purposes of the Instrument, the...", and
(b) adding the following text (including a footnote) after the last sentence:
In Québec, a person or company that seeks to provide centralized facilities for matching must, in addition to the requirements of the Instrument, apply for recognition as a matching service utility or for an exemption from the requirement to be recognized as a matching service utility pursuant to the Securities Act (Québec) or Derivatives Act (Québec). In certain other jurisdictions, in addition to the requirements of the Instrument, such person or company may be required to apply either for recognition as a clearing agency or for an exemption from the requirement to be recognized as a clearing agency.10 [footnote 10: See, for example, the scope of the definition of "clearing agency" in s. 1(1) of the Securities Act (Ontario), which includes providing centralized facilities "for comparing data respecting the terms of settlement of a trade or transaction".].
13. Section 4.2 is changed by replacing "Sections 6.1(1) and 10.2(4) of the Instrument require ..." with "Subsection 6.1(1) of the Instrument requires".
14. Section 5.1 is changed by
(a) replacing "T+3" with "T+2", and
(b) renumbering footnote 10 to 11.
15.This Document becomes effective on the same day as the instrument amending National Instrument 24-101 Institutional Trade Matching and Settlement becomes effective.
Amendment #1 to Final Simplified Prospectus dated August 30, 2017
Received on August 30, 2017
BMO Ascent Equity Growth Portfolio
BMO Ascent Growth Portfolio
BMO Ascent Income Portfolio
Project #2575117
BMO Shiller Select Index ETF
Preliminary Long Form Prospectus dated August 29, 2017
NP 11-202 Preliminary Receipt dated August 30, 2017
Project #2670204
Canadian Scholarship Trust SmartPlan
Preliminary Long Form Prospectus dated August 31, 2017
NP 11-202 Preliminary Receipt dated September 1, 2017
Minimum Initial Contribution: $500 or Minimum Monthly Contribution of $10
Project #2672383
Combined Preliminary and Pro Forma Simplified Prospectus dated August 30, 2017
Received on September 1, 2017
Project #2672634
Fidelity Dividend Plus Fund (formerly Fidelity Income Trust Fund)
Fidelity U.S. Focused Stock Fund (formerly Fidelity Growth America Fund)
Fidelity U.S. Dividend Registered Fund
Fidelity Global Concentrated Equity Fund (formerly Fidelity Global Opportunities Fund)
Fidelity International Concentrated Equity Fund (formerly Fidelity International Value Fund)
Fidelity International Growth Fund (formerly Fidelity Overseas Fund)
Amendment #6 to Final Simplified Prospectus and Amendment #8 to Annual Information Form dated August 30, 2017
Received on August 31, 2017
Amended and Restated to Final Simplified Prospectus dated August 29, 2017
Project #2644394
Final Simplified Prospectus dated August 31, 2017
NP 11-202 Receipt dated September 1, 2017
A, E, F, I, O and CDN Dollar Hedged Series A, CDN Dollar Hedged Series E and CDN Dollar Hedged Series F Units @ net asset value
Final Simplified Prospectus dated August 28, 2017
Receipted on August 29, 2017
Class A, Class B, Class F and Class O Units @ net asset value
Project #2653124
NP 11-202 Receipt dated August 29, 2017
Series A Units, AH Units, D Units, F Units, FH Units and O Units @ Net Asset Value
Project #2649089
Final Long Form Prospectus dated August 25, 2017
Project #2651596
Amendment #1 to Final Simplified Prospectus dated August 25, 2017
NP 11-202 Receipt dated August 30, 2017
NP 11-202 Receipt dated August 31, 2017
Project #2651141
Sprott 2017-II Flow-Through Limited Partnership
Final Long Form Prospectus dated August 30, 2017
Maximum: $30,000,000 -- 1,200,000 Limited Partnership Units @ $25/Unit
Minimum: $5,000,000 -- 200,000 Limited Partnership Units @ $25/Unit.
