Ontario Securities Commission Bulletin
Issue 49/15 - April 16, 2026
Ont. Sec. Bull. Issue 49/15
• Ontario Securities Commission et al. -- ss. 127(1), 127.1
• Ontario Securities Commission and Liquidnet Canada Inc. -- ss. 127(1), 127.1
• Ontario Securities Commission and Bradley J. Moynes
• Ontario Securities Commission et al.
• Ontario Securities Commission et al.
• Internet Sciences Inc. et al.
• Ontario Securities Commission and Liquidnet Canada Inc.
• Ontario Securities Commission and Colin Heatherington
• Ontario Securities Commission et al.
• Ontario Securities Commission and Bradley J. Moynes -- ss. 127(1), 127(4.0.3)
• Ontario Securities Commission et al. -- ss. 127(1), 127(4.0.2)
• Ontario Securities Commission and Colin Heatherington -- ss. 127(1), 127(4.0.1)
• Guardian Capital Group Limited -- s. 1(6) of the OBCA
• Titanium Transportation Group Inc.
• Burgundy Asset Management Ltd.
• Manulife Investment Management Limited et al.
• Temporary, Permanent & Rescinding Issuer Cease Trading Orders
• Temporary, Permanent & Rescinding Management Cease Trading Orders
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Ontario Securities Commission et al. -- ss. 127(1), 127.1
FILE NO.: 2026-24
BETWEEN:
Subsection 127(1) and section 127.1 of the Securities Act, RSO 1990, c S.5
PROCEEDING TYPE: Enforcement Proceeding
HEARING DATE AND TIME: May 8, 2026 at 10:00 a.m.
LOCATION: By videoconference
The purpose of this proceeding is to consider whether it is in the public interest for the Capital Markets Tribunal to make the orders requested in the application filed by the Commission on April 9, 2026.
The hearing set for the date and time indicated above is the first case management hearing in this proceeding, as described in subsection 14(4) of the Capital Markets Tribunal Rules of Procedure.
Any party to the proceeding may be represented by a representative at the hearing.
IF A PARTY DOES NOT ATTEND, THE HEARING MAY PROCEED IN THE PARTY'S ABSENCE AND THE PARTY WILL NOT BE ENTITLED TO ANY FURTHER NOTICE IN THE PROCEEDING.
This Notice of Hearing is also available in French on request of a party. Participation may be in either French or English. Participants must notify the Tribunal in writing as soon as possible if the participant is requesting a proceeding be conducted wholly or partly in French.
L'avis d'audience est disponible en français sur demande d'une partie, que la participation à l'audience peut se faire en français ou en anglais et que les participants doivent aviser le Tribunal par écrit dès que possible si le participant demande qu'une instance soit tenue entièrement ou partiellement en français.
Dated at Toronto this 9th day of April, 2026.
For more information
Please visit capitalmarketstribunal.ca or contact the Registrar at registrar@capitalmarketstribunal.ca.
BETWEEN:
(Subsection 127(1) and Section 127.1 of the Securities Act, RSO 1990, c S 5)
1. This matter involves the fraudulent diversion of corporate assets by certain individuals including directors and officers of a publicly-traded mining company, Emerita Resources Corp. It also involves repeated misleading public statements about a separate Emerita project.
2. In September 2018, Emerita exercised an option to acquire a 100% interest in the Falcon Project, a potential lithium project in Brazil. Between 2018 and 2021, Emerita discussed the Falcon Project as a current opportunity in its public filings. In May 2021, Emerita announced it had "relinquished" the Falcon Project as it had "not been successful in liquidating" it. In fact, Emerita had made no effort to market the project since 2019. Instead, between May 2021 and May 2022, four directors and/or officers of Emerita (David Patrick Gower, Michael Lawrence Guy, Sergio Damian Lopez, and Gregory Francis Duras) together with Hélio Botelho Diniz, the directing mind of the Falcon Project's vendor, participated in a course of conduct which ultimately diverted Falcon Project mining claims to a new public company, Lithium Ionic Corp. All of Gower, Guy, Lopez, Duras, and Diniz became shareholders, as well as directors and/or officers of Lithium Ionic. In addition, Gower, Guy, Lopez, and Duras also participated in Emerita making misleading public statements about its supposed "relinquishment" of the Falcon Project.
3. Further, during the investigation, Gower and Diniz provided misleading information to Commission investigators about a purported release of the Falcon Project by Emerita in March 2020.
4. Directors and officers of companies must act honestly and in the best interests of the companies they serve, not usurp corporate assets for themselves nor attempt to conceal their actions from investors and the Commission.
5. In addition, between October 2017 and May 2023, Emerita's public filings contained untrue and misleading statements and omissions concerning the Plaza Norte project, a zinc project in Spain. Emerita's public filings were misleading about the length and status of the permit for, and Emerita's ownership interest in, the joint venture via which it was pursuing the Plaza Norte project. Such misstatements were authorized, permitted or acquiesced in by Gower, Lopez, Duras, and another Emerita director and officer, Joaquin Merino-Marquez. Maintaining title and/or rights to property is of critical importance to a mining exploration and development company. Only after the Commission began investigating did Emerita make further public statements seeking to correct its misstatements relating to the Plaza Norte project.
The Ontario Securities Commission makes the following allegations of fact:
6. Emerita is a mining company and reporting issuer, continued in Ontario and based in Toronto. It is listed on the TSX Venture Exchange and elsewhere. The individual Respondents are:
a. Gower, an Ontario resident and the Chief Executive Officer and a director of Emerita;
b. Guy, an Ontario resident, the Chairman of Emerita, and a registered chief compliance officer and dealing representative with another company;
c. Lopez, an Ontario resident, lawyer, and the Corporate Secretary of Emerita;
d. Duras, an Ontario resident, Certified Professional Accountant, Certified General Accountant, and the Chief Financial Officer of Emerita;
e. Merino-Marquez, a resident of Spain and the President and a director of Emerita; and
f. Diniz, a resident of Brazil and, at material times, the directing mind of Falcon Metais Ltda. (Falcon Metais), a Brazilian company.
7. Gower, Guy, Lopez, Diniz, and Duras engaged or participated in a fraud perpetrated on Emerita and its shareholders, benefitting themselves. They directly or indirectly engaged or participated in acts or a course of conduct which ultimately resulted in the misappropriation of assets of Emerita for a new company in which they are shareholders. Gower, Guy, Lopez, and Duras acted contrary to their fiduciary duties to Emerita. In addition, Gower, Guy, Lopez, and Duras participated in Emerita making misleading statements about the 'relinquishment' of its interest in the Falcon Project. The misconduct of Gower, Guy, Diniz, Lopez, and Duras was dishonest and harmed or put at risk of prejudice the economic interests of Emerita and investors.
Option Agreement
8. In June 2016, Emerita entered into an agreement (Option Agreement) with Falcon Metais for an option to acquire mining claims, applications, leases or other forms of mineral rights located in Brazil comprising the Falcon Litio MG Project (Falcon Project).
9. At material times, Falcon Metais provided services to mining projects and companies in Brazil. In 2017 and 2018, Falcon Metais was providing services to Emerita's Brazilian subsidiary in relation to another mining project.
10. Among other things, the Option Agreement provided that:
a. Falcon Metais:
i. was the sole title holder and beneficial owner of the Falcon Project; and
ii. would hold the Falcon Project in trust for Emerita, or its nominee, until the project was assigned and transferred to Emerita or its nominee; and
b. Emerita could exercise the option by issuing a total of 1.5 million common shares to Falcon Metais.
11. Emerita did issue the shares required to exercise the option, in three equal tranches. On September 12, 2018, Emerita issued the third tranche of 500,000 shares and exercised the option. Notwithstanding the provisions of the Option Agreement, at Diniz' direction, Emerita in fact issued the shares to HFX Consultoria Empresarial Ltda., a company owned and controlled by Diniz.
12. Although Emerita exercised the option in September 2018, title to the Falcon Project was never transferred to Emerita or its nominee.
Emerita's Public Statements about the Falcon Project
13. On June 13, 2016, Emerita announced it had entered into the Option Agreement. It also announced, on September 12, 2017 and September 12, 2018, respectively, its issuance of the second and third tranches of shares under the Option Agreement. In the 2017 and 2018 announcements, Gower was quoted as describing the Falcon Project as an "exceptional opportunity to add value at a low [orvery low] cost".
14. After issuing the third tranche of shares and exercising the option, Emerita continued to refer to the Falcon Project in its interim and annual filings. In its financial statements and management's discussion and analysis (MD&A) filed between September 2018 and February 2021, it described the Option Agreement and Falcon Project, which it identified as an exploration property. In its MD&A in that period, Emerita repeated that the Falcon Project was an opportunity to "add value at low cost".
15. In December 2020, while preparing for an agency agreement for a private placement, Gower confirmed to Lopez and others that Emerita's interest in the Falcon Project continued. Duras also received this information. Gower sought and received a list of mining claims, etc., comprising the Falcon Project from Diniz on December 10, 2020. Gower provided that list to Lopez for inclusion in a schedule to the agency agreement. The final agency agreement was filed by Emerita as a material document on January 13, 2021.
16. On May 27, 2021, Emerita stated for the first time that it had 'relinquished' the Falcon Project. In particular, the MD&A stated: "After having not been successful in liquidating the project in some form, the Company has now relinquished the Falcon project." In its next MD&A, filed August 26, 2021, Emerita stated that "As of December 2020, the Company has relinquished its property in Brazil in favour of focusing on projects in Spain". Emerita repeated the August 26, 2021 statement in its annual MD&A filed January 28, 2022 (the May and August 2021, and January 2022 statements, each a Relinquishment Statement).
Misappropriation of the Falcon Project & Misleading Statements
17. The Relinquishment Statements were false and misleading. In reality, between May 2021 and May 2022, Gower, Guy, Lopez, Duras, and Diniz engaged or participated in acts or a course of conduct that resulted in Falcon Project claims being owned, indirectly, first by a private company controlled by Gower, Guy, Lopez, and Diniz, and ultimately by a new public company in which they were all shareholders as well as directors or officers.
18. Diniz had begun, around December 2020, taking steps to transfer ownership of the mining claims, etc., comprising the Falcon Project from Falcon Metais to MGLIT Empreendimentos Ltda. (MGLIT), another Brazilian company he controlled.
19. In May 2021, before the May 2021 Relinquishment Statement:
a. Gower, Diniz, and Guy discussed pursuing the Falcon Project without Emerita;
b. Gower discussed making the May 2021 Relinquishment Statement with Diniz; and
c. Gower, Guy, Lopez, and Duras participated in the preparation of the May 2021 Relinquishment Statement.
20. In June 2021, Gower confirmed to Diniz an intention to form a private company in Canada that could acquire MGLIT, obtain financing, and ultimately be taken public. In confirming that intention, Gower stated, among other things "We need a little distance between a transaction and Emerita".
21. Thereafter, Gower, Guy, Lopez, Diniz, and Duras engaged or participated in forming and advancing a new company to pursue former Falcon Project mining claims. Ultimately, as set out below, by May 2022, former Falcon Project claims became indirectly owned by another public issuer, Lithium Ionic. Gower, Guy, Lopez, Diniz, and Duras were directors and/or officers of Lithium Ionic when it was formed and remain shareholders of Lithium Ionic.
22. Steps taken to form and advance Lithium Ionic included:
a. incorporating a new entity, LI-Ionic Inc., subsequently renamed Lithium Ionic Inc. (LI PrivateCo);
b. agreeing on a capital structure, issuing shares, and selecting directors and officers for LI PrivateCo;
c. arranging for LI PrivateCo to acquire ownership of MGLIT (and thus have indirect, beneficial ownership of former Falcon Project claims);
d. planning and undertaking private placements for LI PrivateCo in December 2021 and February 2022, which raised a total of nearly $20 million;
e. obtaining a technical report and title opinion regarding the mining claims; and
f. planning and undertaking an amalgamation to bring about Lithium Ionic as a public issuer.
23. On July 5, 2021, LI PrivateCo was incorporated. On July 6, 2021, Gower, Guy, Lopez, and Diniz, as the directors of LI PrivateCo, passed a resolution to issue 31,100,000 common shares at a price of $0.0000001. Gower, Guy, Lopez, and Diniz received the majority of the 31,100,000 shares issued; in particular:
a. Gower, together with his spouse and a friend, received a total of 8,000,000;
b. Guy received 8,000,000;
c. Diniz received 8,000,000;
d. Lopez, together with his spouse received a total of 6,000,000; and
e. Duras received 500,000.
24. In November and December 2021, Gower, Guy, Lopez, Diniz, and Duras, directly or indirectly through corporations they controlled, each entered into agreements with LI PrivateCo to provide consulting services in exchange for varying monthly fees and other compensation. Such consulting agreements were subsequently amended.
25. In late 2021 and early 2022, LI PrivateCo acquired all the quota (shares) of MGLIT, the entity which then held former Falcon Project claims.
26. Lithium Ionic was formed, as a public issuer, on May 19, 2022 via an amalgamation involving LI PrivateCo and two other corporations (POCML 6 Inc. and 1000088600 Ontario Inc.) (the Qualifying Transaction). Following or as part of the Qualifying Transaction:
a. LI PrivateCo became a wholly owned subsidiary of Lithium Ionic; and
b. Shares of LI PrivateCo were exchanged on a 1:1 basis for Lithium Ionic shares.
27. Lithium Ionic is listed on the TSX Venture Exchange and elsewhere. Its head office is located at the same address in Toronto as Emerita's head office. Gower, Guy, and Diniz have been directors of Lithium Ionic since its establishment. Diniz is Lithium Ionic's President, and Lopez is its Corporate Secretary. Duras was Lithium Ionic's Chief Financial Officer from its establishment until November 2022.
28. Lithium Ionic continues to indirectly own former Falcon Project claims, one of which it now calls the Bandeira Project and refers to as its "flagship asset".
29. Gower, Guy, Lopez, Diniz, and Duras received or have been allocated payments and other benefits, including securities, from LI PrivateCo and Lithium Ionic in addition to the Lithium Ionic shares they received as a result of the Qualifying Transaction.
30. At all material times, Gower, Guy, Lopez, and Duras owed fiduciary duties to Emerita, including to act honestly, in good faith, loyally, and in Emerita's best interests. Moreover, they owed Emerita duties of full disclosure and the avoidance of conflicts of interest. Each acted dishonestly, and contrary to their duties, by engaging or participating in acts or a course of conduct relating to the diversion of former Falcon Project claims from Emerita and to Lithium Ionic. None disclosed their intentions or actions in that regard to Emerita.
31. In all the circumstances, Diniz also acted dishonestly by engaging or participating in acts or a course of conduct relating to the diversion of former Falcon Project claims from Emerita and to Lithium Ionic.
32. In addition, Gower, Guy, Lopez, and Duras also acted dishonestly by engaging or participating in the development and filing of the Relinquishment Statements, which acts were part of the fraud on Emerita and also amount to fraud on investors and potential investors of Emerita. The Relinquishment Statements were misleading or untrue because:
a. In respect of the May 2021 Relinquishment Statement, Emerita had not made any attempt to sell or otherwise monetize the Falcon Project since 2019;
b. In respect of the August 2021 and January 2022 Relinquishment Statements, Emerita had not relinquished the Falcon Project as of December 2020;
c. None mentioned that Gower, Guy, Lopez, and Duras were going to, and by the later point had become involved in a new company which was intended to pursue former Falcon Project claims; and/or
d. The statements give the misleading impression that the Falcon Project was abandoned because it had no value when, in fact, Gower, Guy, Lopez, and/or Duras considered it to have potential value.
33. During the investigation, Gower and Diniz made statements to Commission investigators that were, in a material respect, misleading or untrue.
34. In particular, when examined during the investigation, both Gower and Diniz asserted that Gower had in March 2020 signed a document abandoning Emerita's interest in the Falcon Project in exchange for a release from Falcon Metais (Purported Release Letter). Both Gower and Diniz also claimed that the Purported Release Letter had been prepared by Diniz, and that Diniz had brought the document to Gower, who signed it by hand in Diniz' presence in Toronto in early March 2020.
35. These statements were false and misleading. The Purported Release Letter was not signed by Gower in March 2020. Rather, the Purported Release Letter was created at some later time.
36. From October 2017 until May 2023, Emerita made repeated statements in its public filings that were, in a material respect, misleading or untrue.{1} The statements concern the permit{2} for, and Emerita's interest in the Plaza Norte Project, a high-grade zinc project in northern Spain. Gower, Lopez, Duras, and Merino-Marquez are individually liable for these untrue and misleading statements.
Plaza Norte Project Background
37. Emerita conducts business in Spain via a wholly-owned subsidiary, Emerita Resources España S.L. (Emerita Spain). Beginning in 2016, Emerita indicated it intended to explore and develop mining projects in the Iberian Peninsula via a joint venture with the Aldesa Group, a group of companies with construction industry experience in Spain.
38. Subsequently, Emerita Spain and the Aldesa Group agreed to pursue the Plaza Norte Project via a company, Cantábrica del Zinc (CDZ). Initially, Emerita Spain and the Aldesa Group each owned 50% of CDZ. Emerita Spain was entitled to appoint two of CDZ's four directors. Merino-Marquez and Gower, respectively, became directors of CDZ in 2017 and August 2018.
39. In or about June 2017, CDZ submitted a tender response to the Spanish authorities seeking authorization to explore the Plaza Norte Project.
40. The Plaza Norte Project was a significant, and often the most significant project for Emerita over a considerable period of time. Among other things:
a. Between November 2017 and July 2019, Emerita raised more than $9 million via private placements, the documents for each of which referred to funding being used for, at least in part, Plaza Norte exploration;
b. Plaza Norte featured prominently in Emerita's public filings in 2018 and through 2020, including its financial statements and MD&A. In 2019, Emerita issued news releases about drilling results on the project;
c. Between June 2018 and October 2021, Plaza Norte was the main project featured on Emerita's website, where it was referred to as "Emerita's key project"; and
d. Emerita filed a technical report under NI 43-101 for the Plaza Norte Project on February 11, 2019. From that time until May 28, 2021, Plaza Norte was the only Emerita project for which a technical report had been filed.
41. On January 28, 2022, Emerita made conflicting public statements about the Plaza Norte Project in three documents it issued or filed that day. In particular:
a. in a news release, Emerita said it viewed another project as having stronger technical merit, and that Emerita Spain and Aldesa had agreed to dissolve the joint venture and discontinue CDZ;
b. in financial statements, Emerita indicated that the project "is in the process of being cancelled at September 30, 2021"; however,
c. in MD&A, Emerita indicated only that the project was a "lower priority", and referred to an expectation of continued drilling of the Plaza Norte Project by CDZ.
