Securities law "exemptions". A license to steal?

[admin]

Looking at the largest securities commission (OSC) site in Canada, under the topic, Rulings, Orders and Decisions will show a person how easily and often exemptions are granted in order to allow investment firms to go around the law of the day.

www.osc.gov.on.ca

These same Securities Commission who allow these exemptions, refuse to allow public input into these applications, refuse to notify the public which firms (or which investments) are being sold while being outside the law. It is as if the Commissions are acting as an agent to help investment firms "put lipstick on the pig" so it can be more easily sold.

It is also seemingly impossible to have these securities commissions provide answers on some of these exemptions. Simple questions such as, "what possible public interest is there is granting this specific exemption" are met with an "above the law" response.

Shame on thirteen provincial and territorial commissions who purport to work for and to protect the Canadian public, while doing little more than recycling investment firm employees, and legal apologists for the industry.

Read on to see how the slipperly slope of exemptions can lead us to billions and billions of damages to Canadians. All legal of course.

[admin]

visit this site if you wish to see how a Securities Commission promotes it's ability to "help" issuers around the law.

Great marketing piece for Sask Commission. Perhaps not so great for clients.

[admin]

so the readers digest version of what I find so amazing, is that NOT ONLY do our top securities cops, (the 13 Securities Commisisons) delegate matters of the law down to trade and lobby groups (lazy at best, breach of trust criminal violation at worst),

but

in addition to this, these same thirteen "southern Sherrif's" grant "free rides" (legal exemptions) to the tune of 500 or 600 times a year, so that these same firms (the same ones who run the lobby groups and trade associations) can freely break securities laws intended to protect the public interest.

Great work if you can get it. Plus the top sherrif's get paid over $500,000 while they play this game with the public interest.

[admin]

FREE RIDER PASSPORT
further to the last post where I hinted at a free ride Passport system being already in place and already failing to protect the public interest.......................

(by the way, if you can obtain a copy of FREE RIDER, by John Lawrence Reynolds, you may never trust the Canadian financial system again. No it is not a consiracy theory book, no it is not fiction and no I am not shitting you when I say this)
but I digress

I checked on the OSC web page at
http://www.osc.gov.on.ca/Regulation/Ord ... _index.jsp

and found out just how many PASSPORT type orders etc, that all thirteen of our securities teams have co-operated on

The number of rulings, orders, exemptions to deadlines, exemptions to securities law, etc, etc etc, amounted to SIXTY FOUR listed under the letter A alone, in the year 2004 alone.

If I mathematically extrapolate how many fall under the entire alphabet, for the last ten or so years I come up with a zillion. They may or may not all be Passport approval situations, but enough of them are to ensure that we are being misled by provincial commissions and or ministers when they say a passport system is a new solution. It is not new, and it is not a solution. Unless we want to continue to have our top securities police in each province still able to sleep on the job and be paid for it.

below is the actual exemption that all canadians deserve a royal commission on:

IN THE MATTER OF
NATIONAL INSTRUMENT 81-105
MUTUAL FUND SALES PRACTICES
AND
IN THE MATTER OF
THE MUTUAL RELIANCE REVIEW SYSTEM
FOR EXEMPTIVE RELIEF APPLICATIONS
AND
IN THE MATTER OF
ASSANTE CORPORATION

MRRS DECISION DOCUMENT
WHEREAS the local securities regulatory authority or regulator (the "Decision Maker") in each of of British Columbia, Alberta, Manitoba, Ontario, New Brunswick, Nova Scotia, Prince Edward Island, Newfoundland, Nunavut, the Yukon, and Northwest Territories (the "Original Jurisdictions") and Saskatchewan and Quebec (collectively with the Original Jurisdictions, the "Jurisdictions") have received an application from Assante Corporation (the "Filer") on behalf of itself and its current and future affiliated distributors and their respective representatives from time to time for a decision under section 9.1 of National Instrument 81-105 Mutual Fund Sales Practices ("NI 81-105") that the prohibitions on certain rebates contained in section 7.1 of NI 81-105 shall not apply to rebates paid by representatives to clients who are switching from third party products to mutual funds managed by, or by an affiliate of, the Filer;

http://www.osc.gov.on.ca/Regulation/Ord ... ssante.jsp

[admin]