Sprott 2017-II Corporation
Project #2658552
Amendment #1 to Final Simplified Prospectus dated July 28, 2017
Series A, D, T5, T8, F, I, O Securities @ Net Asset Value
Project #2559217
Preliminary Shelf Prospectus dated August 29, 2017
NP 11-202 Preliminary Receipt dated August 29, 2017
$5,000,000,000.00 -- Common Shares, Preferred Shares, Subscription Receipts, Debt Securities
Project #2670924
Preliminary Short Form Prospectus dated August 30, 2017
$62,500,000.00 -- Offering of Rights to Subscribe for Up to * Common Shares
At a Price of * Per Common Share
Project #2672409
$500,000,000.00 -- Common Shares, Debt Securities, Subscription Receipts, Warrants, Share Purchase Contracts, Units
Project #2669548
Preliminary Shelf Prospectus dated August 31, 2017
NP 11-202 Preliminary Receipt dated August 31, 2017
$8,000,000,000.00 -- Debt Securities (unsecured), First Preferred Shares, Common Shares, Subscription Receipts
Project #2672280
Grunewahl Organics Inc.
Minimum Offering: $1,500,000.00 -- 15,000,000 Units
Maximum Offering: $4,000,000.00 -- 40,000,000 Units
Project #2670624
Preliminary Shelf Prospectus dated September 1, 2017
$2,000,000,000.00 -- Medium Term Notes (unsecured)
Project #2672531
$10,000,000.00 -- 10,000,000 Units
Project #2664155
Amendment dated September 1, 2017 to Preliminary Short Form Prospectus dated August 30, 2017
Final Long Form Prospectus dated August 28, 2017
Final Shelf Prospectus dated August 30, 2017
U.S. $1,000,000,000.00 -- Common Shares, Preference Shares, Debt Securities, Depositary Shares, Warrants, Purchase Contracts, Units, Subscription Receipts
Final CPC Prospectus (TSX-V) dated August 29, 2017
Project #2647111
Amendment dated August 24, 2017 to Final CPC Prospectus (TSX-V) dated May 24, 2017
Minimum Offering: $400,000.00 or 2,000,000 Common Shares
Maximum Offering: $2,200,000.00 or 11,000,000 Common Shares
Price: $0.20 per Common Share
Project #2622643
From: AR3 Capital Management Inc.
Investment Fund Manager, Portfolio Manager, Commodity Trading Manager and Exempt Market Dealer
To: Red Jacket Capital Inc.
TriAct Canada Marketplace LP -- Changes to the MATCHNow Trading System -- Notice of Approval
NOTICE OF APPROVAL OF PROPOSED CHANGES TO THE MATCHNOW TRADING SYSTEM
On September 5, 2017, the Ontario Securities Commission (OSC) approved amendments proposed by TriAct Canada Marketplace LP (TriAct or MATCHNow) to Form 21-101F2. MATCHNow proposed the following changes to the MATCHNow trading system:
1. Echo Back Tag: offer an optional tag for subscribers to track their order messages by sending any value inside a dedicated alpha-numeric FIX tag, which value will then be "echoed back" on all following FIX reports.
2. Multicast Market Data: move to the increasingly common standard of offering market data in a Multicast manner by building a new market data environment that distributes public trade data via a multicast network in the well-recognized and widely used ITCH format. As part of this change, the TMX Datalinx's Real Time Market Data feed will be discontinued, but the existing TMXIP's CDF and CLS feeds will stay in place, alongside the new Multicast network.
3. Cancel residual portions with minimum quantity: give subscribers the option to override the current behaviour and force any residual quantities that fall below the MINQTY size to be rejected back.
4. Provide currency on drop copy: add a tag that includes currency so that subscribers have this information when MATCHNow sends fills into a system where currency is mandatory (for example in a ticketing system). Subscribers and vendors will have to accept Tag 15 (a standard FIX tag) on any existing drop copy feed.