42. Emerita continued to provide updates about the Plaza Norte Project beyond January 28, 2022. In interim MD&A filed on August 29, 2022, Emerita repeated certain details from the January 28, 2022 news release but added: "the project is expected to be sold or relinquished." Emerita repeated that the Plaza Norte Project may be sold, or relinquished, in subsequent public filings.
Untrue & Misleading Statement #1: Plaza Norte permit length
43. On October 26, 2017, Emerita announced CDZ had won the tender for the Plaza Norte Project. After the completion of various steps by CDZ and Spanish authorities, the initial permit for the Plaza Norte Project was in fact issued on or about December 14, 2018.
44. Between October 2017 and May 2022, Emerita made untrue statements that the initial permit for the Plaza Norte Project was granted for a three-year term, when in fact CDZ had applied for and was granted a 13-month exploration permit. Such untrue statements were contained in interim and annual MD&A and financial statements, a material change report, and a technical report.
45. On May 30, 2023, Emerita first disclosed, via interim MD&A, that the initial permit for the Plaza Norte Project had only allowed exploration work for 13 months.
Untrue & Misleading Statement #2: Plaza Norte permit status
46. From January 28, 2020 until May 30, 2023, Emerita made statements in interim and annual MD&A and financial statements to the effect that CDZ had a valid or current permit for the Plaza Norte Project. Such statements were untrue or misleading because:
a. the initial permit granted to CDZ for the Plaza Norte Project expired on January 20, 2020;
b. CDZ made a request to the Spanish authority that the permit be renewed, which was denied on or about February 5, 2020;
c. Beginning on March 5, 2020 and continuing thereafter, CDZ pursued a number of administrative and court appeal processes relating to the Plaza Norte Project permit, at least some of which remained ongoing as of May 2023. Among other things, during these processes, on or about April 9, 2021, the Spanish authority affirmed its refusal to renew the permit and CDZ commenced and pursued further appeal processes thereafter.
47. Emerita's public filings did not adequately disclose, either at all or in a timely manner, the facts in the preceding paragraph. In addition, Emerita did not in any way disclose that the Plaza Norte Project permit was at risk or in jeopardy at any time between February 2020 and January 2023, and did not issue any corrective disclosure until May 2023. More particularly:
a. While Emerita did state in annual audited financial statements filed January 28, 2020 that: "The rights to the Plaza Norte Project expired on January 20, 2020. The Company has submitted a request for extension for an additional term of 3 years and is awaiting approval by the mining authorities", its annual MD&A filed the same day did not mention the permit expiry or renewal request but instead indicated that CDZ had received all permits;
b. Emerita's next interim financial statements and MD&A, filed February 28, 2020, and subsequent ones: (a) did not mention the permit expiry; and (b) did not state that the permit renewal had been denied, but instead indicated that CDZ had valid permits for the Plaza Norte Project. In addition, in interim and annual financial statements and MD&A filed between January 28, 2021 and March 1, 2022, Emerita stated that the rights to the Plaza Norte Project had been renewed by the Spanish authority in December 2020. There was no such renewal and, as above, in April 2021 the Spanish authority affirmed its refusal to renew the permit;
c. In interim MD&A filed between August 2022 and May 2023, Emerita continued to indicate that CDZ had the Plaza Norte Project permit. Emerita did not discuss the Plaza Norte Project in interim MD&A filed in May 2022, or in interim financial statements filed between May 2022 and May 2023. In its annual audited financial statements filed January 1, 2023, Emerita indicated, for the first time, that the permit for the Plaza Norte Project was under appeal, however this was misleadingly stated to be "as of September 30, 2022". As above, CDZ had been undertaking administrative and/or court appeals relating to the Plaza Norte Project permit since at least March 2020; and
d. Finally, in its interim MD&A filed May 30, 2023, Emerita indicated that CDZ applied for renewal of the Plaza Norte Project permit before the expiry of the initial permit and, for the first time, stated that such extension "was not granted before the relevant permits expired on January 21, 2020. CDZ launched an appeal against the decision to not grant the extension, which is still in process."
Untrue & Misleading Statement #3: Emerita's interest in joint venture
48. From May 4, 2020 until May 30, 2023, Emerita made statements in interim and annual MD&A and financial statements that Emerita (via Emerita Spain) had a 50% interest in CDZ. Such statements were untrue or misleading because:
a. Under the agreements with Aldesa, if any partner in CDZ failed to fund its activities, that partner's ownership was subject to dilution in favour of partners that did fund such activities;
b. On October 10, 2019, the Emerita board decided not to fund certain further exploration (drilling) by Aldesa. Minutes of the board meeting noted that failure to fund will result in dilution of Emerita's interest in CDZ; and
c. Aldesa funded further drilling activity on the Plaza Norte Project between January and March 2020, to which Emerita did not contribute funding, which would and did result in a dilution of Emerita's interest in CDZ.
49. Emerita's public filings did not adequately disclose, either at all or in a timely manner, the facts in the preceding paragraph. Emerita did not disclose that it had decided not to fund further activities of CDZ or that Emerita Spain's ownership of CDZ would be, and later had been, reduced below 50% at any time between May 2020 and May 2023. Emerita first indicated that it had less than a 50% interest in CDZ in interim MD&A filed on May 30, 2023, which stated that it "has current ownership of 39% in CDZ."
Individual Responsibility for Untrue & Misleading Statements
50. Gower, Duras, Merino-Marquez, and Lopez were involved in the preparation, certifying, or filing of Emerita's public filings that contained the untrue and misleading statements concerning the Plaza Norte Project. As directors or officers of Emerita who authorized, permitted or acquiesced in such conduct, they are liable pursuant to section 129.2 of the Act for Emerita's breaches of the Act.
51. The Commission alleges the following breaches of Ontario securities law and other reasons it would be in the public interest to grant the orders sought:
a. Gower, Guy, Diniz, Lopez, and Duras, directly or indirectly, engaged or participated in acts, practices, or courses of conduct relating to securities that they knew or reasonably ought to have known perpetrated a fraud on persons or companies, contrary to subsection 126.1(1)(b) of the Act;
b. Gower and Diniz made statements to the Commission and persons appointed to make an investigation under the Act that, in a material respect and at the time and in the light of the circumstances under which they were made, were misleading or untrue or did not state facts that were required to be stated or that were necessary to make the statements not misleading, contrary to subsection 122(1)(a) of the Act;
c. Emerita made statements in documents required to be filed or furnished under Ontario securities law that, in a material respect and at the time and in the light of the circumstances under which they were made, were misleading or untrue or did not state facts that were required to be stated or that were necessary to make the statements not misleading, contrary to subsection 122(1)(b) of the Act;
d. Gower, Duras, Merino-Marquez, and Lopez, as directors or officers of Emerita, each authorized, permitted or acquiesced in Emerita's breaches of subsection 122(1)(b) above and are thereby liable for such breaches pursuant to section 129.2 of the Act; and
e. Further, and in any event, the conduct of Gower, Guy, Diniz, Lopez, and Duras described above is contrary to the public interest. Their dishonest conduct is contrary to the high standards of business conduct expected of market participants, which is a fundamental animating purpose of securities regulation.
52. These allegations may be amended, and further and other allegations may be added as counsel may advise, and the Tribunal may permit.
The Commission requests that the Tribunal make the following order(s):
a. that trading in any securities or derivatives by or of the Respondents cease permanently or for such period as is specified by the Tribunal, pursuant to paragraph 2 of subsection 127(1) of the Act;
b. that the individual Respondents be prohibited from acquiring any securities permanently or for such period as is specified by the Tribunal, pursuant to paragraph 2.1 of subsection 127(1) of the Act;
c. that any exemptions contained in Ontario securities law do not apply to the Respondents permanently or for such period as is specified by the Tribunal, pursuant to paragraph 3 of subsection 127(1) of the Act;
d. that Emerita submit to a review of its practices and procedures and institute such changes as may be ordered by the Tribunal pursuant to paragraph 4 of subsection 127(1) of the Act;
e. that the individual Respondents be reprimanded, pursuant to paragraph 6 of subsection 127(1) of the Act;
f. that the individual Respondents resign one or more positions that they hold as a director or officer of any issuer or registrant pursuant to paragraphs 7, 8.1 and 8.3 of subsection 127(1) of the Act;
g. that the individual Respondents be prohibited from becoming or acting as a director or officer of any issuer or registrant, pursuant to paragraphs 8, 8.2 and 8.4 of subsection 127(1) of the Act;
h. that the registration or recognition of any individual Respondent be terminated, suspended or restricted, and that the Respondents be prohibited from becoming or acting as a registrant or promoter permanently or for such period as is specified by the Tribunal, pursuant to paragraphs 1 and 8.5 of subsection 127(1) of the Act;
i. that the Respondents each pay an administrative penalty of not more than $5 million for each failure to comply with Ontario securities law, pursuant to paragraph 9 of subsection 127(1) of the Act;
j. that the Respondents disgorge to the Commission any amounts obtained as a result of non-compliance with Ontario securities law, pursuant to paragraph 10 of subsection 127(1) of the Act;
k. that the Respondents pay costs of the Commission investigation and hearing, pursuant to section 127.1 of the Act; and
l. such other order as the Tribunal considers appropriate in the public interest.
April 9, 2026 |
ONTARIO SECURITIES COMMISSION |
20 Queen Street West, 22nd Floor |
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Toronto, ON M5H 3S8 |
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Erin Hoult |
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Senior Litigation Counsel |
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Enforcement Division |
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Tel.: 416-593-8290 |
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Email: ehoult@osc.ca |
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Sylvia Samuel |
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Senior Litigation Counsel |
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Enforcement Division |
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Tel.: 647-296-8574 |
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Email: ssamuel@osc.ca |
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{1} Including, without limitation, for not stating a fact that was required to be stated or that was necessary to make the statement not misleading.
{2} Emerita's public statements refer to the authorization(s) from the Spanish authorities to explore the Plaza Norte Project in a variety of ways including, without limitation, as having the rights, the concessions, the permit (or permits), the license (or licenses), etc. For simplicity and clarity, we generally use the word 'permit' to cover any and all such descriptors.
Ontario Securities Commission and Liquidnet Canada Inc. -- ss. 127(1), 127.1
FILE NO.: 2026-15
BETWEEN:
Subsection 127(1) and section 127.1 of the Securities Act, RSO 1990, c S.5
PROCEEDING TYPE: Public Settlement Hearing
HEARING DATE AND TIME: Wednesday, April 15, 2026 at 10:00 a.m.
LOCATION: By videoconference
PURPOSE
The purpose of this hearing is to consider whether it is in the public interest for the Capital Markets Tribunal to approve the Settlement Agreement dated April 8, 2026, between the Commission and Liquidnet Canada Inc. in respect of the application filed by the Commission dated April 10, 2026.
Any party to the proceeding may be represented by a representative at the hearing.
This Notice of Hearing is also available in French on request of a party. Participation may be in either French or English. Participants must notify the Tribunal in writing as soon as possible if the participant is requesting a proceeding be conducted wholly or partly in French.
L'avis d'audience est disponible en français sur demande d'une partie, que la participation à l'audience peut se faire en français ou en anglais et que les participants doivent aviser le Tribunal par écrit dès que possible si le participant demande qu'une instance soit tenue entièrement ou partiellement en français.
Dated at Toronto this 10th day of April, 2026
For more information
Please visit capitalmarketstribunal.ca or contact the Registrar at registrar@capitalmarketstribunal.ca.
BETWEEN:
(Subsection 127(1) and Section 127.1 of the Securities Act, RSO 1990, c S.5)
1. This case involves inadequate controls by a marketplace over the confidential trade and order information of marketplace participants.
2. Liquidnet Canada Inc. (LCI), a registered investment dealer, has operated fixed income and equities alternative trading systems (ATSs). In 2023, LCI discovered that certain order and trade information of participants in LCI's fixed income ATS was visible to certain employees of LCI's foreign affiliates, who were not authorized under Ontario law to view the information. The available evidence does not indicate whether such employees actually viewed this information or whether information was visible to third parties. The order and trade information visible to these employees did not include indications of interest submitted to LCI's fixed income ATS.
3. After self-identifying the problem, LCI voluntarily suspended trading in Canadian debt securities on its fixed income ATS, and delivered an incident report to the Ontario Securities Commission (the Commission). The report represented that the shutdown of its fixed income ATS was necessary for "system enhancements", but was not as forthcoming as it should have been about the underlying issue, namely that order and trade information was visible to certain employees of LCI's foreign affiliates.
4. It later came to light that the LCI Equities ATS infrastructure permitted access to participant order and trade information without consent in connection with orders placed on the LCI Equities ATS. Such access extended to employees of foreign affiliates of LCI who were not authorized to see it. The available evidence does not disclose whether such employees actually viewed this information or whether information was visible to third parties. The order and trade information visible to employees of LCI's US affiliate did not include indications of interest submitted to the LCI Equities ATS.
5. When marketplaces, including alternative trading systems, permit access to confidential participant order or trade information without consent, they undermine investor confidence and the fairness and efficiency of our markets. Marketplaces must have a robust compliance system in place to address all relevant risks, including those associated with operating a shared technology platform in multiple jurisdictions. Marketplaces must also provide the Commission with accurate information when suspending trading or responding to the Commission's inquiries.
The Commission makes the following allegations of fact:
6. LCI is a corporation incorporated under the laws of Canada. LCI is one of a family of companies that include Liquidnet, Inc., LCI's US-based affiliate (Liquidnet US), and Liquidnet Europe Limited, Liquidnet's UK-based affiliate.
7. LCI has been registered with the Commission as an investment dealer since 2004.
8. LCI operated an ATS where marketplace participants can submit indications of interest which can match with other indications of interest that can result in trading in fixed income products (the LCI Fixed Income ATS) until August 2023, when LCI suspended trading of Canadian debt securities on it, as described further below.
9. LCI has also operated an ATS where marketplace participants can submit indications of interest which can match with other indications of interest that can result in trading in equities products (the LCI Equities ATS). LCI continues to operate the LCI Equities ATS.
10. Certain order and trade information of Canadian marketplace participants on the LCI Fixed Income ATS and on the LCI Equities ATS has been visible to employees of certain LCI foreign affiliates. The available evidence does not disclose whether the employees of LCI's affiliates actually viewed or accessed this information or whether information was visible to third parties. The order and trade information visible to the employees of LCI's affiliates did not include indications of interest submitted to the LCI Fixed Income ATS or LCI Equities ATS.
11. Certain of these employees were not authorized under Ontario securities law to see this order and trade information. These employees were not authorized to see it because access by these employees to this order and trade information was not required in order for LCI to provide services to these marketplace participants, and the marketplace participants did not consent to have this order and trade information shared with these employees of certain of LCI's foreign affiliates.
12. By, at the latest, June 30, 2023, LCI became aware that its fixed income staff could potentially access certain order and trade information of clients of Liquidnet US, and that, vice versa, certain employees of LCI affiliates could also access order and trade information of LCI's marketplace participants on the LCI Fixed Income ATS. After self-identifying the issue, LCI suspended trading of Canadian debt securities on the LCI Fixed Income ATS on or about August 29, 2023 so that the issue could be remediated.
13. On August 30, 2023, LCI communicated the fact of the shutdown to the Commission, and provided an incident report (the Incident Report). The Incident Report indicated:
(a) that "Liquidnet is making system enhancements that impact the Marketplace which require us to suspend trading to complete the enhancements";
(b) that "there was no 'incident' causing the suspension. Rather, to update the system we need to briefly suspend trading in fixed income securities";
(c) that the suspension began "in connection with discussions of systems enhancements"; and
(d) that "Liquidnet regularly reviews it systems and determined an enhancement was warranted".
14. The Incident Report did not indicate that there was visibility of LCI's marketplace participants' trade and order information on the LCI Fixed Income ATS to employees of LCI foreign affiliates, nor that the visibility issue precipitated the perceived need for "system enhancements".
15. In September and October 2023, the Commission and LCI exchanged correspondence regarding the suspension of trading on the LCI Fixed Income ATS, including updates on the contemplated completion of the system enhancements and the resumption of trading. In the course of this correspondence, LCI's responses to the Commission were unclear in respect of the degree to which the systems used by LCI and its affiliates were segregated, and did not, at this time, advise that employees of LCI affiliates could access trade and order information of LCI's marketplace participants.
16. At a quarterly meeting with the Commission on November 1, 2023, and in subsequent correspondence with the Commission, LCI advised that the suspension of trading on the LCI Fixed Income ATS was related to the visibility issues described above.
17. LCI's communications to the Commission in Fall 2023 were not as forthright as they could have been, and LCI ought to have advised the Commission of the visibility issue earlier than it did.
18. By October 2024, LCI realized that there was also unauthorized visibility of marketplace participants' information on the LCI Equities ATS, which LCI promptly reported to the Commission.
19. Prior to 2023, LCI failed to implement reasonable safeguards and procedures to protect its marketplace participants' order and trade information. LCI has since increased safeguards and procedures.
20. Further, LCI's oversight procedures to ensure that the safeguards and procedures that it has now established to protect its marketplace participants' order and trade information are followed were inadequate.
21. LCI outsources some of its key services and systems to one or more affiliates, including the provision of its trading technology. LCI's outsourcing arrangements do not require those affiliates to implement reasonable safeguards to protect LCI's marketplace participants' order and trade information, nor do they require those affiliates to implement adequate oversight procedures.
22. The Commission alleges the following breaches of Ontario securities law:
a. LCI has released marketplace participants' order and trade information to certain employees of certain of LCI's foreign affiliates without consent, contrary to s. 5.10(1) of National Instrument 21-101 Marketplace Operation (NI 21-101);
b. LCI has carried on business without implementing reasonable safeguards and procedures to protect order or trade information, contrary to s. 5.10(2) of NI 21-101; and
c. LCI has carried on business without implementing adequate oversight procedures to ensure that the safeguards and procedures that it has established to protect order or trade information are followed, contrary to s. 5.10 (3) of NI 21-101.
23. The Commission requests that the Tribunal approve the settlement agreement between the Commission and LCI with respect to the matters herein and that the Tribunal make orders under s. 127(1) and s. 127.1 of the Securities Act, RSO 1990, c. S.5, as contemplated by the settlement agreement.
April 10, 2026 |
ONTARIO SECURITIES COMMISSION |
20 Queen Street West, 22nd Floor |
|
Toronto, ON M5H 3S8 |
|
Aaron Dantowitz |
|
Senior Litigation Counsel |
|
adantowitz@osc.gov.on.ca |
|
Tel: (416) 593-3678 |
|
Ontario Securities Commission et al. -- ss. 127(1), 127.1
FILE NO.: 2026-23
BETWEEN:
Subsection 127(1) and section 127.1 of the Securities Act, RSO 1990, c S.5
PROCEEDING TYPE: Public Settlement Hearing
HEARING DATE AND TIME: Friday, May 8, 2026 at 2:00 p.m.
