James D. Carnwath

The applicant, a UK company listed on AIM, applied to the Ontario Securities Commission for an exemption from the prospectus requirement for the first trade of its shares.

The shares were to be issued to Canadian shareholders of Elko Energy Inc. pursuant to a plan of arrangement.

The exemption was required because Canadian residents would own more than 10% of the applicant's shares following the transaction, precluding reliance on the standard resale exemption in National Instrument 45-102.

The Commission granted the exemptive relief, subject to conditions including that the first trade be executed through AIM or another foreign exchange, and that Canadian residents (excluding former Elko shareholders) not hold more than 10% of the applicant's shares.

Staff of the Ontario Securities Commission brought a proceeding against the respondent for making misleading statements and breaching a cease trade order.

The hearing proceeded in writing after the respondent failed to file materials.

Based on affidavit evidence, the Commission found that the respondent made misleading statements regarding his employment history and financial situation, contrary to section 122(1)(a) of the Securities Act.

The Commission also found that the respondent breached a prior sanctions decision and cease trade order by trading securities, contrary to section 122(1)(c) of the Act.

A sanctions hearing was ordered to be scheduled.

The Filer applied for exemptive relief in connection with a take-over bid and subsequent plan of arrangement for the acquisition of TMX Group Inc. The Filer sought relief from the proportionate take-up and payment requirements, the three-day payment requirement, and the formal valuation and minority approval requirements for the subsequent business combination.

The Ontario Securities Commission granted the requested relief, subject to certain conditions, including that the subsequent arrangement be completed within 35 days following the deposit extension period expiry time.

Questrade Inc. applied for a hearing and review of a decision by the IIROC District Council, which found that Questrade failed to comply with regulatory margin requirements for its online foreign exchange trading business and that its conduct was unbecoming a Member Firm.

The Ontario Securities Commission applied a restrained approach, according deference to the District Council's expertise.

The Commission found no error in law or incorrect principle in the District Council's conclusions that Spot FX contracts are not exempt from margin requirements and that Questrade's deliberate refusal to follow IDA directions constituted conduct unbecoming.

The application was dismissed.

The applicant sought a review of a sanction imposed by the Investment Industry Regulatory Organization of Canada (IIROC).

After succeeding on the review, the applicant requested that the Ontario Securities Commission determine the appropriate sanction rather than remitting the matter.

The Commission declined, finding that an IIROC panel would have greater familiarity with its own guidelines, could hear the matter sooner, and that deference is owed to a sanctioning administrative body composed of the applicant's peers.

The matter was remitted to IIROC for a sanction hearing before a differently constituted panel.

Following a merits hearing where the respondents were found to have engaged in unregistered trading and illegal distribution of securities through a promissory note scheme, the Ontario Securities Commission held a sanctions and costs hearing.

The Commission ordered cease trade orders, director and officer bans, and reprimands against the respondents.

Furthermore, the Commission ordered disgorgement of $900,000 from the CEO and $3,000,000 jointly and severally from the Taylor respondents.

The Commission declined to award costs to Staff due to various issues with Staff's conduct during the investigation and proceedings.

The Filer, Drive Products Income Fund, applied for a decision that it is no longer a reporting issuer in the applicable jurisdictions following a take-over bid and compulsory acquisition by 2256479 Ontario Inc. The Filer's units were delisted from the TSX and its outstanding securities are beneficially owned by fewer than 15 security holders in each jurisdiction.

The Ontario Securities Commission, as principal regulator, granted the requested exemptive relief.

The applicant, a service provider, applied for exemptive relief on behalf of its intermediary, registrant, and custodian clients from certain proxy delivery requirements under the Securities Act and National Instrument 54-101.

The applicant sought to implement an alternative 'appointee system' for beneficial owners to attend and vote at securityholder meetings.

The Ontario Securities Commission granted the exemptive relief, conditional on the implementation of the appointee system, and ordered that the client list remain confidential due to its commercially sensitive nature.

The applicants sought a hearing and review of an IIROC sanctions decision, arguing that the reasons provided by the IIROC panel were inadequate.

The applicants had admitted to failing to properly perform gatekeeper responsibilities and failing to adequately supervise conduct.

The IIROC panel imposed sanctions that were significantly more severe than those sought by IIROC staff, including a life suspension and a $250,000 fine for the principal applicant.

The Commission found that the IIROC panel's reasons failed to address mitigating factors, appeared to sanction the applicants for unadmitted conduct such as fraud and illegal distributions, and misstated the agreed facts.

The Commission concluded that the reasons were so inadequate as to constitute an error in law, set aside the decision, and invited submissions on whether it should substitute its own decision or remit the matter for a re-hearing.

The applicant fund sought exemptive relief from the prospectus requirement for distributions that are steps in a proposed reorganization.