5. Use of MinFill by the Odd Lot destination: allow the Odd Lot destination to recognize any MinFill size placed on the incoming order, whether it is part of a mixed-lot order or a stand-alone Odd Lot. This is a logical extension of the existing MinFill feature, now allowing for the Odd Lot portion of orders to respect a subscriber's request to fill an order only where it meets a minimum requirement.
In accordance with the OSC's Process for the Review and Approval of the Information Contained in Form 21-101F2 and Exhibits Thereto, a notice outlining and requesting feedback on these proposed changes was published on the OSC website and in the OSC Bulletin on June 29, 2017 at (2017), 40 OSCB 5694 (the Notice of Proposed Changes). No comments were received regarding any of the five proposed changes summarized above.
MATCHNow will publish a notice indicating the date of implementation of the five approved changes.
As part of the Notice of Proposed Changes, MATCHNow also proposed one additional change, namely, to offer a trade message fee marker (the Proposed Fee Tracking Option). This proposed change was intended to provide subscribers with the option of a notification of their trading fee message attached to their executions through the use of a new FIX Tag and tag value inside a subscriber's partial fill or fill messages, allowing subscribers to map trading fees to a specified value and thus track their MATCHNow trading fees intraday. One comment letter was received regarding this proposed change and the summary of comments and MATCHNow's responses is published in Appendix A to this notice.
For the reasons set out in its responses in Appendix A, MATCHNow is withdrawing the Proposed Fee Tracking Option at this time. Should MATCHNow wish to revisit this proposed change in the future, it would file a new proposal with the OSC at that time, subject to public comment.
The following is a summary of comments received in response to the Notice of Proposed Changes and Request for Comment (the Notice) filed by TriAct Canada Marketplace LP (TriAct or MATCHNow) and published on June 29, 2017, along with MATCHNow's responses to these comments.
At this time, and for the reasons set out in our responses below, MATCHNOW has withdrawn the proposed change to offer a trade message fee marker (the Proposed Fee Tracking Option).
In response to the Notice, we received one comment letter, which was submitted by the Trading Issues Committee of the Canadian Securities Traders Association (the CSTA). All of the comments in that letter addressed the Proposed Fee Tracking Option.
MATCHNow's Response
The Proposed Fee Tracking Option should be denied because it would result in inappropriate information leakage. Under MATCHNow's fee structure for non-ETF trades, unintentional crosses (which occur when an order from a particular firm is executed against a counterparty at the same firm, excluding jitney transactions) are free, while other such trades have a fee. Thus, if MATCHNow were to disseminate trade fee messages in real time, a participant receiving a fill from MATCHNow on a non-ETF trade would be able to infer additional information regarding its trade counterparty by combining fee information with the publicly disseminated broker code. Specifically.
MATCHNow appreciates the CSTA's consideration of this issue and its comments. MATCHNow Subscribers had requested this proposed feature, which has been available in the U.S. markets for some time, and our goal was to be responsive to our Subscribers' needs. Unlike in the U.S., however, marketplaces in Canada use broker numbers and broker preferencing; as a result, there is the potential that real-time fee information could be used to infer the identity of the specific broker through which an ultimate counterparty has executed an anonymous trade in certain circumstances. We note that the identity of that counterparty would still be unknown to the Subscriber, and any inferences regarding the counterparty could never be drawn with 100% certainty. We further note that the proposed feature would have been made available to all MATCHNow Subscribers equally, in accordance with principles of "Fair Access." Nevertheless, in an abundance of caution, and to allow us to further consider the issue, we have decided to withdraw the Proposed Fee Tracking Option at this time.
If the trade is assigned a fee, but the counterparty broker code is publicly disclosed as the same as the subscriber's, then the counterparty would be inferred to be a jitney client of the counterparty's firm;
If the trade is "free," but the counterparty is anonymous, then the counterparty would be inferred to originate at the same firm as the subscriber.