LOCATION: By videoconference
PURPOSE
The purpose of this hearing is to consider whether it is in the public interest for the Capital Markets Tribunal to approve the Settlement Agreement dated April 10, 2026, between the Commission and Stan Bharti and the Settlement Agreement dated April 10, 2026, between the Commission and Neil Said in respect of the application filed by the Commission dated April 10, 2026.
Any party to the proceeding may be represented by a representative at the hearing.
This Notice of Hearing is also available in French on request of a party. Participation may be in either French or English. Participants must notify the Tribunal in writing as soon as possible if the participant is requesting a proceeding be conducted wholly or partly in French.
L'avis d'audience est disponible en français sur demande d'une partie, que la participation à l'audience peut se faire en français ou en anglais et que les participants doivent aviser le Tribunal par écrit dès que possible si le participant demande qu'une instance soit tenue entièrement ou partiellement en français.
Dated at Toronto this 13th day of April, 2026
For more information
Please visit capitalmarketstribunal.ca or contact the Registrar at registrar@capitalmarketstribunal.ca.
BETWEEN:
(Subsection 127(1) and section 127.1 of the Securities Act, RSO 1990 c S.5)
1. The respondents were officers and/or a director of Medivolve Inc. (Medivolve or the Company), an Ontario reporting issuer. On April 2, 2020, Medivolve publicly announced it was acquiring 40% of a company called Amino for US$2 million cash and 15 million common shares. However, the respondents arranged for 3 million of those 15 million Medivolve shares to be allocated to Bharti, and another 2.8 million of the 15 million shares to be allocated to Said. They did not ensure that Medivolve disclosed their receipt of shares or report the transaction as a related-party transaction in its financial disclosures made in April 2020, contrary to Ontario securities law.
2. Officers and directors of public companies have important gatekeeping roles in ensuring the public is provided with accurate information. The respondents are being held accountable for authorizing Medivolve's non-compliance with Ontario securities law.
The Commission makes the following allegations of fact:
3. Medivolve was incorporated under the laws of British Columbia in 2005.{1} At all material times, the Company's head office was in Toronto, and it was a publicly listed reporting issuer on the Canadian Securities Exchange (the CSE).{2} Medivolve's securities have been subject to a cease-trade order since September 2024 for its failure to file periodic disclosures.
4. Stan Bharti is an entrepreneur and businessman. He is the founder and executive chairman of Forbes & Manhattan Inc. (Forbes), an Ontario company. Bharti has decades of experience in Ontario's capital markets.
5. Neil Said is an Ontario lawyer. For more than a decade he has worked for clients, including clients of Forbes. Said provided legal and other services to Medivolve through his professional corporation.
6. Medivolve retained Forbes in 2011 to provide management, business and operational consulting services. Through this consulting arrangement, Medivolve gained access to a range of legal, financial and other professionals who work with Bharti, including Said.
7. At all material times, Bharti was directly involved in decision-making at Medivolve. Bharti was Medivolve's CEO from March 14, 2019 to March 30, 2020, and was a Medivolve director from March 14, 2019 to April 29, 2020.
8. Said provided legal and other services to Medivolve at all material times, and he replaced Bharti as Medivolve's CEO from March 30, 2020 to April 29, 2020. Said was also involved in reviewing Medivolve's financial disclosures with the Audit Committee before they were issued.
9. One of Bharti's contacts had co-founded a company called Exponential Genomics Inc. (Exponential). Exponential was researching or developing new medical technology that could, if realized, potentially speed-up the development of various therapeutics, including, COVID-19. Exponential was introduced to Medivolve as an investment opportunity.
10. On April 3, 2020, Medivolve issued a news release that it would acquire 40% of a new Exponential subsidiary, Amino Therapeutics Inc. (Amino), for US$2 million cash and 15 million Medivolve common shares. The release did not disclose that Bharti or Said would be receiving shares as part of the transaction.
11. The transaction closed on April 13, 2020. However, only 5 million of the 15 million Medivolve shares were issued to Amino's owners. The remaining 10 million were issued to Bharti, Said, and others. Bharti received 3 million Medivolve shares, valued at $915,000, through a holding company, and Said received 2.8 million Medivolve shares, valued at $854,000, from the transaction through an Ontario numbered company. Bharti was a Medivolve director when the transaction closed, and approved the transaction as a director, and Said was Medivolve's CEO.
12. Not all of Medivolve's directors were informed that Bharti or Said would receive Medivolve shares from the Amino transaction before the board approved it. Additionally, Medivolve described the Ontario numbered company as a "non-related person" in a Form 9 filed with the CSE seeking approval for the transaction.
13. Medivolve issued a news release on April 13, 2020 announcing that the Amino transaction had closed. The news release did not state that (i) Bharti or Said had received millions of Medivolve shares as part of the deal, or (ii) the deal was a related-party transaction.
14. Medivolve made its financial disclosures for the year ended December 31, 2019, including audited financial statements on April 24, 2020 and an amended MD&A on April 27, 2020. Medivolve did not disclose that Bharti or Said received shares from the Amino transaction or report the deal as a related-party transaction.
15. Accordingly, Medivolve's financial disclosures for the year ended December 31, 2019 contained material misstatements, contrary to s. 122(1)(b) of the Act.
The Commission alleges the following breaches of Ontario securities law and conduct contrary to the public interest:
16. Bharti and Said, as officers or directors of Medivolve, authorized Medivolve's non-compliance with Ontario securities law contrary to s. 129.2 of the Act, specifically, they authorized Medivolve's making of material misstatements in its financial disclosures for the year ended December 31, 2019, contrary to s. 122(1)(b) of the Act.
17. The Commission requests that the Tribunal make an order pursuant to s. 127(1) of the Act to approve the settlement agreements between the Commission and the respondents with respect to the matters set out herein.
DATED this 10th day of April, 2026.
ONTARIO SECURITIES COMMISSION |
|
20 Queen Street West, 22nd Floor |
|
Toronto, ON M5H 3S8 |
|
Adam Gotfried |
|
Senior Litigation Counsel |
|
Tel: 416-725-0916 |
|
Email: agotfried@osc.ca |
|
Susan Kimani |
|
Litigation Counsel |
|
Tel: 416-263-7717 |
|
Email: skimani@osc.ca |
|
{1} Medivolve continued under the laws of Canada in 2009. The Company has had multiple name changes and for much of the period at issue was named Questcap Inc. For ease of reference, the Company will be referred to as Medivolve throughout.
{2} The Company's securities were later traded on the NEO Exchange (now Cboe Canada).
Ontario Securities Commission and Bradley J. Moynes
FOR IMMEDIATE RELEASE
April 9, 2026
TORONTO -- The Tribunal issued an Order in the above-named matter.
A copy of the Application for Enforcement Proceeding dated March 31, 2026 and the Order dated April 9, 2026, are available at capitalmarketstribunal.ca.
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Ontario Securities Commission et al.
FOR IMMEDIATE RELEASE
April 9, 2026
TORONTO -- The Tribunal issued a Notice of Hearing on April 9, 2026 setting the matter down to be heard on May 8, 2026 at 10:00 a.m. or as soon thereafter as the hearing can be held in the above-named matter.
A copy of the Notice of Hearing dated April 9, 2026 and Application for Enforcement Proceeding dated April 9, 2026 are available at capitalmarketstribunal.ca.
Members of the public may observe the hearing by videoconference, by selecting the "View by Zoom" link on the Tribunal's hearing schedule, at capitalmarketstribunal.ca/en/hearing-schedule.
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Ontario Securities Commission et al.
FOR IMMEDIATE RELEASE
April 9, 2026
TORONTO -- The Tribunal issued an Order in the above-named matter.
A copy of the Application for Enforcement Proceeding dated March 27, 2026 and the Order dated April 9, 2026, are available at capitalmarketstribunal.ca.
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FOR IMMEDIATE RELEASE
April 10, 2026
TORONTO -- The Tribunal issued its Reasons for Decision in the above-named matter.
A copy of the Reasons for Decision dated April 9, 2026, is available at capitalmarketstribunal.ca.
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Ontario Securities Commission and Liquidnet Canada Inc.
FOR IMMEDIATE RELEASE
April 10, 2026
TORONTO -- The Tribunal issued a Notice of Hearing for a hearing to consider whether it is in the public interest to approve a settlement agreement entered into by the Commission and Liquidnet Canada Inc. in the above-named matter.
A copy of the Notice of Hearing dated April 10, 2026 and Application for Enforcement Proceeding dated April 10, 2026 are available at capitalmarketstribunal.ca.
Members of the public may observe the hearing by videoconference, by selecting the "View by Zoom" link on the Tribunal's hearing schedule, at capitalmarketstribunal.ca/en/hearing-schedule.
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Ontario Securities Commission and Colin Heatherington
FOR IMMEDIATE RELEASE
April 10, 2026
TORONTO -- The Tribunal issued an Order in the above-named matter.
A copy of the Application for Enforcement Proceeding dated March 31, 2026 and the Order dated April 10, 2026, are available at capitalmarketstribunal.ca.
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Ontario Securities Commission et al.
FOR IMMEDIATE RELEASE
April 10, 2026
TORONTO -- The Tribunal issued an Order in the above-named matter.
A copy of the Order dated April 10, 2026 is available at capitalmarketstribunal.ca.
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Ontario Securities Commission et al.
FOR IMMEDIATE RELEASE
April 13, 2026
TORONTO -- The Tribunal issued a Notice of Hearing for a hearing to consider whether it is in the public interest to approve the settlement agreements entered into between the Commission and the respondents, Stan Bharti and Neil Said in the above-named matter.
The hearing will be held on May 8, 2026 at 2:00 p.m. by videoconference.
Members of the public may observe the hearing by videoconference, by selecting the "View by Zoom" link on the Tribunal's hearing schedule, at capitalmarketstribunal.ca/en/hearing-schedule.
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Ontario Securities Commission et al.
FOR IMMEDIATE RELEASE
April 13, 2026
TORONTO -- The merits hearing in the above-named matter scheduled to be heard on April 14 and 15, 2026 will not proceed as scheduled.
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Ontario Securities Commission and Bradley J. Moynes -- ss. 127(1), 127(4.0.3)
BETWEEN:
File No. 2026-19
Adjudicator: |
Jane Waechter |
April 9, 2026
(Subsections 127(1) and 127(4.0.3) of the Securities Act, RSO 1990, c S.5)
WHEREAS the Capital Markets Tribunal held a hearing in writing to consider an application brought by the Ontario Securities Commission for an order imposing sanctions against the respondent, Bradley J. Moynes, without giving the respondent an opportunity to be heard, pursuant to subsections 127(1) and 127(4.0.3) of the Securities Act (the Act);
ON READING the materials filed by the Commission, the Final Judgement of the United States District Court for the District of Massachusetts dated March 8, 2023, and the United States Securities and Exchange Commission Complaint dated June 27, 2022;
IT IS ORDERED THAT:
1. pursuant to paragraphs 2 and 2.1 of subsection 127(1) of the Act, Moynes is permanently prohibited from trading in any securities or derivatives, or acquiring any securities, except that he may trade securities or derivatives, and acquire securities, in any Registered Retirement Savings Plan, Registered Education Savings Plan, Registered Retirement Income Fund, or Tax-Free Savings Account (as those terms as defined in the Income Tax Act, RSC, 1985, c 1 (5th Supp)), of which Moynes is the sole legal and beneficial owner, through a registered dealer, to whom he has given a copy of this order;
2. pursuant to paragraph 7 of subsection 127(1) of the Act, Moynes shall resign any positions that he holds as a director or officer of any reporting issuer; and
3. pursuant to paragraph 8 of subsection 127(1) of the Act, Moynes is prohibited permanently from becoming or acting as a director or officer of any reporting issuer.
BETWEEN:
(Subsections 127(1) and 127(4.0.3) of the Securities Act, RSO 1990, c S.5)
1. The Ontario Securities Commission requests an order in the public interest against Bradley J. Moynes, whom the SEC alleged is a Canadian citizen and a resident of British Columbia, based on a judgment of the District Court for the District of Massachusetts in the United States. The Commission requests that the Tribunal make the requested order without giving Moynes an opportunity to be heard, pursuant to subsection 127(4.0.3) of the Securities Act.
2. The District Court's judgment is based on the US Securities and Exchange Commission (the SEC)'s Complaint filed in June 2022 in the District Court (the Complaint). The Complaint alleged that Moynes and Digatrade Financial Corp. violated US federal securities law, and that Vancap Ventures Inc. acted as a repository for ill-gotten gains. The Complaint sets out that Moynes engaged in a fraudulent course of conduct described as a "pump and dump" scheme involving the publicly traded stocks (shares) of Digatrade and Formcap Corp.
3. According to the Complaint, investors could trade in Formcap and Digatrade stocks in over-the-counter markets based in the United States. Moynes allegedly conspired with others to conceal sales of Formcap and Digatrade stock that he, directly or indirectly, beneficially owned or controlled, and to promote trading in Digatrade stock and to manipulate Digatrade's stock price and trading volume. The fraudulent scheme generated over US $6 million at the expense of unsuspecting investors. Moynes and Digatrade received over US $1.5 million in illicit trading profits. Moynes transferred or caused the transfer of the bulk of his illicit trading profits (approximately US $1 million) to Vancap.
4. On March 8, 2023, Moynes and his corporate co-defendants consented to District Court judgments imposing sanctions on them. Those circumstances are sufficient to engage the Tribunal's public interest jurisdiction. The Tribunal may issue preventive and protective orders to protect investors, the fairness, efficiency and competitiveness of capital markets, and public confidence in capital markets.
5. Under subsection 127(4.0.3) of the Securities Act, the Tribunal has jurisdiction to make any of the public interest orders described in paragraphs 1 to 8.5 of subsection 127(1), where a person or company has agreed with a securities regulatory authority outside Canada to be subject to sanctions.
6. The protective and preventive order requested is necessary and in the public interest to restrain Moynes from engaging in potential future conduct that could prejudice Ontario investors and the capital markets.
7. The Complaint includes the following allegations:
(a) Moynes' Formcap fraud:
(i) Frederick L. Sharp and his employees (the Sharp Group), were from at least 2010 to 2019 in the business of facilitating illegal stock sales in the public securities markets;
(ii) In May 2013 the Sharp Group controlled 95% of Formcap's purportedly unrestricted shares;
(iii) In March 2014, Moynes became a Sharp Group client, and from June 2014 through June 2015, Moynes was the President and a director of Formcap;
(iv) After becoming a Sharp Group client, Moynes controlled approximately 19.5% of Formcap's total shares outstanding;
(v) From March 2014 through July 2014, Moynes directed the sale of approximately 9.9 million Formcap shares held by the Sharp Group's nominee companies;
(vi) While he was selling Formcap shares, Moynes issued press releases touting Formcap's business prospects, none of which disclosed that Moynes was selling, and would continue to sell, his shares of Formcap;
(vii) Between March 2014 and November 2014, Moynes dumped millions of Formcap shares via Sharp Group nominee companies into the market, generating trading proceeds of US $327,745, of which Moynes directly benefitted in the amount of approximately US $256,000;
(b) Moynes' Digatrade fraud:
(i) Moynes was, since December 2000, the President and a director of Digatrade, and also was Digatrade's Chief Executive Officer and Chief Financial Officer since 2016 and Chairman since 2017;
(ii) As of April 2014, Digatrade had approximately 52,417,000 outstanding shares, 95.8% of which Moynes personally controlled;
(iii) In May 2014, Moynes caused Digatrade to issue 28 million purportedly free-trading shares, which, according to public filings, were to settle old debts held by unrelated third parties;
(iv) In reality, six of the supposed unrelated third parties were Sharp Group nominee companies and Moynes secretly retained ownership and control of 21 million of the 28 million shares through those six nominee companies;
(v) Prior to selling his Digatrade shares, Moynes directed a Sharp Group trader to buy Digatrade stock on numerous occasions to support and inflate the price of the stock;
(vi) Moynes paid various stock promoters through the Sharp Group, thereby concealing his role in each of those promotions, to increase demand for Digatrade stock;
(vii) By mid-2016, the scheme entered its second phase in which Moynes, the Sharp Group employees, Luis Jimenez Carrillo, a recidivist penny stock schemer, and Carrillo's associates (collectively, the Digatrade Control Group) coordinated efforts to promote and direct trading in Digatrade stock;
(viii) In August 2016, Moynes caused Digatrade to issue 25,250,000 restricted shares, with 25 million of those shares going to Moynes;
(ix) On the same day, Moynes caused Digatrade to issue 8 million purportedly unrestricted shares in exchange for convertible debt;
(x) Over the next three months, Moynes transferred all but 50,000 of the 8 million newly-issued shares to Sharp Group nominee companies to be secretly held for the Digatrade Control Group;
(xi) By the end of 2016, the Digatrade Control Group controlled approximately 97% of all Digatrade shares deposited with brokers;
(xii) Starting November 1, 2016, Carrillo orchestrated a promotional campaign to promote Digatrade stock to investors by paying the operators of a "boiler room" operation based in Medellin, Colombia;
(xiii) At or about the same time as the promotional campaign, the Digatrade Control Group directed the sales of Digatrade stock;
(xiv) Before and during the time that Carrillo was promoting Digatrade stock, Moynes issued Digatrade press releases publicizing new business ventures;
(xv) The Digatrade Control Group's promotional campaign caused Digatrade's stock price to rise in November 2016, despite the Digatrade Control Group's heavy selling;
(xvi) In December 2016, the Financial Industry Regulatory Authority (FINRA), which oversees broker-dealers in the United States, questioned Moynes about the dramatic increase in Digatrade's stock price and trading volume and the contemporaneous press releases that he released as President of Digatrade;
(xvii) Moynes falsely told FINRA that he did not trade Digatrade stock and that he did not know anyone who was trading Digatrade stock;
(xviii) In January 2017, Moynes caused Digatrade to issue another 8 million purportedly free-trading shares to five Sharp Group nominee companies in exchange for purported debt and the Digatrade Control Group directed the sale of all of the shares to generate substantial profits;
(xix) This pattern was repeated several times through 2018;
(xx) Moynes was actively involved in generating the purportedly free-trading shares, including by signing board resolutions authorizing each of the debt conversions as a member of Digatrade's board of directors; signing debt settlement agreements as an authorized signatory on behalf of Digatrade; and signing at least one letter on behalf of Digatrade, in which Moynes falsely affirmed that a Sharp Group nominee company was "not an affiliate of [Digatrade]", which was necessary to obtain a legal opinion to have the shares issued without restricted legends;
(xxi) Moynes also signed and certified numerous SEC filings that contained misstatements about his ownership of Digatrade shares, including, for example, a December 31, 2014 Form 20-F discussing the company's May 2014 issuance of 28 million shares which falsely stated that the shares were issued to "arm's length parties who acquired the debts from creditors of the Company";
(xxii) From May 2015 to February 2018, Moynes (and later as part of the Digatrade Control Group) dumped millions of shares of Digatrade into the market generating approximately US $5.9 million in net proceeds, of which Moynes and Digatrade received approximately US $1.28 million in net illicit trading profits; and
(xxiii) Moynes directed US $980,400 in illicit trading profits to his BC corporation, Vancap, which he solely owned.
