ATB Capital Markets Inc. and ATB Securities Inc.

Headnote

Multilateral Instrument 11-102 Passport System, National Policy 11-203 Process for Exemptive Relief Applications in Multiple Jurisdictions, National Instrument 33-109 Registration Information -- Bulk transfer of individual registrants and business locations between affiliated entities within the same jurisdiction and registration category, upon amalgamation.

Applicable Legislative Provisions

National Policy 11-203 Process for Exemptive Relief Applications in Multiple Jurisdictions, s. 3.6(3)(b).

National Instrument 33-109 Registration Information, ss. 2.2, 2.3, 2.4, 3.2 and 4.2.

Citation: Re ATB Capital Markets Inc. and ATB Securities Inc., 2023 ABASC 166

December 19, 2023

IN THE MATTER OF THE SECURITIES LEGISLATION OF ALBERTA AND ONTARIO (the Jurisdictions) AND IN THE MATTER OF THE PROCESS FOR EXEMPTIVE RELIEF APPLICATIONS IN MULTIPLE JURISDICTIONS AND IN THE MATTER OF ATB CAPITAL MARKETS INC. (ATBCM) AND ATB SECURITIES INC. (ATBSI) (the Filers)

DECISION

Background

The securities regulatory authority or regulator in each of Alberta and Ontario (the Decision Makers) has received an application from the Filers, for a decision under the securities legislation of those jurisdictions (the Legislation) providing exemptions from the requirements contained in sections 2.2, 2.3, 2.5, 3.2 and 4.2 of National Instrument 33-109 Registration Information (NI 33109) pursuant to section 7.1 of NI 33-109 to allow the bulk transfer (the Bulk Transfer) of registered individuals (the ATBSI Individuals) and all business locations (the Locations) of ATBSI from ATBSI to ATBCM on or about January 1, 2024 (the Amalgamation Date), in accordance with section 3.4 of the Companion Policy to NI 33-109 (the Exemption Sought).

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

(a) the Alberta Securities Commission is the principal regulator for this application;

(b) the Filers have provided notice that section 4.7(1) of Multilateral Instrument 11102 Passport System (MI 11-102) is intended to be relied upon by the Filers in each of other provinces and territories of Canada (collectively, with Alberta and Ontario, the Jurisdictions); and

(c) the decision with respect of the Exemption Sought is the decision of the principal regulator and evidences the decision of the securities regulatory authority or regulator in Ontario.

Interpretation

Terms defined in National Instrument 14-101 Definitions and in 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 Filers:

ATBSI

1. ATBSI is a wholly-owned subsidiary of ATB Financial.

2. ATBSI is registered as an investment dealer in each of the Jurisdictions other than Quebec and Nunavut. ATBSI is a member of the Canadian Investment Regulatory Organization (CIRO) and has its head office in Edmonton, Alberta.

3. ATBSI has approximately 340 registered representatives carrying on business throughout Alberta.

4. ATBSI is not in default of any requirements of securities legislation in the Jurisdictions.

ATBCM

5. ATBCM is a wholly-owned subsidiary of ATB Financial.

6. ATBCM is registered as an investment dealer in each of the Jurisdictions. ATBCM is a member of CIRO and has its head office in Calgary, Alberta.

7. ATBCM is not in default of any requirements of securities legislation in the Jurisdictions.

The Amalgamation

8. For various business reasons, on or about January 1, 2024, the Filers intend to amalgamate (the Amalgamation).

9. The Amalgamation will be effected under the Business Corporations Act (Alberta) as a horizontal short form amalgamation. As such, after the Amalgamation, the Filers will continue as a single legal entity with the name "ATB Securities Inc." (with the French version being "Valeurs mobilières ATB") (the Amalgamated Corporation).

10. The Amalgamated Corporation will be a wholly-owned subsidiary of ATB Financial.

11. The head office of the Amalgamated Corporation will be the same as the current head office location of ATBSI.

12. The principal regulator of the Amalgamated Corporation will be the ASC.

13. Upon the Amalgamation, the Amalgamated Corporation will carry on the activities currently conducted by each of ATBSI and ATBCM in two distinct operating lines of business. The Filers do not anticipate any other material changes in their primary business activities, target markets or products and services as a result of the Amalgamation.

14. The Amalgamated Corporation will adopt the trade names "ATB Wealth" for the retail division of the business and "ATB Capital Markets" for the institutional division of the business.

15. The Amalgamated Corporation will carry on under the registration of ATBCM and the registration of ATBSI will be surrendered. Accordingly, the registrations of all ATBSI Individuals must be terminated with ATBSI and reinstated under the registration of ATBCM effective on the Amalgamation Date. Additionally, the Locations of ATBSI must be transferred to the registration of ATBCM effective on the Amalgamation Date.

Submissions in support of the exemption

16. Effective as of the Amalgamation Date, all activities currently conducted by the Filers will be under the responsibility of the Amalgamated Corporation. The Amalgamated Corporation will conduct the same operations, essentially in the same manner as before the Amalgamation.

17. Subject to obtaining the Exemption Sought, no disruption in the services provided by the ATBSI Individuals to clients of ATBSI is anticipated as a result of the Amalgamation.

18. The Exemption Sought will not have any negative consequences on the ability of the Filers or the Amalgamated Corporation to comply with any applicable regulatory requirements or their ability to satisfy any of their obligations in respect of their clients.

19. Given the number of ATBSI Individuals and Locations to be transferred from ATBSI to the Amalgamated Corporation on the Amalgamation Date, it would be unduly time consuming and difficult to transfer each of the ATBSI Individuals and Locations through the National Registration Database in accordance with the requirements of NI 33-109 if the Exemption Sought is not granted.

20. The Filers are registered in the same category of registration, and ATBCM is registered in the same jurisdictions as ATBSI (in addition to other jurisdictions), thereby affording the opportunity to seamlessly transfer the ATBSI Individuals and Locations to the Amalgamated Corporation on the Amalgamation Date by way of Bulk Transfer.

21. At the time of the Bulk Transfer, all of the ATBSI Individuals will be the only registered individuals of ATBSI and the Locations will be the only business locations of ATBSI. Accordingly, the transfer of the ATBSI Individuals and Locations on the Amalgamation Date by means of the Bulk Transfer can be implemented without any significant disruption to the activities of the ATBSI Individuals, the Locations, the Filers or the Amalgamated Corporation.

22. Allowing the Bulk Transfer of the ATBSI Individuals to occur on the Amalgamation Date will benefit (and have no detrimental impact on) the clients of the Filers by facilitating seamless service on the part of the ATBSI Individuals, the Filers and the Amalgamated Corporation.

23. The Exemption Sought provides the information and satisfies the conditions for a bulk transfer as set out in Section 3.4 of the Companion Policy to NI 33-109 and Appendix D thereto.

Decision

The Decision Makers are satisfied that the decision meets the tests set out in the Legislation for the Decision Makers to make the decision.

The decision of the Decision Makers under the Legislation is that the Exemption Sought is granted.