Services Financiers Falet Capital Inc. and Groupe Cloutier Investissements Inc.
Relief under paragraph 4.1(1)(a) and (b) of National Instrument 31-103 Registration Requirements, Exemptions and Ongoing Registrant Obligations a registered firm must not permit an individual to act as a dealing, advising or associate advising representative of the registered firm if the individual is registered as a dealing, advising or associate advising representative of another firm registered in any jurisdiction of Canada. The individual will have sufficient time to adequately serve both firms. Conflicts of interest are unlikely to arise because clients of the Filers and the products offered by the Filers differ considerably. The firms have policies in place to handle potential conflicts of interest. The firms are exempted from the prohibition in 4.1(1)(a) and 4.1(1)(b) for a limited time period.
Applicable Legislative Provisions
Multilateral Instrument 11-102 Passport System, s. 4.7.
National Instrument 31-103 Registration Requirements, Exemptions and Ongoing Registrant Obligations, ss. 4.1 and 15.1.
June 7, 2022
IN THE MATTER OF SECURITIES LEGISLATION OF QUEBEC AND ONTARIO (the "Jurisdictions") AND IN THE MATTER OF THE PROCESS FOR EXEMPTIVE RELIEF APPLICATIONS IN MULTIPLE JURISDICTIONS AND IN THE MATTER OF SERVICES FINANCIERS FALET CAPITAL INC. AND GROUPE CLOUTIER INVESTISSEMENTS INC.
The securities regulatory authority or regulator in each of the Jurisdictions (the Decision Makers) has received an application from Services Financiers Falet Capital Inc. (SFFC) and Groupe Cloutier Investments Inc. (GCI) (collectively, the Filers) for a decision under the securities legislation of the Jurisdictions (the Legislation) for relief from the requirements set out in subsections 4.1(1)(a) and 4.1(1)(b) of National Instrument 31-103 Registration Requirements, Exemptions and Ongoing Registrant Obligations (NI 31-103), pursuant to section 15.1 of NI 31-103, to permit, Mr. Alexandre Falet (Mr. Falet), to register as a Dealing Representative (Mutual Fund Dealer) of GCI whilst also acting as a Dealing Representative (Mutual Fund Dealer), Ultimate Designated Person (UDP) and Chief Compliance Officer (CCO) of SFFC (the Exemption Sought).
Under the Process for Exemptive Relief Applications in Multiple Jurisdictions (for a dual application):
(a) The Autorité des marchés financiers (AMF) is the principal regulatory authority for the purposes of this application;
(b) The Filers has provided notice that subsection 4.7(1) of Multilateral Instrument 11-102 Passport System (MI 11-102) is intended to be relied upon in New Brunswick and Nova Scotia; and
(c) the decision is the decision of the principal regulator and evidences the decision of the securities regulatory authority or regulator in Ontario.
Terms defined in National Instrument 14-101Definitions (NI 14-101) and MI 11-102 have the same meaning when used in this decision, unless otherwise defined.
This decision is based on the following facts represented by the Filers:
1. SFFC is incorporated under the Business Corporations Act (Quebec). Its head office is located at 6360 Jean-Talon E, suite 219, in Montreal, Quebec, H1S-1M8.
2. SFFC is registered in Quebec as a mutual fund dealer. SFFC offers a selection of mutual funds for individual clients seeking long term investments through RRSP (and other retirement plans), RESP, TFSA and non-registered accounts.
3. SFFC is not in violation of any of the requirements prescribed by securities legislation in any jurisdiction of Canada.
4. The AMF is the principal regulator of SFFC.
5. GCI is a corporation incorporated under the Canada Business Corporations Act. Its head office is located at 1720 de la Sidbec south street, in Trois-Rivières, Quebec, G8Z-4H1. GCI offers a large selection of mutual funds for individual clients seeking long term investments through RRSP (and other retirement plans), RESP, TFSA and non-registered accounts.
6. GCI is registered as a mutual fund dealer in Quebec, Ontario, New Brunswick and Nova Scotia, as well as an education savings plan dealer and an exempt market dealer in Quebec.
7. GCI is a subsidiary of Groupe Cloutier services financiers.
8. GCI is not in violation of any of the requirements prescribed by securities legislation in any jurisdiction of Canada.
9. The AMF is the principal regulator of GCI.
10. The Filers are seeking to register Mr. Falet as a Dealing Representative for GCI to facilitate the transfer of SFFC client accounts to GCI.
11. The business reason for the Exemption Sought is that Mr. Falet made a career decision to concentrate his work as a Dealing Representative only and join GCI.
Registration of Mr.Falet as a dealing representative of GCI.
12. No conflicts of interest have been identified as a result of the Exemption Sought. The Exemption Sought is time limited and the SFFC clients in question are already clients of Mr. Falet.
13. Mr. Falet will have sufficient time to adequately serve both Filers since he will only serve existing clients of his until the transition of SFFC clients to GCI is complete.
14. Mr. Falet will act fairly, honestly, in good faith, and in the best interests of the clients of each of the Filers.
15. The dual registration will facilitate the client account transfer process and allow Mr. Falet to:
(a) wind down the transactions and activities of SFFC, including the transfer of accounts and voluntary cancellation by SFFC of its registration in the jurisdictions where it is registered, and;
(b) provide service to SFFC clients that have not yet been transferred to GCI.
16. The requested Exemption Relief will expire upon the date of acceptance of SFFC's request for voluntary cancellation by the AMF.
Each of the Decision Makers is satisfied that the decision meets the test set out in the Legislation for the Decision Maker to make the decision.
The decision of the Decision Makers under the Legislation is that the Exemption Sought is granted provided that:
a) Mr. Falet is subject to the supervision by and the applicable compliance requirements of both Filers;
b) The Filers ensure that Mr. Falet has sufficient time and resources to adequately serve each Filer and its respective clients;
c) The Filers each have adequate policies and procedures in place to address any conflicts of interest that may arise as a result of the dual registration of Mr. Falet and deal appropriately with any such conflicts;
d) Mr. Falet will transact exclusively on behalf of existing SFFC clients awaiting the transfer of their SFFC accounts to GCI. Furthermore, SFFC will not open any new client accounts; and
e) The Exemption Sought expires on the date on which SFFC registration is revoked.
French version signed by:
Superintendent, Client Services and Distribution oversight
Autorité des marchés financiers
OSC File #: 2022/0173