8. Moynes consented to a Final Judgment in the District Court, without admitting or denying the allegations in the Complaint (except as to jurisdiction and for the purposes of exceptions to discharge under US federal bankruptcy law); waived findings of fact and conclusions of law; and waived any right to appeal.
9. On March 8, 2023, the District Court imposed the following sanctions on Moynes:
(a) Moynes is permanently restrained and enjoined from violating, directly or indirectly, Section 10(b) of the US Securities Exchange Act of 1934 (the 1934 Act) and Rule 10b-5 promulgated thereunder, and Sections 5 and 17(a) of the US Securities Act of 1933 (the 1933 Act);
(b) Moynes is permanently barred from participating in an offering of penny stock, including engaging in activities with a broker, dealer, or issuer for purposes of issuing, trading, or inducing or attempting to induce the purchase or sale of any penny stock;
(c) pursuant to Section 21(d)(5) of the 1934 Act, Moynes is permanently restrained and enjoined from directly or indirectly, participating in the issuance, purchase, offer, or sale of any security; however, the injunction does not prevent him from purchasing or selling securities listed on a national securities exchange for his own personal account;
(d) pursuant to Section 21(d)(2) of the 1934 Act and/or Section 20(e) of the 1933 Act, Moynes is prohibited from acting as an officer or director of any issuer that has a class of securities registered pursuant to Section 12 of the 1934 Act or that is required to file reports pursuant to Section 15(d) of the 1934 Act; and
(e) disgorgement of US $1,296,275, including prejudgment interest (US $980,400 of which Moynes is jointly and severally liable with Vancap and $62,007 of which Moynes is jointly and severally liable with Digatrade); and
(f) a civil penalty of US $207,183.
10. Under subsection 127(4.0.3) of the Securities Act, where a person or company has agreed with a securities regulatory authority outside Canada to be subject to sanctions, the Tribunal has jurisdiction to make orders in the public interest under subsection 127(1) of the Securities Act, without providing the person or company who is subject to the sanctions an opportunity to be heard. The SEC is a securities regulatory authority outside Canada as defined in the Securities Act. Moynes agreed with the SEC to be subject to sanctions.
11. Subsection 127(4.0.4) of the Securities Act expressly allows the Tribunal to make an order under subsection 127(4.0.3) even if, as here, Moynes' agreement with the SEC to be subject to sanctions occurred before the day subsection 127(4.0.3) came into force.
12. A nexus to Ontario is not required for the Tribunal to exercise its jurisdiction under subsection 127(4.0.3). However, the conduct alleged in the Complaint, if connected to Ontario, would have constituted numerous breaches of Ontario securities law.
13. It is in the public interest to make the requested order. Moynes poses a risk to Ontario investors. The requested order is necessary to protect the public interest and safeguard the integrity of Ontario's capital markets.
14. The Commission requests that the Tribunal make the following order:
(a) pursuant to paragraphs 2 and 2.1 of subsection 127(1) of the Securities Act:
(i) Moynes is permanently prohibited from trading in any securities or derivatives, and is permanently prohibited from acquiring any securities, except in accordance with this order;
(ii) Moynes may trade in securities or derivatives, and may acquire securities, in any registered retirement savings plan, registered education savings plan, registered retirement income fund, or tax-free savings account (within the meaning of the Income Tax Act (Canada)), of which Moynes is the sole legal and beneficial owner, through a registered dealer, to whom he has given a copy of this order;
(b) pursuant to paragraph 7 of subsection 127(1) of the Securities Act, Moynes shall resign any positions that he holds as a director or officer of any reporting issuer;
(c) pursuant to paragraph 8 of subsection 127(1) of the Securities Act, Moynes is prohibited permanently from becoming or acting as a director or officer of any reporting issuer; and
(d) such other order or orders as the Tribunal considers appropriate.
March 31, 2026 |
ONTARIO SECURITIES COMMISSION |
20 Queen Street West, 22nd Floor |
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Toronto, ON M5H 3S8 |
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Sean Grouhi |
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Litigation Counsel |
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Enforcement Division |
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Tel: (416) 602-8473 |
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Email: sgrouhi@osc.ca |
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Ontario Securities Commission et al. -- ss. 127(1), 127(4.0.2)
BETWEEN:
File No. 2026-17
Adjudicator: |
Alan Stewart |
April 9, 2026
(Subsections 127(1) and 127(4.0.2) of the Securities Act, RSO 1990, c S.5)
WHEREAS the Capital Markets Tribunal held a hearing in writing to consider an application brought by the Ontario Securities Commission for an order imposing sanctions against the respondents Kilimanjaro Capital Ltd. now known as N1 Technologies Inc., Ashmit S. Patel and Zulfikar Hussein Rashid, without giving the respondents an opportunity to be heard, pursuant to subsections 127(1) and 127(4.0.2) of the Securities Act, RSO 1990, c S.5 (the Act);
ON READING the materials filed by the Commission, including the Merits Decision of the Alberta Securities Commission, dated February 2, 2021, and the Sanctions Decision of the Alberta Securities Commission, dated August 16, 2021;
IT IS ORDERED THAT:
1. against Ashmit S. Patel:
a. pursuant to paragraph 2 of subsection 127(1) of the Act, trading in any securities or derivatives by Patel shall cease permanently;
b. pursuant to paragraph 2.1 of subsection 127(1) of the Act, the acquisition of any securities by Patel shall cease permanently;
c. pursuant to paragraph 3 of subsection 127(1) of the Act, any exemptions contained in Ontario securities law do not apply to Patel permanently;
d. pursuant to paragraphs 7, 8.1 and 8.3 of subsection 127(1) of the Act, Patel shall resign any positions he holds as a director or officer of an issuer, registrant or an investment fund manager;
e. pursuant to paragraphs 8, 8.2 and 8.4 of subsection 127(1) of the Act, Patel is prohibited from becoming or acting as a director or officer of any issuer, registrant or investment fund manager permanently; and
f. pursuant to paragraph 8.5 of subsection 127(1) of the Act, Patel is prohibited from becoming or acting as a registrant, investment fund manager or promoter permanently;
2. as against Zulfikar Hussein Rashid:
a. pursuant to paragraph 2 of subsection 127(1) of the Act, trading in any securities or derivatives by Rashid shall cease until and including August 16, 2029;
b. pursuant to paragraph 2.1 of subsection 127(1) of the Act, the acquisition of any securities by Rashid shall cease until and including August 16, 2029;
c. pursuant to paragraph 3 of subsection 127(1) of the Act, any exemptions contained in Ontario securities law do not apply to Rashid until and including August 16, 2029;
d. pursuant to paragraphs 7, 8.1 and 8.3 of subsection 127(1) of the Act, Rashid shall resign any positions he holds as a director or officer of an issuer, registrant or an investment fund manager; and
e. pursuant to paragraphs 8, 8.2 and 8.4 of subsection 127(1) of the Act, Rashid is prohibited from becoming or acting as a director or officer of any issuer, registrant or investment fund manager until and including August 16, 2031, except that these orders do not preclude him from continuing to act as a director or officer of Rodeo Express Delivery Limited, provided that it is wholly owned by one or more of him and his immediate family members, does not issue or propose to issue securities to the public, and does not engage in any act, advertisement, solicitation, conduct or negotiation directly or indirectly in furtherance of a sale or disposition of a security to the public; and
3. as against Kilimanjaro Capital Ltd. now known as N1 Technologies Inc.:
a. pursuant to paragraph 2 of subsection 127(1) of the Act, trading in any securities or derivatives by or of Kilimanjaro cease permanently;
b. pursuant to paragraph 2.1 of subsection 127(1) of the Act, the acquisition of any securities by Kilimanjaro cease permanently; and
c. pursuant to paragraph 3 of subsection 127(1) of the Act, any exemptions contained in Ontario securities law do not apply to Kilimanjaro permanently.
BETWEEN:
(Subsections 127(1) and 127(4.0.2) of the Securities Act, RSO 1990, c S.5)
1. The Applicant, the Ontario Securities Commission (the Commission), requests that the Capital Markets Tribunal (the Tribunal) make an order in the public interest against the Respondents, reciprocating an order made by the Alberta Securities Commission (the ASC), without providing the Respondents an opportunity to be heard.
2. The ASC found that the Respondents, Kilimanjaro Capital Ltd. (now N1 Technologies Inc.) (Kilimanjaro), Ashmit S. Patel (Patel), and Zulfikar Hussein Rashid (Rashid) had breached Alberta securities laws by engaging in a market manipulation scheme designed to artificially inflate the price of Kilimanjaro's shares before the shares were sold onto the market.
3. The sanctions imposed by the ASC against the Respondents included prohibitions on trading or purchasing securities or derivatives, and removals of exemptions under Alberta securities laws. In addition, Patel and Rashid were prohibited from acting in various capacities, including as a director or officer of any issuer or as a registrant. The conduct sanctions in respect of Patel are permanent. Rashid is subject to a ban from acting as a director or officer of all companies except his family company until and including August 16, 2031. He is also subject to other conduct sanctions until and including August 16, 2029.
4. The Tribunal has jurisdiction to make an order in the public interest under ss. 127(1) and 127 (4.0.2) of the Securities Act, RSO 1990, c. S.5 (the Act), reciprocating an order made by a securities regulatory authority of another province that imposes sanctions, conditions, restrictions or requirements on a person or company.
5. The orders requested herein are in the public interest. They are necessary to restrain potential future misconduct by the Respondents that exposes Ontario investors to unacceptable risks and to deter others from engaging in market manipulation.
6. On March 23, 2020, the ASC completed a hearing on the merits (the Merits Hearing) of the allegations brought by the ASC. Aside from an adjournment application brought by Patel, the Respondents did not participate in the Merits Hearing, despite being properly served and given the opportunity to participate.
7. On February 2, 2021, the panel of ASC adjudicators (the ASC Panel) released its decision following the merits hearing (the Merits Decision).
8. In the Merits Decision, the ASC Panel held that the Respondents breached the following provisions of the Alberta Securities Act, RSA 2000, c S-4 (the Alberta Act):
(a) Kilimanjaro, Patel, and Rashid breached s. 93(a)(ii) of the Alberta Act by engaging in various acts that contributed to an artificial price for the Kilimanjaro shares;
(b) Patel breached s. 93(a)(i) of the Alberta Act when he contributed to a false or misleading appearance of trading activity in Kilimanjaro shares;
(c) Rashid contravened s. 221.1(2) of the Alberta Act by making untrue statements to ASC investigators while under oath in a compelled investigative interview; and
(d) Patel and Kilimanjaro breached s. 93.1 of the Alberta Act by violating an ASC cease-trade order (the CTO).
i. Kilimanjaro
9. On May 25, 2011, Kilimanjaro was incorporated as an international business company in Belize. At the time, the company was named Avatar Solutions Inc. Rashid was appointed director and was issued 50,000 shares.
10. On or around March 28, 2013, the company changed its name to Kilimanjaro and acquired an Alberta company, also named Kilimanjaro Capital Ltd. (Kilimanjaro Canada).
11. Kilimanjaro was a publicly traded company. From August 29, 2013 until June 11, 2014, Kilimanjaro's shares were listed on GXG Markets, a Danish-regulated microcap stock exchange. From around October 2013, Kilimanjaro's shares were also traded on the OTC Markets in the United States.
12. In 2013, Kilimanjaro was deemed a reporting issuer in Alberta pursuant to Multilateral Instrument 51-105 Issuers Quoted in the U.S. Over-The-Counter Markets. The determination was made due to the company's significant ties to Alberta -- including the company's Calgary address and the fact that Rashid, a control person of the company, was a resident of Alberta.
ii. Patel
13. Between approximately November 2012 through October 2014, Patel held himself out as legal counsel or chief operating officer of Kilimanjaro. At this time, Patel was a resident of the United States and was a licensed lawyer in the State of Illinois.
14. At the time of the Merits Decision Patel was a resident of Ontario.
iii. Rashid
15. Rashid was a director, chief executive officer, and control person of Kilimanjaro during the material times. Rashid claimed to have resigned as director, president and CEO of Kilimanjaro on either August 25 or September 8, 2024, but his signature appeared on corporate documents which were dated after these apparent resignation dates.
16. Rashid incorporated Kilimanjaro Canada, and was its director, CEO and shareholder.
17. Rashid is a resident of Calgary, Alberta.
i. Formation of Companies
18. In the fall of 2012, Patel and Rashid began working together to arrange for Kilimanjaro Canada to purchase future contingent gas, oil, and mineral rights in Africa (FCAs). The FCAs were contingent on the self-determination of various de facto African states, such as the Republic of Cabinda and Biafra.
19. Rashid provided Kilimanjaro Canada as the shell company, while Patel was responsible for taking the company public. Once this agreement was made, Kilimanjaro Canada then published news releases describing several FCA transactions with various entities. Rashid, Patel, and Levy then began raising capital.
20. On March 28, 2013, Kilimanjaro acquired all the outstanding shares of Kilimanjaro Canada. As such, Kilimanjaro Canada became a wholly owned subsidiary of Kilimanjaro.
21. In April 2013, Kilimanjaro's directors authorized audited financial statements for the year ended December 2011 and 2012 (the Audited Financial Statements).
22. The Audited Financial Statements included claims that a private placement had been conducted by Kilimanjaro Canada. The company claimed that in 2012, it had received US$8,116,000 in exchange for the issuance of 89,775,000 Kilimanjaro Canada Shares (the Kilimanjaro Canada Private Placement).
23. Kilimanjaro then applied for a listing on the GXG. The company's prospectus included the Audited Financial Statements and a valuation report. The valuation report had been prepared by a geologist who provided an expert evaluation of the FCAs held by Kilimanjaro Canada. He was retained by Patel, who held himself out as Kilimanjaro Canada's COO.
24. In August 2013, Kilimanjaro announced that it was listed on the GXG.
25. In October 2013, Kilimanjaro filed disclosure which confirmed that Kilimanjaro was trading on the OTC at this time, although it is unclear when the company began trading on the OTC.
26. On November 18, 2013, ASC staff contacted Rashid to inquire about Kilimanjaro's status as an Alberta reporting issuer, since Kilimanjaro had been trading on the OTC for a few weeks.
27. The next day, on November 19, 2013, Kilimanjaro Canada was dissolved, and Rashid was listed as the holder of corporate records post-dissolution. During an investigative interview with ASC staff, Rashid claimed that the timing was merely coincidental.
ii. Tout Campaign and News Releases
28. Between March 27, 2014, and August 20, 2014, various stock promotors disseminated 97 promotional touts for Kilimanjaro (the Tout Campaign). The Tout Campaign included emails with blatantly promotional and sometimes hyperbolic language.
29. During the same period as the Tout Campaign, Kilimanjaro issued a series of promotional news releases.
30. The news releases contained blatantly promotional language and discussed topics such as developments with Kilimanjaro's FCAs and announcements that Kilimanjaro was entering into a letter of intent with another company.
iii. Manipulative Trading
31. During the period that the Tout Campaign and news releases were being disseminated to artificially increase the Kilimanjaro share price, Patel engaged in manipulative trading of Kilimanjaro's shares. Specifically:
(a) From March 7 through to September 2, 2014, Patel sold all the Kilimanjaro shares in his brokerage account, with gross proceeds of approximately US$100,000;
(b) On May 12, 2014, Patel purchased 100,000 shares of Kilimanjaro at a total cost of US$868.50, with acquisition costs for the shares ranging from $0.007 to $0.0095 per share (Patel Share Purchase); and
(c) During this period, other than the Patel share Purchase, nearly all of Patel's trading activity involved sales of Kilimanjaro shares.
iv. Cease Trade Order
32. On April 3, 2014, the ASC issued the CTO on Kilimanjaro securities, pursuant to s. 33.1 of the Albera Act because Kilimanjaro had breached its obligations as a reporting issuer by failing to file its annual information form for the year ended December 31, 2013, contrary to s. 146 of the Alberta Act.
33. The next day, on April 4, 2014, Patel was informed via email of the CTO by Kilimanjaro's transfer agent.
34. Despite being informed of the CTO, Patel facilitated the transfer of Kilimanjaro shares from Canadian brokerages to American brokerages. In violation of the CTO, he began transferring large blocks of shares to brokerage accounts in the United States.
i. Patel's Liability
Market Manipulation
35. The Merits Decision includes the following factual findings about Patel's control over Kilimanjaro, which he exercised to artificially boost the company's share price:
(a) Patel held himself out as Chief Operating Officer of Kilimanjaro and was responsible for making nearly all the important decisions for Kilimanjaro during the material time. He was the guiding mind of Kilimanjaro.
(b) Among other duties, Patel was responsible for overseeing the drafting and dissemination of the company's news releases. Kilimanjaro's news releases provided misleading information to the market about its projects, the value of its assets, and management's perspective on the company's business.
(c) Patel worked with different promoters to coordinate the publication of Kilimanjaro news releases with the dissemination of touts to stimulate demand for Kilimanjaro's shares and artificially increase the company's share price.
(d) Once news releases and the Tout Campaign artificially boosted Kilimanjaro's share price, Patel profited by selling his Kilimanjaro shares into an unsuspecting market.
36. As a result of these actions, the ASC Panel determined that Patel had breached s. 93(a)(ii) of the Alberta Act.
Breach of Cease Trade Order
37. On April 3, 2014, the ASC issued the CTO.
38. On April 4, 2014, Kilimanjaro's transfer agent emailed Patel a copy of the CTO to Patel.
39. The ASC Panel found that Patel knew about the CTO by April 4, 2014.
40. Despite having knowledge of the CTO, Patel acted in furtherance of a trade in contravention of the CTO by taking the following actions:
(a) Directing the incorporation of a holding company;
(b) Obtaining a compensation agreement and corporate documents (including resolutions) to remove resale restrictions on shares;
(c) Assisting Zang in opening a brokerage account for the holding company in the United States;
(d) Instructing Kilimanjaro's transfer agent to transfer shares from Canadian brokerage accounts to holding company's brokerage account in the United States; and
(e) Obtaining trading authority over the holding company's and Zang's brokerage account.
