Register today for OSC Dialogue 2024: Inviting, thriving and secure capital markets
Gavin Management Group, Inc.
Headnote
Registration exemption where Ontario firm provides advice exclusively to clients who are United States residents. Individuals advising on behalf of the firm are currently registered in Ontario as advising representatives, or the ultimate designated person, of an affiliated firm that is registered in Ontario as a portfolio manager, and must remain so. Exempted firm and its advising individuals must maintain appropriate registration or licensing in the U.S., or otherwise be permitted under applicable U.S. legislation to act as an adviser to the clients.
Applicable Ontario Statutory Provision
Securities Act, R.S.O. 1990, c. S.5., as am., ss. 25(3), 74(1).
IN THE MATTER OF
THE SECURITIES ACT, ONTARIO
(the Act)
AND
IN THE MATTER OF
GAVIN MANAGEMENT GROUP, INC.
(the Filer)
ORDER
Background
The Ontario Securities Commission (the Commission) has received an application from the Filer for a ruling under subsection 74(1) of the Act for an exemption from the adviser registration requirement in section 25(3) of the Act for:
(a) the Filer, and
(b) any individuals engaging in, or holding themselves out as engaging in the business of advising others when acting on behalf of the Filer, who are also registered under the Act to act as advising representatives of GMG Private Counsel Inc. (GMG PC) or the ultimate designated person (UDP) of GMG PC (the Filer's Advisers),
in respect of advice to persons or companies that are resident in the United States of America (U.S. Clients) (the Requested Exemption).
Representations of the Filer
1. The Filer is incorporated under the laws of State of Florida. Its head office is in Toronto, Ontario.
2. The Filer was established to provide advice with respect to U.S. Clients.
3. The Filer is not a registrant under the Act.
4. The Filer is registered as an investment adviser under section 203 of the United States Investment Advisers Act of 1940 to carry on the business of an adviser in the United States.
5. The Filer's Advisers will act as advisers to the U.S. Clients primarily out of the Filer's Toronto head office.
6. Neither the Filer, nor any individual acting on its behalf, will act as an adviser to persons or companies resident in Ontario unless they are appropriately registered, or relying on an exemption from registration, under Ontario securities law.
7. The Filer and the Filer's Advisers will comply with all registration and other requirements of applicable United States securities laws in respect of advising U.S. Clients.
8. None of the Filer's Advisers will act as an adviser to a U.S. Client unless the Filer's Adviser is an advising representative or the UDP of GMG PC.
9. GMG PC was formed under the laws of Ontario. It is an affiliate of the Filer and shares the same head office in Toronto.
10. GMG PC is registered as a portfolio manager and exempt market dealer under the Act. It is also registered as a portfolio manager in Alberta, Manitoba and Quebec.
11. Clients of the Filer will not also be clients of GMG PC.
12. The Filer's Advisers will have business cards and letterhead which identify them to the U.S. Clients as working on behalf of Gavin Management Group, Inc. and all communication by the Filer's Advisers with U.S. Clients will be through the Filer.
13. All U.S. Clients of the Filer will enter into an investment management agreement or similar documentation with the Filer, at which time the U.S. Clients will also receive disclosure that explains the relationship between the Filer and GMG PC.
14. To avoid client confusion with respect to GMG PC or any other affiliate, the investment management agreement or similar documentation, account statements, performance reporting, contracts and disclosure documents of the Filer will clearly identify the Filer as the adviser to the U.S. Clients.
15. U.S Clients will be advised at the time they enter into an investment management agreement or similar documentation with the Filer, and periodically thereafter, that if they relocate to a Canadian jurisdiction, their accounts will have to be transferred to GMG PC or another adviser that is appropriately registered or relying on an exemption from registration in the Canadian jurisdiction.
Order
The Commission being satisfied that it would not be prejudicial to the public interest for it to grant the Requested Exemption, the Commission rules that the Requested Exemption is granted provided that:
(a) in acting as an adviser to the U.S. Clients, the Filer acts only through the Filer's Advisers;
(b) the Filer and each of the Filer's Advisers is appropriately registered, licensed or otherwise permitted under applicable legislation in the United States to act as an adviser to the U.S. Clients;
(c) the Filer and GMG PC remain affiliates and GMG PC remains a registrant; and
(d) each of the Filer's Advisers maintains registration under the Act as an advising representative of GMG PC or the UDP of GMG PC.
June 3, 2011