The reorganization was intended to ensure the fund would satisfy the definition of a 'real estate investment trust' for tax purposes, thereby avoiding SIFT tax rules.

The Ontario Securities Commission granted the relief, noting that the reorganization did not require unitholder approval, did not change unitholders' ownership, and did not alter the fund's consolidated assets and liabilities.

The applicants, respondents in an enforcement proceeding, brought a motion to dismiss or adjourn the proceedings.

They argued there was a reasonable apprehension of bias due to the Ontario Securities Commission's multifunctional structure and a separate panel's approval of settlement agreements with other respondents.

They also challenged the Commission's jurisdiction, claiming they were not participants in Ontario's capital markets.

The Commission dismissed the motion, finding no sufficient evidence of institutional bias and noting that the Supreme Court of Canada has upheld the integrated agency model.

The jurisdictional challenge was dismissed as premature, to be determined at the merits hearing.

The moving party sought an adjournment of the sanctions hearing pending his application to the Divisional Court for judicial review of the decision on the merits.

He argued he was denied procedural fairness because the Commission failed to consider a settlement agreement he entered into with Staff.

The Commission denied the adjournment motion, finding it premature.

Granting the adjournment would place an incomplete record before the Divisional Court, as the sanctions applied to the moving party would be unknown.

The Commission also rejected the submission that the moving party was denied procedural fairness bringing him within the exception in Ontario (Liquor Control Board) v. Lifford Wine Agencies, noting little or no prejudice to him in proceeding with the sanctions hearing.

The Filer, ING Summit Industrial Fund LP, applied for an order to cease being a reporting issuer in multiple Canadian jurisdictions.

The Filer had legally defeased its outstanding debentures by irrevocably depositing funds in trust to satisfy all payment obligations on the upcoming redemption date.

As the Filer had no other public securityholders and the debentureholders no longer required public disclosure, the Ontario Securities Commission, acting as principal regulator, granted the exemptive relief sought.

The applicants, a U.S. parent company and its subsidiary, sought relief from the prospectus requirement under the Securities Act to distribute shares of the subsidiary to the parent's shareholders.

The parent company is a public company in the U.S. but not a reporting issuer in Canada, and has a de minimis shareholder presence in Canada.

The Ontario Securities Commission granted the exemption, noting that no investment decision was required from Canadian shareholders to receive the distributed shares.

The applicant, a mutual fund manager, applied for exemptive relief from subsection 5.1(a) of National Instrument 81-105 to permit it to pay participating dealers direct costs incurred relating to cooperative marketing initiatives whose primary purpose is to provide educational information concerning tax or estate planning matters.

The Ontario Securities Commission granted the exemption, subject to conditions ensuring that the information is general, educational, and not tied to sales incentives.

The Executive Director of the Ontario Securities Commission applied under s. 144 of the Securities Act to vary or revoke a prior Commission decision that required notice be given to two corporate account holders of a bank before disclosing compelled documents to a foreign regulator.

Staff also sought a sealing order for fresh evidence without disclosing it to the bank.

The Commission granted the sealing order but required confidential disclosure to the bank's counsel to ensure procedural fairness.

The Commission dismissed the s. 144 application, finding that Staff was improperly using the provision as an appeal mechanism, which is contrary to the legislative intent of the Act and the public interest.

The applicant, West 49 Inc., applied to the Ontario Securities Commission and other jurisdictions for a decision that it is no longer a reporting issuer.

Following an arrangement where Aurora Inc. acquired all outstanding shares and subsequently amalgamated with the applicant, the applicant's securities were delisted and beneficially owned by fewer than 15 security holders in each jurisdiction.

Although the applicant was in default of certain interim filing obligations, the Commission granted the requested exemptive relief, determining the applicant is no longer a reporting issuer.

The Ontario Securities Commission held a hearing on the merits regarding allegations that the respondents engaged in unregistered trading, advising without registration, and fraud.

The respondents failed to appear.

The Commission found that the respondents sold securities without registration or available exemptions, acted as advisors without registration, and perpetrated a fraud on investors by misappropriating funds for personal use, posting false trading results, and using investor funds to pay returns to other investors.

The applicants, BNS Split Corp. II and Scotia Capital Inc., applied for an exemption from the principal trading prohibitions under section 119 of the Securities Act.

The exemption was sought to allow Scotia Capital to make principal purchases of portfolio shares in connection with the public offering of Class B Preferred Shares, Series 1 of the Filer.

The Ontario Securities Commission granted the requested exemptive relief, satisfied that the decision met the test set out in the legislation.

The Filer applied for a decision to be deemed to have ceased to be a reporting issuer under the securities legislation of multiple jurisdictions.

The Filer's shareholders voted to authorize voluntary dissolution, its securities were delisted from the TSX Venture Exchange, and it has no intention to seek public financing.

The Ontario Securities Commission, acting as principal regulator, granted the requested relief.