41. Accordingly, the ASC Panel found that Patel breached s. 93.1 of the Alberta Act.
ii. Kilimanjaro's Liability
42. As Kilimanjaro's guiding mind, Patel's conduct and knowledge are attributable to Kilimanjaro:
(a) Kilimanjaro issued several misleading news releases as part of the coordinated promotional campaign. This was done under the direction of Patel.
(b) Some of Patel's actions in contravention of the CTO were on behalf of Kilimanjaro, including the directions he gave to the transfer agent and the resolution authorizing the agreement which led to a transfer of shares.
43. Accordingly, the ASC Panel found that Kilimanjaro breached s. 93(a)(ii) and s. 93.1 of the Alberta Act.
iii. Rashid's Liability
44. Rashid's conduct contributed to an artificial price for Kilimanjaro shares, Rashid's actions helped create the impression that Kilimanjaro was a legitimate business and lent an air of legitimacy to a company that was essentially a shell.
45. Rashid allowed Kilimanjaro to publish news releases with misleading statements which were attributed to him.
46. Rashid enabled Kilimanjaro by paying for the company's expenses, including payment for some news releases drafted by Patel.
47. Rashid's conduct allowed Patel to sell large amounts of Kilimanjaro shares by:
(a) providing Patel with unchecked control over Kilimanjaro's share capital, which Patel used to direct the forward-share split and instruct the company's transfer agent to issue and transfer shares to brokerage accounts controlled by Patel; and
(b) allowing Patel to use his electronic signature on documents that were integral to Patel's market manipulation scheme, including a compensation agreement and numerous resolutions which removed resale restrictions from shares controlled by Patel.
48. Rashid allowed himself to be appointed president and CEO of Kilimanjaro and could not avoid the responsibilities associated with those positions by allowing Patel to have unsupervised authority over all of Kilimanjaro's affairs.
49. While Rashid claimed not to have knowledge of Patel's actual plans, the ASC Panel determined that Rashid knew or ought to have known that his conduct would create an artificial price for Kilimanjaro shares.
50. For the above-listed reasons, the ASC Panel found that Rashid had contravened s. 93(a)(ii) of the Alberta Act.
51. On August 16, 2021, the ASC Panel issued its sanctions decision (the Sanctions Decision) ordering the following sanctions against the Respondents:
(a) Patel was subject to permanent market participation and director and officer bans and ordered to pay $117,400 in disgorgement, a $450,000 administrative penalty and $120,000 in costs;
(b) Rashid was subject to temporary market participation and director and officer bans and ordered to pay a $75,000 administrative penalty and $30,000 in costs.
(c) Kilimanjaro was subject to permanent market participation bans.
52. Pursuant to paragraph 2 of subsection 127(4.0.2) of the Securities Act, RSO 1990, c S.5 (the Act), the Tribunal may make any of the orders described in paragraphs 1 to 8.5 of subsection 127(1) of the Act against the Respondents, without giving the Respondent an opportunity to be heard, where the Respondent is subject to an order made by a securities regulatory authority of another province of territory in Canada, imposing sanctions, conditions, restrictions or requirements.
53. The ASC, which is a "securities regulatory authority of another province or territory in Canada", as defined in subsection 127(10) of the Act, issued an order imposing sanctions against the Respondents within the meaning of s. 127(4.0.2).
54. Section 127(4.0.4) of the Act expressly allows the Tribunal to make an order under s. 127(4.0.2) even though the ASC Decision predates the coming into force of s. 127(4.0.2).
55. It is in the public interest to make the requested orders. The Respondents pose a risk to Ontario investors. The requested order is necessary to protect the investing public and safeguard the integrity of Ontario's capital markets.
56. The Commission requests that the Tribunal make the following orders, pursuant to s. 127(1) and paragraph 2 of s. 127(4.0.2) of the Act:
a) against Patel:
i. pursuant to paragraph 2 of subsection 127(1) of the Act, trading in any securities or derivatives by Patel cease permanently;
ii. pursuant to paragraph 2.1 of subsection 127(1) of the Act, the acquisition of any securities by Patel cease permanently;
iii. pursuant to paragraph 3 of subsection 127(1) of the Act, any exemptions contained in Ontario securities law do not apply to Patel permanently;
iv. pursuant to paragraphs 7, 8.1 and 8.3 of subsection 127(1) of the Act, Patel resign any positions he holds as a director or officer of an issuer, registrant or an investment fund manager;
v. pursuant to paragraph 8, 8.2 and 8.4 of subsection 127(1) of the Act, Patel is prohibited from becoming or acting as a director or officer of any issuer, registrant or investment fund manager permanently;
vi. pursuant to paragraph 8.5 of subsection 127(1) of the Act, Patel is prohibited from becoming or acting as a registrant, investment fund manager or promoter permanently; and
vii. such other order or orders as the Tribunal considers appropriate.
b) against Rashid:
i. pursuant to paragraph 2 of subsection 127(1) of the Act, trading in any securities or derivatives by Rashid cease until and including August 16, 2029;
ii. pursuant to paragraph 2.1 of subsection 127(1) of the Act, the acquisition of any securities by Rashid cease until and including August 16, 2029;
iii. pursuant to paragraph 3 of subsection 127(1) of the Act, any exemptions contained in Ontario securities law do not apply to Rashid until and including August 16, 2029;
iv. pursuant to paragraphs 7, 8.1 and 8.3 of subsection 127(1) of the Act, Rashid resign any positions he holds as a director or officer of an issuer, registrant or an investment fund manager;
v. pursuant to paragraphs 8, 8.2 and 8.4 of subsection 127(1) of the Act, Rashid is prohibited from becoming or acting as a director or officer of any issuer, registrant or investment fund manager until and including August 16, 2031, except that these orders to not preclude him from continuing to act as a director or officer (or both) of Rodeo Express Delivery Limited, provided that it is wholly owned by one or more of him and his immediate family members, does not issue or propose to issue securities to the public, and does not engage in any act, advertisement, solicitation, conduct or negotiation directly or indirectly in furtherance of a sale or disposition of a security to the public; and
vi. such other order or orders as the Tribunal considers appropriate.
c) against Kilimanjaro:
i. pursuant to paragraph 2 of subsection 127(1) of the Act, trading in any securities or derivatives by Kilimanjaro cease permanently;
ii. pursuant to paragraph 2.1 of subsection 127(1) of the Act, the acquisition of any securities by Kilimanjaro cease permanently;
iii. pursuant to paragraph 3 of subsection 127(1) of the Act, any exemptions contained in Ontario securities law do not apply to Kilimanjaro permanently; and
iv. such other order or orders as the Tribunal considers appropriate.
March 27, 2026 |
ONTARIO SECURITIES COMMISSION |
20 Queen Street West, 22nd Floor |
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Toronto, ON M5H 3S8 |
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Emma Coffin |
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Litigation Counsel |
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Enforcement Division |
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LSO# 91018N |
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Tel: (416) 593-2374 |
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Email: ecoffin@osc.ca |
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Ontario Securities Commission and Colin Heatherington -- ss. 127(1), 127(4.0.1)
BETWEEN:
File No. 2026-21
Adjudicator: |
Geoffrey D. Creighton |
April 10, 2026
(Subsections 127(1) and 127(4.0.1) of the Securities Act, RSO 1990, c S.5)
WHEREAS the Capital Markets Tribunal held a hearing in writing to consider an application brought by the Ontario Securities Commission for an order, pursuant to subsections 127(1) and 127(4.0.1) of the Securities Act, RSO 1990, c S.5 (the Act), imposing sanctions against the respondent, Colin Heatherington, without giving him an opportunity to be heard;
ON READING the materials filed by the Commission, including the Plea Agreement and the Statement of Agreed Facts in Support of the Plea Agreement, both dated January 5, 2024, and the Judgment and Probation/Commitment Order of the United States District Court of the Central District of California dated July 3, 2024;
IT IS ORDERED THAT:
1. pursuant to paragraph 2 of subsection 127(1) of the Act, trading in any securities or derivatives by Heatherington shall cease permanently, except that this Order does not preclude Heatherington from trading in securities or derivatives in a registered retirement savings plan, registered education savings plan, any registered retirement income funds, and/or tax-free savings account (as defined in the Income Tax Act (Canada)) of which he is the sole legal and beneficial owner, through a registered dealer, to whom he has given a copy of this Order;
2. pursuant to paragraph 2.1 of subsection 127(1) of the Act, Heatherington is permanently prohibited from acquiring any securities, except that this Order does not preclude Heatherington from acquiring securities or derivatives in a registered retirement savings plan, registered education savings plan, any registered retirement income funds, and/or tax-free savings account (as defined in the Income Tax Act (Canada)) of which he is the sole legal and beneficial owner, through a registered dealer, to whom he has given a copy of this Order;
3. pursuant to paragraph 3 of subsection 127(1) of the Act, any exemptions contained in Ontario securities law do not apply to Heatherington permanently;
4. pursuant to paragraphs 7, 8.1, and 8.3 of subsection 127(1) of the Act, Heatherington shall resign any position that he holds as a director or officer of any issuer or registrant;
5. pursuant to paragraphs 8, 8.2, and 8.4 of subsection 127(1) of the Act, Heatherington is permanently prohibited from becoming or acting as a director or officer of any issuer or registrant; and
6. pursuant to paragraph 8.5 of subsection 127(1) of the Act, Heatherington is permanently prohibited from becoming or acting as a registrant or a promoter.
BETWEEN:
(Subsections 127(1) and 127(4.0.1) of the Securities Act, RSO 1990, c S.5)
1. The Applicant, the Ontario Securities Commission (the Commission), requests that the Capital Markets Tribunal (the Tribunal) make an order in the public interest against the Respondent, Colin Heatherington (Heatherington), reciprocating an order of the United States District Court of the Central District of California (the District Court). This order is sought without providing the Respondent an opportunity to be heard pursuant to s. 127(4.0.1) of the Ontario Securities Act, RSO 1990, c S.5 (the Act).
2. In 2024, Heatherington pleaded guilty to and was criminally convicted of conspiracy to commit securities fraud and wire fraud in violation of Title 18 of the United States Code §§ 1349, 1343 and 1348. Heatherington's conviction was based on admissions that, from 2004 through June 2008, he and his co-conspirators engaged in a scheme to defraud the securities markets and investors in eight hedge funds based in Mallorca, Spain.
3. Following his conviction, Heatherington was sentenced by the District Court to 42 months in custody, a 2-year supervised release upon release from imprisonment, and restitution in the total amount of USD $215,851,031, jointly and severally with one of his co-conspirators.
4. The Tribunal has jurisdiction to make orders in the public intrest on an ex parte basis under ss. 127(1) and parargraph 3 of 127(4.0.1) of the Act where, as here, a person or company has been convicted of an offence arising from a transaction, business, or course of conduct related to securities or derivatives.
5. The order sought is in the public interest. It is necessary to restrain potential future misconduct by the Respondent that exposes Ontario investors to unacceptable risks and to deter others from engaging in securities misconduct, including market manipulation.
6. On October 8, 2013, the United States Attorney's Office for the Central District of California (the USAO) filed a Criminal Complaint in the District Court against Heatherington, alleging that he conspired to and did commit securities and wire fraud in violation of Title 18 of the United States Code (18 USC) §§ 1349, 1343 and 1348. An Amended Criminal Complaint was filed on January 27, 2014, which detailed the 12 counts constituting the alleged offenses.
7. Pursuant to a First Superseding Indictment dated December 2, 2015, Heatherington was charged as follows:
(a) Count 1: in violation of 18 USC § 1349, conspiracy to commit securities and wire fraud contrary to 18 USC §§ 1348 and 1343, respectively (the Conspiracy Charge);
(b) Counts 2 to 9: in violation of 18 USC §§ 1348, 2, securities fraud in connection with the securities of 8 different issuers;
(c) Count 30: in violation of 18 USC § 1956(h), money laundering conspiracy; and
(d) Counts 31 to 33: in violation of 18 USC §§ 1957, 2(b), unlawful monetrary transactions.
8. On January 5, 2024, Heatherington entered into a plea agreement with the USAO (the Plea Agreement), wherein he agreed to plead guilty to the Conspiracy Charge. As part of the Plea Agreement, Heatherington admitted to facts contained in a Statement of Facts in Support of Plea Agreement (the Statement of Facts), which was subsequently read into the court record.
9. Heatherington pleaded guilty to and was convicted of the Conspiracy Charge on February 1, 2024.
10. On July 2, 2024, the Honourable Justice John A. Kronstadt of the District Court sentenced Heatherington as follows:
(a) 42 months in custody;
(b) Upon release from imprisonment, a 2-year supervised release with certain terms and conditions;
(c) Restitution in the amount of USD $215,851,031, jointly and severally with co-conspirator Todd Michael Ficeto; and
(d) Special assessment of USD $100.
11. The remaining counts were dismissed.
12. The Commission relies on the following admissions in the Statement of Facts:
Scheme to Defraud
(a) In or around 2004 to June 2008, Heatherington, together with co-conspirators Florian Homm (Homm), Todd Ficeto (Ficeto) and Heatherington's brother, Craig Heatherington, engaged in a scheme to defraud the securities markets and investors in various hedge funds (the Absolute Funds or the Funds), based in Mallorca, Spain.
(b) Homm was the founder and Chief Investment Officer of Absolute Capital Management Holdings (ACMH), a hedge fund management company. Homm managed the Absolute Funds from Mallorca, Spain, through ACMH, which ultimately was registered on the Alternative Investment Market of the London Stock Exchange.
(c) The Absolute Funds comprised the following eight hedge funds: Absolute East West Fund Master Fund Limited, Absolute Activist Value Master Fund Limited, Absolute Large Cap Master Fund Limited, Absolute Germany Fund Limited, Absolute India Fund Limited, the Return Europe Fund, the Catalyst Fund, and the Octane Fund.
(d) As Chief Investment Officer of the Funds, Homm had primary control over all investment decisions. Heatherington was a securities trader at ACMH and worked closely with Homm from ACMH's offices in Mallorca. As a trader, Heatherington had authority to execute trades on behalf of the Absolute Funds in the United States-based securities markets. ACMH charged each fund a monthly management and performance fee, based on the fund's net asset value (NAV). The NAV was a critical indicator of the Funds' performance and profitability and dictated the management and performance fees that were generated by the Funds, and thus payable to the Funds' principals, including Homm.
(e) With the assistance of Ficeto and other co-conspirators, Heatherington caused the Absolute Funds to purchase billions of shares in United States-based penny stocks and then caused those penny stocks to be used to manipulate the NAV of the Absolute Funds through manipulative stock trading activity.
The Stock Manipulation Conspiracy
(f) Homm, Ficeto and Heatherington used the Absolute Funds to acquire shares in the penny stock companies through various investment and financial deals. After acquiring the penny stock companies' shares, Heatherington and his co-conspirators engaged in manipulative trading practices to inflate the value of those shares, which in turn artificially increased the NAVs of the Absolute Funds and, consequently, the performance and management fees paid by the funds, resulting in massive profits to Homm and ACMH's principals at the ultimate expense of the Absolute Funds and the Funds' investors. When the scheme unraveled, the stock prices of the penny stock companies plunged and the Absolute Funds lost millions of dollars;
(g) In furtherance of the scheme, Heatherington caused millions of shares to be issued to CIC Global Capital Limited (CIC Global), a company beneficially owned by Heatherington and his brother, Craig, who Heatherington recruited to work at ACMH. At Homm's direction, Heatherington then directed trades involving the penny stock shares to be made in the United States securities markets through Hunter World Markets, a broker-dealer in Beverly Hills, California that was co-owned by Homm and Ficeto, at prices that Heatherington and his co-conspirators would dictate and illegally control. During the relevant period, Heatherington and his co-conspirators overwhelmingly controlled the trading activity in many of the penny stocks.
The Manipulative Trading Activity
(h) The penny stock trades that Heatherington conducted on behalf of the Absolute Funds often took the form of manipulative "cross trades" (the sale of stock from one Absolute Fund to another) and other manipulative trading techniques, such as "marking the close" (a practice that is prohibited when it involves artificially setting closing prices), backdated trades, and cancelled trades. These manipulative trades were used to fraudulently inflate the stock prices of the penny stock companies, which in turn artificially inflated the NAV of the Absolute Funds -- a prohibited practice known as "portfolio pumping." The co-conspirators generally engaged in portfolio pumping at the end of the month, in order to increase the value of the penny stock companies and therefore increase the Absolute Funds' NAV, which enabled Homm to falsely advertise higher returns, reap higher fees, and attract --and defraud -- new and unsuspecting victim-investors.
(i) Heatherington sent trade orders for the penny stocks to Hunter World Markets by telephone, email, and by an instant message (IM) system. At the direction of Heatherington and Ficeto, Hunter World Markets used a Microsoft Windows IM system (the secret IM system) to discuss the penny stock trades. Heatherington and Ficeto implemented the secret IM system because it was not automatically archived. Use of the secret IM system enabled the co-conspirators to hide conversations about manipulative trades in the penny stocks from regulators and Hunter World Markets' own compliance officer;
Self-Dealing Trades
(j) Heatherington, Homm, and Ficeto also made millions of dollars through self-dealing trades by selling their own shares of the artificially inflated penny stocks to the Absolute Funds. Through the manipulative trading activity outlined above, the co-conspirators would move the price of the penny stocks so they could trade their own shares at a profit. During this same period, Heatherington and his brother used CIC Global to manage investments for their own benefit and to engage in self-dealing, in a manner contrary to ACMH's explicit policy. They then hid their self-dealing via CIC Global from certain individuals at ACMH. Heatherington and Craig opened a brokerage account at Hunter World Markets for CIC Global to receive shares of the penny stock companies through placement agreements from Ficeto, to sell shares at inflated prices to the Absolute Funds, and to receive the proceeds of such self-dealing trades.
(k) As a result of the fraudulent scheme, Heatherington and his co-conspirators caused actual losses of approximately $215,851,031.
13. Pursuant to paragraph 3 of s. 127(4.0.1) of the Act, if a person or company has been convicted in any jurisdiction of an offence arising from a transaction, business, or course of conduct related to securities or derivatives, the Tribunal may make any of the orders described in paragraphs 1 to 8.5 pf s. 127(1) of the Act against a respondent without giving the respondent an opportunity to be heard.
14. Heatherington has been convicted in the United States of America of a criminal offence arising from a transaction, business, or course of conduct related to securities.
15. Heatherington is a Canadian citizen. He has resided in British Columbia, Canada throughout various periods of his life, including as recently as February 2008 to August 2021.
16. Subsection 127(4.0.4) allows the Tribunal to make an order under s. 127(4.0.1) even if the circumstances arose before s. 127(4.0.1) came into force.
17. It is in the public interest to make the requested orders against the Respondent to protect investors and safeguard the integrity of Ontario's capital markets.
