The London Metal Exchange – s. 144 of the OSA and s. 78 of the CFA

Headnote

Section 144 of the Securities Act (Ontario) (OSA) and sections 38 and 78 of the Commodity Futures Act (Ontario) (CFA) -- variation of an order exempting The London Metal Exchange from the requirement to be registered as a commodity futures exchange under section 15 of the CFA and recognized as an exchange under section 21 of the OSA -- extension of exemption from the registration requirement under section 22 of the CFA with respect to trades in contracts on The London Metal Exchange by banks listed in Schedule I to the Bank Act (Canada) entering orders as principal and only for their own accounts.

Applicable Legislative Provisions

Securities Act, R.S.O. 1990, c. S.5, as am., s. 144.

Commodity Futures Act, R.S.O. 1990, c. C.20, as am., ss. 22, 38, 78.

IN THE MATTER OF
THE SECURITIES ACT,
R.S.O. 1990, CHAPTER S.5,
AS AMENDED
(the OSA)

AND

IN THE MATTER OF
THE COMMODITY FUTURES ACT,
R.S.O. 1990, CHAPTER C.20,
AS AMENDED
(the CFA)

AND

IN THE MATTER OF
THE LONDON METAL EXCHANGE

ORDER
(Section 144 of the OSA and section 78 of the CFA)

WHEREAS the Ontario Securities Commission (Commission) issued an order dated December 21, 2018 (Exemption Order) exempting The London Metal Exchange (LME) from the requirement to be recognized as an exchange under subsection 21(1) of the OSA and the requirement to be registered as a commodity futures exchange under subsection 15(1) of the CFA (Exchange Relief);

AND WHEREAS under section 38 of the CFA, the Exemption Order also exempts trades in contracts on the LME by a bank listed in Schedule I to the Bank Act (Canada) (Bank) entering orders as principal and only for its own account from the registration requirement under section 22 of the CFA (Bank Relief), subject to certain terms and conditions regarding the expiry of the Bank Relief;

AND WHEREAS, on March 11, 2021, the Commission varied the Exemption Order as part of a broader order to streamline the regulatory reporting requirements applicable to foreign commodity futures exchanges, multilateral trading facilities and swap execution facilities carrying on business in Ontario and reduce regulatory burden (March 2021 Variation Order);

AND WHEREAS the LME has applied to the Commission under section 144 of the OSA and under section 78 of the CFA for an order varying the Exemption Order to remove the provision that the Bank Relief will expire five years after the date of the Exemption Order;

AND WHEREAS the Commission has removed similar expiry provisions regarding registration relief granted to Banks trading contracts on other exchanges exempt from recognition under subsection 21(1) of the OSA and on other commodity futures exchanges exempt from registration under subsection 15(1) of the CFA;

AND WHEREAS, based on the application and the representations made to the Commission by the LME, the Commission has determined that it is not prejudicial to the public interest to vary the Exemption Order on the basis requested;

IT IS ORDERED, pursuant to section 144 of the OSA and section 78 of the CFA, that the Exemption Order is varied as follows:

1. Paragraph b.(iii) of the terms and conditions of the Exemption Order is repealed.

DATED this 21st day of December 2023.

"Michelle Alexander"
Manager, Market Regulation