In both cases, the subscriber would have an informational advantage compared with other market participants. This indirect disclosure of firm identity through the disclosure of trading fees is an inappropriate and unacceptable trade-off.
The Proposed Fee Tracking Option should be denied, whether the information is available on drop copy FIX sessions or via the order entry FIX session. End broker clients are already known to directly receive their own drop copy FIX sessions, and thus only disallowing the order entry FIX session would not be sufficient.
We have withdrawn the Proposed Fee Tracking Option, so the concern underlying this comment is now moot. We will keep this comment in mind for any future proposal regarding trade fee tracking.
Dissemination of trade fees in real time could be useful to facilitate standardized trade fee reporting. In an environment where heightened transparency and information disclosures are required to evaluate trade execution quality, trading fees are becoming a key output in broker-to-client reporting. Marketplaces should build features that decrease the burden of post-trade information reporting to clients and internal reporting, but not at the cost of creating information leakage. Only marketplaces with fee structures that would not lend themselves to creating information leakage should be allowed to disseminate trade fees in real time.
We agree that dissemination of real-time trading fees is a desirable goal, and that it should not result in any informational advantage for any particular market participant. To that end, we reserve the right to propose future changes that enable our Subscribers to track their fees in a more effective and timely manner.
If MATCHNow were to modify its fee structure to eliminate the potential information leakage, or make other changes unrelated to the current proposal, we believe that sending the actual cost would be more practical for subscribers. The current proposal requires the maintenance of a map of fee codes to fee rates and, therefore, would require subscribers to adjust internal systems whenever MATCHNow's fee schedule changes. This burden would be eliminated by disseminating trade costs in dollars (or as a rate per share). It is requested that that any future proposal to implement real-time trading fee dissemination be associated with a message containing the actual cost instead of a reference code to a fee structure, as this will prevent unnecessary street-wide development costs every time there is an update of a trade fee schedule.
We appreciate this comment and will keep it in mind for any future proposal concerning trade fee tracking.
CDCC -- Omnibus Amendments to Rule A and D-6 of CDCC's Rules as well as to the Operations Manual, Risk Manual and Default Manual, Introducing the Limited Clearing Members Category and Establishing Additional Recovery Power -- OSC Staff Notice of Request for Comment
OMNIBUS AMENDMENTS TO RULE A AND D-6, THE OPERATIONS, RISK AND DEFAULT MANUALS OF THE CANADIAN DERIVATIVES CLEARING CORPORATION INTRODUCING THE LIMITED CLEARING MEMBERS CATEGORY AND ESTABLISHING ADDITIONAL RECOVERY POWERS (RECOVERY PHASE 2)
The Ontario Securities Commission is publishing for 60 day public comment the omnibus amendments to Rule A and D-6 of CDCC's Rules as well as to the Operations Manual, Risk Manual and Default Manual. The purpose of the proposed amendments is to create a new category of Fixed Income Clearing Members, the "Limited Clearing Members", for qualified buy-side firms, enhance its Default Management process and establish and document additional recovery power granted to CDCC in the course of its Recovery Process.
The comment period ends on November 6, 2017.
A copy of the CDCC Notice is published on our website at http://www.osc.gov.on.ca.
Goodfood Market Corp. -- s. 4(b) of Ont. Reg. 289/00 under the OBCA
IN THE MATTER OF R.R.O. 1990, REGULATION 289/00, AS AMENDED (THE "REGULATION") MADE UNDER THE BUSINESS CORPORATIONS ACT (ONTARIO), R.S.O. 1990, c. B.16, AS AMENDED (THE "OBCA") AND IN THE MATTER OF GOODFOOD MARKET CORP.