18. The Commission requests that the Tribunal make the following order against Heatherington:
(a) pursuant to paragraph 2 of subsection 127(1) of the Act, trading in any securities or derivatives by Heatherington shall cease permanently, except that this order does not preclude Heatherington from trading in securities or derivatives in a registered retirement savings plan, registered education savings plan, any registered retirement income funds, and/or tax-free savings account (as defined in the Income Tax Act (Canada)) in which he has a beneficial ownership, provided that he carries out any permitted trading through a registered dealer, which dealer must be given a copy of this Order;
(b) pursuant to paragraph 2.1 of subsection 127(1) of the Act, Heatherington be permanently prohibited from acquiring any securities, except that this order does not preclude Heatherington from acquiring securities or derivatives in a registered retirement savings plan, registered education savings plan, any registered retirement income funds, and/or tax-free savings account (as defined in the Income Tax Act (Canada)) in which he has a beneficial ownership, provided that he carries out any permitted acquisitions through a registered dealer, which dealer must be given a copy of this Order;
(c) pursuant to paragraph 3 of subsection 127(1) of the Act, any exemptions contained in Ontario securities law do not apply to Heatherington permanently;
(d) pursuant to paragraphs 7, 8.1, and 8.3 of subsection 127(1) of the Act, Heatherington shall resign any position that he holds as a director or officer of any issuer or registrant;
(e) pursuant to paragraphs 8, 8.2, and 8.4 of subsection 127(1) of the Act, Heatherington is permanently prohibited from becoming or acting as a director or officer of any issuer or registrant;
(f) pursuant to paragraph 8.5 of subsection 127(1) of the Act, Heatherington is permanently prohibited from becoming or acting as a registrant or a promoter; and
(g) such other order or orders as the Tribunal considers appropriate.
March 31, 2026 |
ONTARIO SECURITIES COMMISSION |
20 Queen Street West, 22nd Floor |
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Toronto, ON |
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M5H 3S8 |
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Leo Ghiran |
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Litigation Counsel |
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Enforcement Division |
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LSO# 92713U |
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Email: LGhiran@osc.ca |
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Ontario Securities Commission et al.
BETWEEN:
File No. 2025-18
Adjudicator: |
Andrea Burke |
April 10, 2026
WHEREAS on April 10, 2026, the Capital Markets Tribunal held a hearing by videoconference with respect to a motion brought by the Ontario Securities Commission requesting an order recusing Adjudicator Burke from the merits panel in this proceeding;
ON READING the materials filed by the Ontario Securities Commission, Som Seif and Purpose Investments Inc., and on hearing the submissions of the representatives for each of the Ontario Securities Commission, Som Seif and Purpose Investments Inc.;
IT IS ORDERED, for reasons to follow, that the motion is granted.
Citation: Internet Sciences Inc v CNSX Markets Inc, 2026 ONCMT 18
Date: 2026-04-09
File No. 2025-29
BETWEEN:
Adjudicator: |
Andrea Burke |
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Hearing: |
By videoconference, January 9, 2026 |
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Appearances: |
Andrew McCoomb |
For CNSX Markets Inc. |
Sandy Lockhart |
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Aliyyah Jafri |
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Kirsten Thoreson |
For the Ontario Securities Commission |
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No one appearing for Internet Sciences Inc. |
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[1] At a case management hearing on January 9, 2026, that the Applicant, Internet Sciences Inc., refused to attend, I issued an order dismissing its Application{1} because of its refusal to participate in the proceeding unless its improper demands and pre-conditions for its participation were met. Before doing so, I also dismissed its motion objecting to the Ontario Securities Commission's status as a party to the Application. I also considered Internet Sciences' repeated written allegations and complaints that I am biased and determined that they were without factual basis and did not require my disqualification or recusal.
[2] These are my reasons for my decisions.
[3] This proceeding is an Application to review the decision of a Panel of the Board of Directors of CNSX Markets Inc., upholding a decision of the Canadian Securities Exchange (CSE) Listings Manager denying Internet Sciences' application for listing. In this proceeding, the terms CNSX and CSE have sometimes been used interchangeably.
[4] Following an initial case management hearing, I issued an order dated November 27, 2025,{2} with reasons to follow, that set a schedule for various motions brought by Internet Sciences, as well as the hearing of the merits of the Application. I issued the related Reasons for Decision on December 1, 2025{3}.
[5] Subsequently, Internet Sciences brought a motion seeking to vary the December 1 Reasons. It also filed a series of motions seeking my removal from any further involvement in the proceeding on grounds of bias. On December 12, 2025, I issued an order{4} with reasons to follow, dismissing these motions.
[6] The Registrar of the Tribunal circulated my December 12 Order to the parties by email. The same email advised the parties of the need to schedule a case management hearing as soon as possible and asked the parties to provide their availability by no later than December 15. The case management hearing was required to address a number of matters, including setting a schedule for an additional motion filed by Internet Sciences and re-scheduling filing deadlines for three other Internet Sciences motions because Internet Sciences had missed a December 10 deadline for delivering its written submissions.
[7] Internet Sciences never advised as to its availability for a case management hearing. Instead, Internet Sciences repeatedly communicated in emails sent to the Registrar and the parties that:
a. I should be disqualified for bias (based on an allegation not previously raised in the bias motions that I dismissed on December 12, and based on an allegation that it had previously raised in those motions);
b. my December 12 Order was unlawful; and
c. it would not participate in any attendances or hearings in this proceeding in which I was involved, including any case management hearing, unless its demands and pre-conditions were met.
[8] On December 16, 2025, the Registrar wrote to the parties and advised that because Internet Sciences had not provided its availability as requested, the case management hearing would be held on January 9, 2026, a date previously reserved for the hearing of three of Internet Sciences' motions.
[9] The emails sent between the parties and the Registrar between December 12, 2025, and the January 9 case management hearing were marked as exhibits during the January 9 case management hearing.
[10] The first issue I dealt with at the January 9 case management hearing was whether I could proceed in the absence of Internet Sciences.
[11] I determined that I could proceed.
[12] Subsection 7(1) of the Statutory Powers Procedure Act (SPPA){5} provides that where notice of an oral hearing has been given to a party and the party does not attend, a tribunal may proceed in the absence of the party.
[13] At the first case management hearing on November 25, 2025, Internet Sciences confirmed that it was available for a hearing on January 9, 2026. The January 9 hearing date was set in my November 27 Order. The Registrar notified Internet Sciences by email on December 16, 2025, that the January 9 hearing date would proceed as a second case management hearing. At least seven emails from Internet Sciences to the Registrar between December 16, 2025, and January 6, 2026, confirm that Internet Sciences was aware of the January 9 case management hearing and chose not to attend.
[14] Next, I addressed Internet Sciences' motion challenging the legitimacy of the Commission's participation in these proceedings.
[15] On January 5, 2026, Internet Sciences filed a motion (identified by it as "Motion 7") to have the Commission removed as a party to this proceeding (Removal Motion). Internet Sciences alleged that the Commission:
a. was improperly added to the proceeding;
b. has no automatic right to participate as a party in an application for a review of a decision of an exchange that is brought under sections 8 and 21.7 of the Securities Act{6}; and
c. was never granted intervenor status.
[16] The motion also sought an order vacating my December 12 Order on grounds that it was based on receiving submissions from the Commission, an alleged improper party.
[17] Internet Sciences advised in writing on January 5, 2026, that the January 9 case management hearing should be adjourned and no further steps in this proceeding should occur until its Removal Motion was resolved.
[18] The Commission sent an email to the Registrar and parties on January 7, 2026, advising that no adjournment was warranted and that it was prepared to address the Removal Motion as a preliminary matter at the January 9 case management hearing. The Commission's email explained why the issue of its participation as a respondent in the proceeding is straightforward and that it is a proper party.
[19] Internet Sciences sent an email to the Registrar and parties on January 7, 2026, in response to the Commission's email. In this email, Internet Sciences disputed the Commission's explanation. Internet Sciences characterized this response as "not a formal submission" and stated that it reserved the right to file full submissions should the Tribunal permit or request them.
[20] I agreed with the Commission that Internet Sciences' Removal Motion should be dealt with as a preliminary matter at the January 9 case management hearing and that an adjournment of the January 9 case management hearing would not further the objectives of ensuring that this proceeding is conducted justly, expeditiously and cost-effectively.{7}
[21] At the hearing of the motion on January 9, I considered the materials and correspondence that Internet Sciences sent to the Registrar. The Commission's oral submissions repeated and relied on the points set out in its January 7, 2026, email.
[22] I agreed with the Commission and determined that the issue of its participation as a respondent in the proceeding is straightforward and the Removal Motion was entirely without merit.
[23] Rule 13(2) of the Rules of Procedure provides that in Tribunal proceedings where the Commission is not the applicant, the Commission shall be named as a respondent. It is well established that the Commission is a party in review proceedings.{8}
[24] Furthermore, the Commission's role as a party to this proceeding has been clear and undisputed since the first case management hearing held on November 25, 2025. At that hearing, I explained to Internet Sciences that the Rules of Procedure require that the Commission be named as a respondent and the Registrar had regularized the title of proceeding in the Notice of Hearing to include the Commission. Internet Sciences did not object. I also advised that, going forward, all filed documents should include the regularized title of proceeding.{9} All orders, schedules and communications since the first case management hearing reflect that the Commission is a party to these proceedings.
[25] For these reasons, I dismissed the Removal Motion.
[26] Beginning on December 13, 2025, the day after I dismissed Internet Sciences' multiple motions seeking to have me disqualified for bias, and continuing through to the day prior to the January 9 case management hearing, Internet Sciences sent numerous emails to the Registrar and the other parties, including some addressed to the Chief Adjudicator of the Tribunal. In these emails Internet Sciences made new and renewed allegations that I am biased and corrupt and should recuse myself or be disqualified and removed from any further involvement with this matter.
[27] In these emails, Internet Sciences repeatedly asserted that I am biased and corrupt because:
a. my former law firm, Davies Ward Philips & Vineberg LLP (Davies), has allegedly represented the respondent, CSE or CNSX, in over 100 matters, including other Tribunal proceedings, over a period of 20 years; and
b. it was unlawful that I heard and decided Internet Sciences' motion seeking to vary my December 1 Reasons and its motions seeking my removal for bias, because these motions challenged my own conduct.
[28] On December 16, 2025, the Registrar, on my instructions, sent an email to the parties which stated:
The claim in Internet Sciences' December 13, 2025, email that Adjudicator Burke should be disqualified from hearing this proceeding because of an alleged solicitor-client relationship between CNSX and the Davies Ward Phillips & Vineberg LLP firm is unsupported by any evidence.
[29] In response, Internet Sciences emailed the Registrar on December 16, 2025, and disputed that the alleged solicitor-client relationship between CNSX and Davies is unsupported by any evidence. It stated that three exhibits established that the solicitor-client relationship existed:
a. "EXHIBIT B: DAVIES WARD PHILLIPS & VINEBERG CASE DATABASE" which it described as Davies' "publicly available case database" that lists over 100 legal matters in which the firm has represented CNSX and/or CSE over a period spanning 2001 to present;
b. "EXHIBIT C: CSE'S OWN CORPORATE RECORDS" which it described as CSE's own website and corporate disclosure documents that list Davies as counsel of record in multiple proceedings; and
c. "EXHIBIT D: ONTARIO SECURITIES COMMISSION RECORDS" which it described as "OSC proceeding records" that show that Davies represented CNSX/CSE in "multiple tribunal matters over 20+ years".
[30] Internet Sciences did not attach these documents to its email and never provided them to the Registrar.
[31] On December 13, 14 and 16, 2025, Internet Sciences sent four emails addressed directly to the Chief Adjudicator of the Tribunal via the Registrar. In these emails, Internet Sciences elaborated on its complaints that I am biased and corrupt and demanded that the Chief Adjudicator take various actions, including that he:
a. remove me from this proceeding;
b. assign a new panel;
c. declare all of my decisions in this matter "void";
d. stay publication of my orders;
e. remove my orders and reasons from the Tribunal website;
f. publish a formal retraction of my orders and reasons;
g. conduct an institutional review of the panel assignment process at the Tribunal; and
h. issue a public written response to its complaints.
[32] On December 16, 2025, the Chief Adjudicator sent an email to Internet Sciences. He advised that, in accordance with rule 7 of the Rules of Procedure, Internet Sciences should not communicate with him directly about its various complaints and allegations, but instead should make any submissions that it wishes in a hearing, in the proceeding.
[33] Internet Sciences ignored this caution and wrote to the Registrar and the Chief Adjudicator again on December 17, 2025, reiterating its complaints and demands. The Registrar responded as follows on December 17, 2025:
On instructions from the Chief Adjudicator, the Registrar will not reply to further communications from [Internet Sciences]. [Internet Sciences] and other parties may make submissions at the case management hearing on January 9, 2026.
[34] At the January 9 case management hearing (at which Internet Sciences chose not to appear), I noted that Internet Sciences had not filed a formal motion seeking my recusal or disqualification based on its new bias allegations. Despite that, I decided that Internet Sciences' complaints and demands that I should be disqualified for bias should be treated as a motion and dealt with at the January 9 case management hearing. I did so because Internet Sciences' new bias allegations raised a threshold issue going to the legitimacy of me continuing to case manage the proceeding. Through the Chief Adjudicator's email dated December 16, 2025, and the Registrar's email dated December 17, 2025, Internet Sciences was on notice that it should make submissions regarding its complaints at the January 9 case management hearing.
[35] At the January 9 case management hearing, I set out the facts relating to my relationship with Davies and my personal knowledge regarding the alleged solicitor-client relationship with CNSX and CSE. I advised that{10}:
a. I began work at Davies as an articling student in 1994 and progressed to an associate and a partner there. I resigned from the Davies partnership on August 31, 2023;
b. I no longer practice law;
c. I have never acted as counsel for CNSX or CSE; and
d. I have no personal knowledge of the Davies firm having any solicitor-client relationship with CNSX or CSE at any time that I was a lawyer with the firm or at any time since I withdrew from the partnership.
[36] CNSX submitted that allegations of bias are serious and require a proper evidentiary foundation. Because Internet Sciences provided no evidence to establish the alleged solicitor-client relationship between Davies and CNSX or CSE, there is nothing to properly respond to. CNSX advised that it is its understanding that it has never had a solicitor-client relationship with Davies and that the factual foundation for the allegations appears to be fictitious. The Commission agreed with CNSX's position.
[37] I dismissed Internet Sciences' bias motion. I decided that the first ground alleged by Internet Sciences (namely, a conflict based on the alleged solicitor-client relationship) did not raise a reasonable apprehension of bias for the following reasons:
a. Internet Sciences made bald assertions of an alleged solicitor-client relationship and failed to put forward any evidence in support, notwithstanding that the Registrar's December 16, 2025, email specifically noted that the allegation was unsupported by any evidence.
b. I never acted for CNSX or CSE and I have no personal knowledge of any solicitor-client relationship between Davies and CNSX or CSE.
c. I resigned from the Davies partnership more than two years ago.
[38] I also decided that the second ground alleged by Internet Sciences (namely, my "unlawful" December 12 Order) did not raise a reasonable apprehension of bias. Internet Sciences made identical submissions in its motion to vary the December 1 Reasons and in its previous motions seeking my removal for bias that were decided in the December 12 Order. Internet Sciences submitted that it was unlawful and constituted evidence of bias for me to hear and decide those motions because the motions challenged my own conduct. Those submissions were fully considered and rejected by me when I made the December 12 Order.{11} It was inappropriate for Internet Sciences to relitigate the same argument in support of its "new" bias allegations that had previously been decided against it. The fact that Internet Sciences disagrees with the December 12 Order is not evidence of me being biased. Its recourse is to appeal or seek judicial review.
[39] Internet Sciences' demands and pre-conditions for participating in this proceeding going forward included that:
a. I be removed from any further involvement in the proceeding;
b. a new panel be constituted; and
c. the Chief Adjudicator of the Tribunal acknowledge and correct structural defects in this proceeding.
[40] The December 16, 2025, email from the Registrar to the parties (referred to above) advising that Internet Sciences' bias allegation was unsupported by any evidence also stated:
The Panel notes that Internet Sciences refuses to participate in this proceeding until certain demands and conditions are met. These demands and conditions are improper.
Adjudicator Burke is the Case Management Adjudicator for this proceeding. She has been assigned to chair the panel of adjudicators that will hear Internet Sciences' motions, and the panel for the merits hearing.
...
Internet Sciences should note that in the event it chooses not to participate in the case management hearing on January 9, 2026, the panel may dismiss its application, subject to hearing from the remaining parties. (emphasis in the original)
[41] Following the Registrar's December 16, 2025, email, the Chief Adjudicator's December 16, 2025, email (described above), and the Registrar's December 17, 2025, email (described above), Internet Sciences repeatedly confirmed in writing that it would not attend the January 9 case management hearing and would not participate in the proceedings unless its demands were met.
[42] In an email dated January 8, 2026, to the Registrar and the parties, CNSX advised in advance of the January 9 case management hearing that its general position was that, should Internet Sciences decide that it was not going to participate in any hearing over which I presided, it was effectively abandoning its Application and its Application should be dismissed.
[43] In response, Internet Sciences sent an email to the Registrar and the parties dated January 8, 2026, stating that it had not abandoned the Application, and reiterating its demands and pre-conditions for participating in the proceeding.
[44] At the January 9 case management hearing, I advised that I was considering whether the Application should be dismissed as effectively abandoned because of Internet Sciences' refusal to participate. I referred the parties to jurisprudence I was aware of, relating to the issue of dismissing a proceeding for non-participation or conduct that thwarts the proceeding from moving forward.{12} I instructed the Registrar to email these cases to the parties for their consideration and gave the parties time to consider them.
[45] I asked the parties who attended the January 9 case management hearing (CNSX and the Commission) to make submissions on whether I was able to dismiss the Application for non-participation by Internet Sciences, whether there was sufficient notice of the possibility of dismissal, and whether I should dismiss the Application in the circumstances.
[46] The Commission submitted that Internet Sciences had made an informed decision not to participate and that this decision might constitute abandonment of the Application (even over and above its assertions to the contrary) because conditional participation before a different adjudicator is still a refusal to participate before the assigned panel, and refusing to participate until demands are met is a refusal to participate. The Commission agreed that it would be reasonable to treat the Application as having been abandoned and I could consider issuing an order dismissing the Application.
[47] The Commission submitted I could consider providing an extra level of procedural fairness by following the process set out in rule 35 of the Rules of Procedure for summary dismissal of applications. In other words, the Commission submitted that Internet Sciences could be given one final chance to decide if it would participate. The Commission proposed that I notify the parties of my intention to dismiss the Application and the grounds on which I propose to do so, provide written reasons for this intention, wait 30 days for the parties' written submissions in response to my written reasons, and then decide whether to dismiss the Application.