The OSC MRRS Exemption Decision enabling the CIBC and Royal Bank mutual funds to purchase Teranet Income Fund IPO units is found at the following OSC website addresses. This decision is dated June 6, 2006, but its posted date is June 9, 2006, the same date for the posting of the final prospectus and its receipt by the OSC. This MRRS decision explicitly permits the CIBC and Royal Bank mutual funds to purchase Teranet Income Fund IPO units without requiring any public disclosure of this for 97 days after the end of the IPO distribution, which would be 97 days from about June 15th. The number of shares permitted are any fixed number that is submitted by the CIBC and Royal Bank mutual funds, of which the IPO syndicate allocated number must be purchased within five days of June 9, 2006. The remaining amount of this fixed number of units, not filled in the IPO distribution, may be filled if the underwriting syndicate exercises its Greenshoe overallotment option for up to 10.5 million units within 30 days.

There does not appear to be any restrictions on the CIBC and Royal Bank mutual funds' purchase of Teranet Income Fund units in the secondary market. It is worth noting that the Ontario Government is free to have its approximately 15 million Teranet Income Fund Units sold in an orderly manner in the secondary market by its unnamed designee after 90 days. This MRRS decision would appear to enable the CIBC and Royal Bank mutual funds to be the buyers of the Ontario Government-owned Teranet Income Fund shares in the secondary market after the 90 days, with the requirement for public disclosure on their IPO and IPO overallotment purchases not being required until 7 days later.

I note below the clauses in this MRRS decision that I find interesting.

http://www.osc.gov.on.ca/Regulation/Ord ... ndex.jsp#c

June 9, 2006 CIBC Asset Management Inc., CIBC Global Asset Management Inc. and RBC Asset Management Inc. - MRRS Decision


http://www.osc.gov.on.ca/Regulation/Ord ... casset.jsp

10. Pursuant to an underwriting agreement the Issuer and the Underwriters will enter into in respect of the Offering prior to the Issuer filing the final prospectus for the Offering, the Issuer will agree to sell to the Underwriters, and the Underwriters will agree to purchase, as principals, all of the Units offered under the Offering.

15. The first quarterly meeting of the Independent Committee of the Dealer Managed Funds of RBC Asset Management Inc., immediately following the end of the 60-day period following the completion of the Distribution (the 60-Day Period) (the Distribution and the 60-Day Period together, the Prohibition Period), is scheduled to be held on September 15, 2006.

XI. The Dealer Manager files a certified report on SEDAR (the SEDAR Report) in respect of each Dealer Managed Fund, no later than 97 days after the end of the Distribution

XIII. The Dealer Manager:
(a) expresses an interest to purchase on behalf of Dealer Managed Funds and Managed Accounts a fixed number of Units (the Fixed Number) to an Underwriter other than its Related Underwriter;

(b) agrees to purchase the Fixed Number or such lesser amount as has been allocated to the Dealer Manager no more than five business days after the final prospectus has been filed;

(c) does not place an order with an underwriter of the Offering to purchase an additional number of Units under the Offering prior to the completion of the Distribution, provided that if the Dealer Manager was allocated less than the Fixed Number at the time, the final prospectus was filed for the purposes of the Closing, the Dealer Manager may place an additional order for such number of additional Units equal to the difference between the Fixed Number and the number of Units allotted to the Dealer Manager at the time of the final prospectus in the event the Underwriters exercise the Over-Allotment Option;

Diane Urquhart

Independent Consulting Analyst

Telephone: (905) 822-7618

(advocate comment: if you are a bank who is underwriting a share sale, and if said share sale is not "going" very well, you can always apply for exemptive relief from the waiting period that ordinarily prevents you from dumping unsold shares onto your bank mutual fund clients accounts......POOF!....your problem is solved using bank mutual fund customer's money) They will never know what hit them:)

[admin]

while researching a story in Saskatoon I have found myself pointed to a number of legal "passports" being handed out by our trusted securities commissions.

I find that they grant exemptions to the law almost daily, to allow investment firms to operate more "easily".
I also find a relationship with the industry of an almost incestuous nature, when compared to the way that securities commissions treat abused investors or the public interest.

If you would care to look for yourself how easy and how many "passports" around the law that are granted to members of the investment industry go to the OSC web site, at http://www.osc.gov.on.ca and look under the heading "orders, ruings and decisions", then click on any year and any letter of the alphabet to find out how many things have gone on that the public may not know of.

I would have to say that they harm clients by a factor that outnumber decisions that help clients by one thousand to one.