UPON the application of Goodfood Market Corp. (the "Corporation") to the Ontario Securities Commission (the "Commission") requesting the consent of the Commission, as required under subsection 4(b) of the Regulation, for the Corporation to continue in another jurisdiction pursuant to section 181 of the OBCA (the "Continuance");
1. The Corporation was incorporated under the OBCA by certificate of incorporation effective on March 23, 2015.
2. The Corporation's registered office is located at 515 Legget Drive, Suite 800 Ottawa, Ontario K2K 3G4, with its principal place of business located at 700 rue Deslauriers, Montreal, Quebec H4W 1W5.
3. The authorized share capital of the Corporation consists of an unlimited number of common shares (the "Common Shares"), of which 47,690,185 were issued and outstanding on August 14, 2017.
4. The Corporation's issued and outstanding Common Shares are listed for trading on the Toronto Stock Exchange under the symbol "FOOD". The Corporation does not have any of its securities listed on any other stock exchange.
5. The Corporation intends to apply to the Director pursuant to section 181 of the OBCA (the "Application for Continuance") for authorization to continue as a corporation under the Canada Business Corporations Act, R.S.C. 1985, c. C-44 (the "CBCA").
6. Pursuant to subsection 4(b) of the Regulation, where a corporation is an offering corporation under the OBCA, the Application for Continuance must be accompanied by the consent of the Commission.
7. The Application for Continuance is being made in connection with a proposed vertical short-form amalgamation involving the Corporation and Goodfood Market Inc. ("GMI"), a wholly-owned subsidiary of the Corporation incorporated under CBCA (the "Proposed Amalgamation").
8. Following the Continuance and Proposed Amalgamation, the Corporation intends, upon shareholder approval, to move its registered office to Quebec (the "Head Office Relocation").
9. The Corporation is an offering corporation under the provisions of the OBCA and is a reporting issuer within the meaning of the Securities Act, R.S.O. 1990, c. s. 5, as amended (the "OSA"), and within the meaning of the Securities Act (British Columbia), R.S.B.C. 1996, c. 418 (the "BCSA") and the Securities Act (Alberta), R.S.A. 2000, c. S-4 (the "ASA"). Following the Continuance and after the Proposed Amalgamation, the Corporation intends to remain a reporting issuer in Ontario, British Columbia and Alberta, and will become a reporting issuer in Quebec upon the completion of the Head Office Relocation.
10. The principal regulator of the Applicant is currently the Ontario Securities Commission. Following the completion of the Head Office Relocation, the Applicant will request that the Autorite des marches financiers become its principal regulator.
11. The Corporation is not in default under any provision of the OSA, the Regulation or rules made thereunder, and is not in default under the BCSA or the ASA.
12. The Corporation is not a party to any proceeding or, to the best of its knowledge, information and belief, any pending proceeding under the OSA, BCSA or the ASA.
13. The Corporation's shareholders authorized the Continuance of the Corporation under the CBCA by way of special resolution at a special meeting of shareholders (the "Meeting") held on May 17, 2017. The special resolution authorizing the Continuance was approved at the Meeting by 100% of the votes cast.
14. Pursuant to section 185 of the OBCA, all shareholders of record as of the record date for the Meeting were entitled to exercise dissent rights with respect to the Application for Continuance (the "Dissent Rights"). No shareholder exercised their Dissent Rights with respect to the special resolution authorizing the Continuance.
15. The management information circular of the Corporation dated April 12, 2017 (the "Circular"), which described the Continuance and included a summary comparison of the differences between the OBCA and the CBCA, was provided to shareholders together with the notice of Meeting. The Circular advised shareholders of their Dissent Rights in connection with the Continuance pursuant to section 185 of the OBCA and also contained the proposed articles of continuance.
16. The Corporation intends to amalgamate with GMI after the completion of the Continuance. In order to do so, the Corporation and GMI must be governed by the laws of the same jurisdiction. Currently, the Corporation is governed by the laws of the province of Ontario and GMI is governed by the laws of Canada. As a result, the Corporation is applying for authorization to continue under the CBCA.