[48] The Commission also expressed concerns that my reasons for making the December 12 Order had not yet been issued and that those reasons might assist Internet Sciences, notwithstanding that Internet Sciences knew that its motions (including bias motions) had been dismissed.
[49] CNSX submitted that the jurisprudence noted above supported dismissing the Application outright on grounds that it had been abandoned by Internet Sciences. However, CNSX submitted, in the alternative and from the perspective of maintaining optimal procedural fairness, I could first issue reasons for the December 12 Order, my dismissal of the Removal Motion and my dismissal of Internet Sciences' new bias motion, and give Internet Sciences a deadline within which to agree to participate in these proceedings within a reasonable window of time, following issuance of such reasons.
[50] Separate from the Commission's and CNSX's submissions, I inquired of the Commission and CNSX whether there might be a workable "middle ground" scenario where my orders dismissing the Removal Motion and Internet Sciences' further bias complaints were issued and Internet Sciences was directed to attend a further case management hearing on January 12, 2026 (a date previously reserved with the parties) to confirm that it would participate in the Application, failing which the Application would be dismissed. CNSX agreed that this would be workable. The Commission did not have instructions.
[51] I decided that Internet Sciences' Application should be dismissed as having been abandoned.
[52] I concluded that Internet Sciences had been provided with sufficient notice that:
a. I had been appointed as the case management adjudicator for its Application;
b. Internet Sciences' refusal to participate in proceedings adjudicated by me was improper; and
c. the Application might be dismissed at the January 9 case management hearing as a result of Internet Sciences' refusal to participate.
[53] Further, the Chief Adjudicator's December 16, 2025, email and the Registrar's December 16, 2025, and December 17, 2025, emails informed Internet Sciences that Internet Sciences' demands and pre-conditions were improper and that its issues needed to be raised in a hearing in the proceeding before me, including at the January 9 case management hearing.
[54] The case law from the Ontario Divisional Court establishes that if an applicant is not prepared to co-operate with an administrative tribunal in its process, a tribunal is entirely within its rights to dismiss the applicant's complaint.{13}
[55] This was the situation in Eisenberg v Seneca College of Applied Arts and Technology. In that case, an applicant refused to cooperate with scheduling a summary hearing, insisting on document disclosure first, even after having been warned that failure to provide dates could result in dismissal. The tribunal dismissed the complaint as abandoned, and the Divisional Court upheld that decision, confirming that if an applicant will not cooperate with a tribunal's process, dismissal is reasonable. The Divisional Court considered whether the decision of the tribunal was reasonable in the circumstances and noted that "the procedural issues involved were ones that fell within the ambit of the tribunal's right to regulate its own process."{14} Further, the Divisional Court explained:
Given the reaction of the applicant to the Tribunal's decision to hold such a hearing and his refusal to co-operate in its scheduling, we are of the view that the Tribunal acted reasonably in dismissing his complaint. Indeed, we do not see that the Tribunal had any realistic alternative but to do so. ... The applicant's unilateral refusal to provide dates for the summary hearing effectively thwarted the Tribunal's process. If the applicant was not prepared to co-operate with the Tribunal in its process, the Tribunal was entirely within its rights to dismiss the applicant's complaint.{15}
[56] This Divisional Court case law is cited and followed in numerous decisions of the Human Rights Tribunal of Ontario.{16}
[57] In this case, the situation is similar to that in Eisenberg. Internet Sciences is refusing to participate in any hearings going forward unless its inappropriate unilateral demands are met. Internet Sciences' refusal to provide its availability for a second case management hearing in December 2025 adversely impacted the efficiency of this proceeding and resulted in the January 9 and 12 dates reserved for hearing Internet Sciences' motions being forfeited for such motions. Case management directions are neither suggestions, nor proposals, nor invitations for debate, discussion or objections.{17} Internet Sciences' outstanding motions and the merits of its Application cannot move forward without its participation, and Internet Sciences has repeatedly confirmed that it will not participate unless I am removed as an adjudicator. Internet Sciences is essentially seeking to hold this proceeding hostage, pending satisfaction of its improper demands.
[58] Both the Commission and CNSX agreed that the circumstances are sufficient to warrant an order dismissing Internet Sciences' Application on the basis that it has been abandoned. I disagreed with the Commission's suggestion that I should consider following the process in rule 35. Rule 35 is intended to address proceedings that are "frivolous, vexatious, or an abuse of process". I have not concluded that this proceeding, in its entirety, is frivolous, vexatious, or an abuse of process. Rather it is Internet Sciences' conduct that is problematic. In my view, rule 35 does not apply in this instance.
[59] I also did not favour CNSX's suggestion that I issue outstanding reasons first, and give Internet Sciences additional time. Doing so would prolong the current situation and prevent any progress in the proceeding. Internet Sciences' communications offered no basis to conclude that its receiving reasons for the December 12 Order and for my dismissal of the Removal Motion and new bias motion would have any impact on its stated refusal to participate.
[60] Although I raised in the January 9 case management hearing for the parties' consideration a "middle ground" scenario that would give Internet Sciences an option to reconsider its position and decide (as a last chance) whether it wanted to participate at a further case management hearing on January 12, 2026, I had significant concerns about how such a requirement or order would be drafted or enforced, given Internet Sciences' clear and repeated objections to participating in this proceeding in front of me as the case management adjudicator. At the end of the day, I was satisfied that Internet Sciences knowingly and improperly refused to participate in the Application, with notice that its refusal to participate might result in the dismissal of its Application. I was satisfied that, in the circumstances, dismissal was reasonable and necessary in order to control this Tribunal's process.
[61] For all the reasons above, I proceeded with the January 9 case management hearing in the absence of participation by Internet Sciences, and I dismissed Internet Sciences' Removal Motion, new bias motion, and Application. I also vacated all of the remaining hearing dates in this matter.
[62] For greater certainty, as a consequence of the dismissal of Internet Sciences' Application, its outstanding motions also fall away.
Dated at Toronto this 9th day of April, 2026.
{1} Internet Sciences Inc v CNSX Markets Inc, (2026) 49 OSCB 427; https://www.capitalmarketstribunal.ca/sites/default/files/2026-01/rad_20260109_internet-sciences-inc.pdf
{2} Internet Sciences Inc v CNSX Markets Inc, (2025) 48 OSCB 9958; https://www.capitalmarketstribunal.ca/sites/default/files/2025-11/rad_20251127_internet-sciences-inc.pdf
{3} Internet Sciences Inc v CNSX Markets Inc, 2025 ONCMT 17
{4} Internet Sciences Inc v CNSX Markets Inc, (2025) 48 OSCB 10335; https://www.capitalmarketstribunal.ca/sites/default/files/2025-12/rad_20251212_internet-sciences-inc.pdf. The related Reasons for Decision are at Internet Sciences Inc v CNSX Markets Inc, 2026 ONCMT 9
{5} RSO 1990, c S.22
{6} RSO 1990, c S.5
{7} Capital Markets Tribunal Rules of Procedure (Rules of Procedure), r 1 and 34(1)
{8} Ziaian (Re), 2021 ONSEC 9 at paras 16-18
{9} Hearing Transcript, November 25, 2025, at p 15 line 16 to p 16 line 10
{10} Hearing Transcript, January 9, 2026 at p 30 line 26 to p 31 line 12
{11} See Internet Sciences Inc v CNSX Markets Inc, (2025) 48 OSCB 10335; https://www.capitalmarketstribunal.ca/sites/default/files/2025-12/rad_20251212_internet-sciences-inc.pdf; Internet Sciences Inc v CNSX Markets Inc, 2026 ONCMT 9 at paras 46-52 and 62-67
{12} Ontario Divisional Court cases: Eisenberg v Seneca College of Applied Arts and Technology, 2012 ONSC 4802 (Eisenberg); Sui v Liang, 2022 ONSC 5623 (Sui); Tribunal case: Vanlandschoot (Re), 2024 ONCMT 4; Other administrative tribunal cases: Gale v FCA Canada Inc o/a Stellantis o/a Chrysler Canada, 2025 HRTO 2211 (Gale); Kerr v Saleem, 2025 HRTO 2736 (Kerr); Bilon v Ontario Teachers Insurance Plan, 2025 HRTO 2836 (Bilon); and Sadowski v Health and Rehabilitation Sciences Graduate Student Society, 2025 HRTO 2956 (Sadowski)
{13} Eisenberg at para 13; Sui at paras 33-35
{14} Eisenberg at para 10
{15} Eisenberg at para 13
{16} Gale at para 12; Bilon at para 15; Sadowski at para 13
{17} Sui at para 33
National Policy 11-207 Failure-to-File Cease Trade Orders and Revocations in Multiple Jurisdictions -- Application for a partial revocation of a cease trade order -- issuer cease traded due to failure to file audited annual financial statements, associated management's discussion and analysis and certifications of the foregoing filings -- issuer has applied for a partial revocation of the cease trade order to permit the issuer to proceed with a private placement to accredited investors -- issuer will use proceeds from the private placement to bring itself into compliance with its continuous disclosure obligations, pay outstanding filing fees and for working capital purposes -- partial revocation granted subject to conditions.
Securities Act, R.S.O. 1990, c. S.5, as am., ss 127, 144.
National Policy 11-207 Failure-to-File Cease Trade Orders and Revocations in Multiple Jurisdictions.
Citation: 2026 BCSECCOM 110
¶ 1 Aurelius Minerals Inc. (the Issuer) is subject to a failure-to-file cease trade order (the FFCTO) issued by the regulator of the British Columbia Securities Commission (the Principal Regulator) and Ontario (each a Decision Maker) respectively on May 8, 2023.
¶ 2 The Issuer has applied to each of the Decision Makers for a partial revocation order of the FFCTO.
¶ 3 This order is the order of the Principal Regulator and evidences the decision of the Decision Maker in Ontario.
¶ 4 Terms defined in National Instrument 14-101 Definitions or in National Policy 11-207 Failure-to-File Cease Trade Orders and Revocations in Multiple Jurisdictions (NP 11-207) have the same meaning if used in this order, unless otherwise defined.
¶ 5 This decision is based on the following facts represented by the Issuer:
1. The Issuer was incorporated under the laws of the Province of British Columbia on April 5, 2007.
2. The issuer's head office is located in Vancouver, British Columbia.
3. The Issuer is a reporting issuer under the securities legislation of the provinces of British Columbia, Alberta, and Ontario. The issuer is not a reporting issuer in any other jurisdiction of Canada.
4. The authorized share capital of the Issuer consists of an unlimited number of common shares (the Shares), of which there are 53,752,813 Shares issued and outstanding. The Issuer confirms that there are no convertible or debt securities currently outstanding other than options exercisable into 955,000 Shares granted pursuant to the Issuer's stock option plan that expire on October 19, 2026.
5. The Shares are listed and posted for trading on the NEX board of the TSX Venture Exchange (the TSXV) under the symbol "AUL.H".
6. The Issuer confirms that its SEDAR+ and SEDI profiles are up to date.
7. The FFCTO was issued as a result of the Issuer's failure to file:
(a) audited annual financial statements for the fiscal year ended December 31, 2022 as required by National Instrument 51-102 Continuous Disclosure Obligations (NI 51-102),
(b) related annual management's discussion and analysis (MD&A) for the fiscal year ended December 31, 2022, as required by NI 51-102, and
(c) certification of the foregoing annual filings, as required by National Instrument 52-109 Certification of Disclosure in Issuers' Annual and Interim Filings,
(collectively, the 2022 Annual Filing Materials).
8. As a result of the FFCTO, trading of the Shares on the TSXV was suspended on May 8, 2023.
9. The Issuer was unable to complete a reinstatement to Tier 2 of the TSXV or meet the Tier 2 Continued Listing Requirements by August 10, 2023, resulting in its listing being transferred to the NEX board on November 29, 2023.
10. The delay in finalizing the 2022 Annual Filing Materials resulted from the Issuer's difficulty in 2022 to raise sufficient financing to carry out planned work on its mineral properties and cover corporate expenses, which required prioritizing payments to maintain operational sustainability and ultimately led to an outstanding balance with the Issuer's auditor.
11. Subsequent to the failure to file the 2022 Annual Filing Materials, the Issuer has also failed to file the following:
(a) the interim unaudited financial statements for the interim periods ended March 31, 2023, June 30, 2023, September 30, 2023, March 31, 2024, June 30, 2024, September 30, 2024, March 31, 2025, June 30, 2025, and September 30, 2025,
(b) MD&A relating to the interim unaudited financial statements described in subparagraph (a) above,
(c) annual audited financial statements for the fiscal years ended December 31, 2023 and December 31, 2024,
(d) MD&A relating to the annual audited financial statements described in subparagraph (b) above, and
(e) certification of the interim and annual filings in respect of the financial statements and MD&A referred to in subparagraphs (a), (b), (c), and (d) above,
(together with the 2022 Annual Filing Materials, the Required Continuous Disclosure).
12. Other than the failure to file the Required Continuous Disclosure, the Issuer is not in default of any of the requirements of the Legislation.
13. There have been no material changes in the business, operations, or affairs of the Issuer since the issuance of the FFCTO that have not been previously disclosed by news release and/or material change report and filed on the Issuer's SEDAR+ profile.
14. The Issuer has an immediate need for cash to pay for the audit expenses associated with bringing its continuous disclosure obligations up to date, preparing a management information circular for an annual meeting of shareholders, and for administrative expenses, professional fees, and certain other expenses related to maintaining its existing assets.
15. In order to finance the above-referenced items, the Issuer seeks a partial revocation of the FFCTO to take all actions necessary to complete a debt financing (the Debt Financing) for up to $830,000 in aggregate principal amount of secured promissory notes (the Notes) that are expected to bear interest at a rate per annum equal to CORRA plus 5%, with all interest accrued and added to the principal amount of the Notes. All principal, together with accrued and unpaid interest under the Notes, will be due and immediately payable on the one year anniversary of the Debt Financing closing, unless otherwise extended by the holders of the Notes holding greater than 66 2/3% of the principal amount of the Notes. The Notes will be secured under a general security agreement together with a pledge of all issued and outstanding common shares of Aureus Gold Inc., a wholly-owned subsidiary of the Issuer.
16. It is anticipated that the Debt Financing will be conducted on a prospectus exempt basis to one or more investors located in British Columbia, Newfoundland and Labrador, and Ontario who are accredited investors, as defined in section 2.3 of National Instrument 45-106 -- Prospectus Exemptions (each, an Investor).
17. Three of the Investors meet the definition of "related party" in Multilateral Instrument 61-101Protection of Minority Security Holders in Special Transactions (MI 61-101) and the Debt Financing constitutes a "related party transaction" pursuant to the definition of that term in MI 61-101. The Issuer will rely on the exemption from the formal valuation requirement contained in section 5.5(b) of MI 61-101, since the securities of the Issuer are not listed on one of the specified stock markets in section 5.5(b) of MI 61-101. The Issuer will rely on the exemption from the minority approval requirement contained in section 5.7(a) of MI 61-101, on the basis that neither the fair market value of the securities issued, nor the fair market value of the consideration for the transactions, insofar as it involves interested parties, exceeds 25% of the Issuer's market capitalization as determined by the board of directors of the Issuer acting in good faith. The foregoing shall be disclosed in the disclosure document for the Debt Financing, being the news release and material change report, which material change report will be in compliance with section 5.2 of MI 61-101.
18. The Debt Financing may be considered to involve a trade of securities of the Issuer and acts in furtherance of trades of the Issuer and as such, cannot be completed without a partial revocation of the FFCTO.
19. The Issuer's securities will remain subject to the FFCTO and the Issuer will request an acknowledgement from the Investors in the Debt Financing to this effect.
20. The proceeds from the Debt Financing are anticipated to be used to:
(a) prepare and file all documents required to bring the Issuer's continuous disclosure obligations up to date with a view to obtaining a full revocation of the FFCTO,
(b) prepare a management information circular for an annual meeting of shareholders and for the ancillary costs associated with holding a shareholder meeting,
(c) pay outstanding administrative expenses, professional fees, and certain other expenses, and
(d) for funding the ongoing operations of the Issuer.
21. Specifically, the Issuer intends to use the proceeds from the Debt Financing as follows:
Audit fees owing to the Issuer's auditor
$140,000
Audit fees payable to the Issuer's auditor in connection with the filing of the Issuer's annual filings for its financial year ended December 31, 2025, which are due by April 30, 2026
$35,000
Consulting fees related to accounting, management, and supporting audit reliance
$117,000
Administrative expenses associated with the annual general meeting and circular
$30,000
Administrative expenses related to tax preparation
$16,000
Administrative expenses related to IT services
$6,000
Miscellaneous administrative fees and expenses
$6,000
Legal fees payable to the Issuer's legal counsel in connection with the annual general meeting, Debt Financing, and application for a full revocation order
$135,000
Filing fees related to the application for a full revocation of the FFCTO
$15,000
CSA regulatory fees
$40,000
Fees relating to NEX listing
$5,000
Outstanding or overdue accounts payable
$230,000
General working capital
$55,000
Total
$830,000
22. The Issuer reasonably believes that proceeds from the Debt Financing will be sufficient to bring its continuous disclosure up to date, pay all outstanding related fees, and provide it with sufficient working capital to continue its business.
23. Upon issuance of this partial revocation order, the Issuer will issue a news release announcing the partial revocation order and the intention to complete the Debt Financing. Upon completion of the Debt Financing, the Issuer will issue a news release and file a material change report. As other material events transpire, the Issuer will issue appropriate news releases and material change reports as applicable.
24. Subsequent to this partial revocation order being granted and within a reasonable time following the completion of the Debt Financing, the Issuer intends to apply for and obtain a full revocation of the FFCTO by filing all documents that are required to bring its continuous disclosure obligations up to date, paying all outstanding fees and correcting any other continuous disclosure deficiencies that may subsequently arise.
25. The Issuer intends to apply to the NEX board of the TSXV for a resumption in trading of the Shares upon applying for and obtaining a full revocation of the FFCTO.
¶ 6 Each of the Decision Makers is satisfied that a partial revocation order of the FFCTO meets the test set out in the Legislation for the Decision Makers to make the decision.
¶ 7 The decision of the Decision Makers under the Legislation is that the FFCTO is partially revoked as it applies to the Issuer solely to permit all trades in securities of the Issuer (including for greater certainty, acts in furtherance of trades in securities of the Issuer) that are necessary for and are in connection with the Debt Financing, provided that:
1. prior to the completion of the Debt Financing, the Issuer will
(a) provide to each of the Investors:
(i) a copy of the FFCTO and a copy of this partial revocation order, and
(ii) written notice that the securities of the Issuer will remain subject to the FFCTO until such time as a full revocation is granted and that the granting of any partial revocation does not guarantee the issuance of a full revocation in the future, and
(b) obtain from each Investor a signed and dated acknowledgement which clearly states that the securities of the Issuer acquired by the Investor will remain subject to the FFCTO until a full revocation order is granted, the issuance of which is not certain, and
2. upon request, the Issuer will provide to staff of the Principal Regulator a copy of the signed acknowledgements referenced above.
¶ 8 April 7, 2026
OSC File #: 2025/0092
National Policy 11-206 Process for Cease to be a Reporting Issuer Applications -- Application to cease to be a reporting issuer under applicable securities laws -- The issuer is not an OTC reporting issuer; the securities of the issuer are beneficially owned by fewer than 15 securityholders in each of the jurisdictions of Canada and fewer than 51 securityholders worldwide; no securities of the issuer are traded on a market in Canada or another country; the issuer is not in default of securities legislation except it has not filed certain continuous disclosure documents.
Securities Act, R.S.O. 1990, c. S.5, as am., s. 1(10)(a)(ii).
National Policy 11-206 Process for Cease to be a Reporting Issuer Applications.
The principal regulator in the Jurisdiction has received an application from the Filer for an order under the securities legislation of the Jurisdiction of the principal regulator (the Legislation) that the Filer has ceased to be a reporting issuer in all jurisdictions of Canada in which it is a reporting issuer (the Order Sought).
Under the Process for Cease to be a Reporting Issuer Applications (for a passport application):
(a) the Ontario Securities Commission is the principal regulator for this application, and
(b) this order is the order of the principal regulator and evidences the decision of the securities regulatory authority or regulator in Ontario.
Terms defined in National Instrument 14-101 Definitions and Multilateral Instrument 11-102 Passport System have the same meaning if used in this order, unless otherwise defined.
This order is based on the following facts represented by the Filer:
1. The Filer is a corporation existing under the laws of State of New York, U.S.A. with its head office located at 1 Penn Plaza, Suite 3200, New York, NY 10119.
2. The Filer is a reporting issuer in the Province of Ontario.
3. On September 8, 2025, DICK'S Sporting Goods, Inc., a Delaware corporation (DSG) listed on the New York Stock Exchange (NYSE) under the symbol "DKS", consummated the previously announced merger contemplated by merger agreement and plan of merger (the Merger Agreement), dated as of May 15, 2025, by and among DSG, the Filer, and RJS Sub LLC, a New York limited liability company and wholly owned subsidiary of DSG (Merger Sub). Pursuant to the terms of the Merger Agreement, Merger Sub merged with and into the Filer (the Merger), with the Filer surviving as a wholly owned subsidiary of DSG.
4. At the effective time of the Merger (the Effective Time), each share of the Filer's common stock, par value $0.01 per share (Foot Locker common stock), issued and outstanding immediately prior to the Effective Time (other than certain shares of Foot Locker common stock that were held in treasury by the Filer or owned by DSG or Merger Sub or owned by direct or indirect subsidiaries of DSG) was converted into the right to receive, without interest and at the election of the holder of such share: (a) $24.00, if an election to receive cash consideration was properly made and not properly changed, revoked or deemed revoked (or if no election was validly made) (the Cash Consideration) or (b) 0.1168 shares of DSG common stock, par value $0.01 per share (DSG common stock), if an election to receive stock consideration was properly made and not properly changed, revoked or deemed revoked (the Stock Consideration). The election was not subject to a minimum or maximum amount of Cash Consideration or Stock Consideration.
5. Pursuant to the terms set forth in the Merger Agreement, at the Effective Time, each outstanding equity award with respect to Foot Locker common stock outstanding as of immediately prior to the Effective Time was treated as follows:
a. Each option to purchase Foot Locker common stock granted under the Foot Locker 2007 Stock Incentive Plan or granted as an inducement award (Foot Locker option) that was unexercised, whether or not vested, and that had a per share exercise price that was less than the Cash Consideration (in-the-money option) was cancelled and converted into the right to receive an amount in cash equal to
i. the number of shares of Foot Locker common stock subject to the Foot Locker option as of immediately prior to the Effective Time multiplied by:
ii. the excess (if any) of the Cash Consideration over the per share exercise price applicable to the Foot Locker option.
b. Each Foot Locker option that was not an unexercised in-the-money option, whether or not vested, was cancelled for no consideration.
c. Each restricted stock unit award granted under the Foot Locker 2007 Stock Incentive Plan or granted as an inducement award (Foot Locker RSU Award) that was held by an individual who was not a non-employee director of the Filer and each performance stock unit award granted under the Foot Locker 2007 Stock Incentive Plan or granted as an inducement award (Foot Locker PSU Award) was assumed and converted into a time-based restricted stock unit award in respect of a number of shares of DSG common stock equal to the product obtained by multiplying
i. the total number of shares of Foot Locker common stock subject to the Foot Locker RSU Award or Foot Locker PSU Award, as applicable, as of immediately prior to the Effective Time by:
ii. the exchange ratio (i.e., 0.1168), with any fractional shares rounded to the nearest whole share. For the purposes of the immediately preceding sentence, the number of shares of Foot Locker common stock subject to a Foot Locker PSU Award as of immediately prior to the Effective Time was determined in accordance with the applicable award agreements.
d. Each Foot Locker RSU Award that was held by a non-employee director of the Filer, whether or not vested, was cancelled and converted into the right to receive an amount in cash equal to
i. the number of shares of Foot Locker common stock subject to the Foot Locker RSU Award as of immediately prior to the Effective Time multiplied by:
ii. the Cash Consideration.
e. Each deferred stock unit award granted under the Foot Locker 2007 Stock Incentive Plan (Foot Locker DSU Award) was cancelled and converted into the right to receive, at the earliest time following the Effective Time permitted by the award terms that would not trigger any additional tax or penalty under Section 409A of the United States Internal Revenue Code of 1986, as amended, the Cash Consideration in respect of each share of Foot Locker common stock subject to the Foot Locker DSU Award as of immediately prior to the Effective Time.
6. The total aggregate consideration payable in the Merger, not including the treatment of any equity awards of the Filer described above, was 9,579,640 million whole shares of DSG common stock and $222,961,814.59 in cash, which DSG funded through cash on hand.
7. The issuance of shares of DSG common stock in connection with the Merger was registered under the Securities Act of 1933, as amended, pursuant to a registration statement on Form S-4 (File No. 333-288244) filed by DSG with the Securities and Exchange Commission and declared effective on July 10, 2025.
8. Following completion of the Merger, the sole shareholder of the Filer is DSG.
9. Following completion of the Merger, the Filer has been delisted from NYSE.
10. The Filer is not an OTC reporting issuer under Multilateral Instrument 51-105 Issuers Quoted in the U.S. Over-the-Counter Markets.
11. The outstanding securities of the Filer, including debt securities, are beneficially owned, directly or indirectly, by fewer than 15 securityholders in each of the jurisdictions of Canada and fewer than 51 securityholders in total worldwide.
12. No securities of the Filer, including debt securities, are traded in Canada or another country on a marketplace as defined in National Instrument 21-101 Marketplace Operation or any other facility for bringing together buyers and sellers of securities where trading data is publicly reported.
13. The Filer is not in default of securities legislation in any jurisdiction of Canada, other than its obligation to file interim financial statements and related management's discussion and analysis for the period ended October 31, 2025, as required under National Instrument 51-102 Continuous Disclosure Obligations, and the related certificates as required under National Instrument 52-109 Certification of Disclosure in Issuers' Annual and Interim Filings (the Defaults).
14. But for the Defaults, each of which were due to be filed after the completion of the Merger, the Filer would be eligible to use the "simplified procedure" under National Policy 11-206 Process for Cease to be a Reporting Issuer Applications.
15. The Filer has no current intention to seek public financing by way of an offering of securities in Canada or elsewhere or to make or maintain a market in securities of the Filer.
16. Upon the granting of the Order Sought, the Filer will no longer be a reporting issuer or the equivalent in any jurisdiction in Canada.
The principal regulator is satisfied that the order meets the test set out in the Legislation for the principal regulator to make the order.
The decision of the principal regulator under the Legislation is that the Order Sought is granted.
DATED at Toronto on this _7th_ day of __April____, 2026.
OSC File #: 2026-35
Guardian Capital Group Limited -- s. 1(6) of the OBCA
Applicant deemed to have ceased to be offering its securities to the public under the Business Corporations Act (Ontario).
Business Corporations Act, R.S.O. 1990, c. B.16, as am., s. 1(6).
(Subsection 1(6) of the OBCA)
UPON the application of the Applicant to the Ontario Securities Commission (the Commission) for an order pursuant to subsection 1(6) of the OBCA to be deemed to have ceased to be offering its securities to the public;
AND UPON the Applicant representing to the Commission that:
1. the Applicant is an "offering corporation" as defined in subsection 1(1) of the OBCA;
2. the Applicant's principal business offices are located at Suite 2700, 199 Bay Street, Commerce Court West, Toronto, Ontario, M5L 1E8;
3. the Applicant has no intention to seek public financing by way of an offering of securities;
4. on March 31, 2026, the Applicant was granted an order (the Reporting Issuer Order) pursuant to subclause 1(10)(a)(ii) of the Securities Act (Ontario) that it is not a reporting issuer in Ontario and is not a reporting issuer or the equivalent in any jurisdiction of Canada in accordance with the simplified procedure set out in National Policy 11-206 Process for Cease to be a Reporting Issuer Applications; and
5. the representations set out in the Reporting Issuer Order continue to be true.
AND UPON the Commission being satisfied that to grant this order would not be prejudicial to the public interest;
IT IS HEREBY ORDERED by the Commission pursuant to subsection 1(6) of the OBCA that the Applicant is deemed to have ceased to be offering its securities to the public.
DATED at Toronto this 9th day of April, 2026.
OSC File #: 2026/0138
Titanium Transportation Group Inc.
National Policy 11-206 Process for Cease to be a Reporting Issuer Applications -- Application for an order that the issuer is not a reporting issuer under applicable securities laws -- issuer has more than 15 securityholders in a Canadian jurisdiction, but fewer than 51 securityholders in Canada. The issuer is not in default of securities legislation except it has not filed certain continuous disclosure documents.
Securities Act, R.S.O. 1990, c. S.5, as am., s. 1(10)(a)(ii).
The principal regulator in the Jurisdiction has received an application from the Filer for an order under the securities legislation of the Jurisdiction of the principal regulator (the "Legislation") that the Filer has ceased to be a reporting issuer in all jurisdictions of Canada in which it is a reporting issuer (the "Order Sought").
Under the Process for Cease to be a Reporting Issuer Applications (for a passport application):
(a) the Ontario Securities Commission is the principal regulator for this application; and
(b) the Filer has provided notice that subsection 4C.5(1) of Multilateral Instrument 11-102 -- Passport System ("MI 11-102") is intended to be relied upon in Alberta, British Columbia, Manitoba, New Brunswick, Newfoundland and Labrador, Nova Scotia, Prince Edward Island and Saskatchewan.
Terms defined in National Instrument 14-101 -- Definitions and MI 11-102 have the same meaning if used in this order, unless otherwise defined.
This order is based on the following facts represented by the Filer:
1. Titanium Transportation Group Inc. ("Predecessor Titanium") was incorporated under the Canada Business Corporations Act (the "CBCA") on July 11, 1989 and subsequently became a reporting issuer in the Reporting Jurisdictions (as defined herein), and, thereafter, Predecessor Titanium and Trunkeast Investments Canada Limited were amalgamated on March 31, 2026 under the CBCA to continue as the Filer, which is a reporting issuer in each of Ontario, Alberta, British Columbia, Manitoba, New Brunswick, Newfoundland and Labrador, Nova Scotia, Prince Edward Island and Saskatchewan (collectively, the "Reporting Jurisdictions").
2. The Filer's registered and head office is located at 32 Simpson Road, Bolton, Ontario, L7E 1G9.
3. The authorized capital of the Filer consists of an unlimited number of common shares (the "Common Shares") and an unlimited number of preferred shares (the "Preferred Shares", and together with the Common Shares, the "Shares"), of which 24,403,352 Common Shares and 22,522,523 Preferred Shares were outstanding as of April 2, 2026.
4. On January 14, 2026, Predecessor Titanium entered into an arrangement agreement (the "Arrangement Agreement") with TTNM Management Acquisition Limited (the "Purchaser") and Trunkeast Investments Canada Limited (the "Parent"), pursuant to which the Purchaser would acquire all of the issued and outstanding common shares in the capital of Predecessor Titanium (the "Predecessor Common Shares"), other than the Predecessor Common Shares owned by the Parent and its affiliated entities, and other shareholders comprised of certain directors, executive officers and key employees of Predecessor Titanium (collectively, the "Rollover Shareholders"), for cash consideration of $2.22 per Predecessor Common Share (the "Cash Consideration"), by way of a court-approved plan of arrangement under section 192 of the CBCA (the "Arrangement"). The Rollover Shareholders would transfer their Predecessor Common Shares to the Purchaser in exchange for an equal number of common shares in the capital of the Purchaser (the "Rollover Consideration").
5. On January 15, 2026, Predecessor Titanium issued a news release, publicly announcing the Arrangement Agreement.
6. On February 4, 2026, the Ontario Superior Court of Justice (Commercial List) issued an interim order (the "Interim Order") authorizing the special shareholders' meeting on March 10, 2026, to consider the Arrangement.
7. Predecessor Titanium distributed the meeting materials (which included, among other things, the management information circular, notice of meeting, form of proxy, voting instruction form and letter of transmittal) on February 13, 2026, to the holders of Predecessor Common Shares (the "Shareholders"), as well as the Director appointed under the CBCA, in connection with the special meeting of the Shareholders that took place on March 10, 2026 (the "Meeting") to consider the Arrangement, in accordance with the Interim Order.
8. Shareholder approval of the Arrangement was obtained by Predecessor Titanium at the Meeting, whereby: (i) holders of 98.82% of the Predecessor Common Shares represented at the Meeting voted in favour of resolutions to approve the Arrangement; and (ii) holders of 95.51% of the Predecessor Common Shares represented at the Meeting whose votes may be included in determining if minority approval is obtained pursuant to Multilateral Instrument 61-101 -- Protection of Minority Security Holders in Special Transactions voted in favour of resolutions to approve the Arrangement. Shareholders holding an aggregate of 31,948,952 Predecessor Common Shares, representing 68.666% of all issued and outstanding Predecessor Common Shares, were present, in person or by proxy, at the Meeting.
9. On March 18, 2026, the Ontario Superior Court of Justice (Commercial List) issued the final order approving the Arrangement.
10. The Arrangement was completed on March 31, 2026. As a result of the Arrangement, all Predecessor Common Shares were transferred to the Purchaser in exchange for the Cash Consideration and Rollover Consideration, as applicable, resulting in the Purchaser becoming the sole shareholder of Predecessor Titanium.
11. On March 31, 2026, immediately after the effective time of the Arrangement, Predecessor Titanium and the Purchaser amalgamated as one corporation under the CBCA to form the Filer, which was named "Titanium Transportation Group Inc." (the "Amalgamation").
12. Pursuant to the Amalgamation: (i) each common share in the capital of the Purchaser was converted into one Common Share; (ii) each preferred share in the capital of the Purchaser was converted into one Preferred Share; and (iii) all Predecessor Common Shares were cancelled without any repayment of capital or payment of any other consideration in respect thereof.
13. Upon completion of the Amalgamation, the Filer became a "reporting issuer" in Ontario by operation of subparagraph (e) of the definition of "reporting issuer" under the Securities Act (Ontario), as the Filer is the company whose existence continued following the exchange of securities in connection with the Arrangement and Amalgamation, and Predecessor Titanium had been a reporting issuer for at least twelve months prior to the Effective Date.
14. Prior to the Arrangement, the Parent owned approximately 23.5% of the Predecessor Common Shares. As of the date of this order, the Parent owns approximately 44.94% of the Common Shares and 100% of the Preferred Shares, and the other 48 Rollover Shareholders, as a group, own approximately 55.06% of the Common Shares.
15. In connection with the Amalgamation, the Rollover Shareholders entered into a unanimous shareholders agreement, which became effective upon the closing of the Amalgamation. Such unanimous shareholders agreement includes private company restrictions on the transfer of Shares, as contemplated by section 2.4 of National Instrument 45-106 -- Prospectus Exemptions and consistent with a company intending to cease to be a reporting issuer.
16. The Rollover Shareholders are comprised solely of members of management of the Filer, certain directors and key employees of the Filer, and persons known directly by management and/or directors of the Filer. All of the 49 Rollover Shareholders are resident in Ontario.
17. The Filer is not eligible to surrender its status as a reporting issuer pursuant to the simplified procedure under section 19 of National Policy 11-206 -- Process for Cease to be a Reporting Issuer Applications as the Common Shares are not beneficially owned, directly or indirectly, by fewer than 15 securityholders in each of the jurisdictions of Canada and that the Filer failed to file its audited financial statements, accompanying management discussion and analysis and certification of the foregoing filings, along with its annual information form for the year ended December 31, 2025 (collectively, the Filings), which were due on March 31, 2026 in accordance with National Instrument 51-102 -- Continuous Disclosure Obligations.
18. The Filer issued a news release on March 31, 2026 advising the Shareholders that the Filer has provided the Toronto Stock Exchange (the "TSX") with the information and materials requested by the TSX to effect the delisting of the Common Shares from the TSX and has applied to have the Common Shares delisted from the OTCQX, and that the Filer will apply under applicable Canadian securities laws to cease to be a reporting issuer in each of the Reporting Jurisdictions.
19. The Common Shares were delisted from trading on the TSX following the close of trading on April 2, 2026, and delisted from the OTCQX on April 2, 2026.
20. The Filer is not an OTC reporting issuer under Multilateral Instrument 51-105 -- Issuers Quoted in the U.S. Over-the-Counter Markets.
21. No securities of the Filer, including debt securities, are traded in Canada or another country on a "marketplace" as defined in National Instrument 21-101 -- Marketplace Operation or any other facility for bringing together buyers and sellers of securities where trading data is publicly reported.
22. The Filer is applying for an order that the Filer has ceased to be a reporting issuer in all of the jurisdictions of Canada in which it is a reporting issuer.
23. The Filer has no intention to seek public financing by way of an offering of securities.
24. The Filer is not in default of securities legislation in any jurisdiction, except for its failure to file the Filings.
25. The Filer is not required to obtain any consents or approvals to cease to be a reporting issuer in any jurisdiction other than the Order Sought.
26. Upon the granting of the Order Sought, the Filer will not be a reporting issuer or the equivalent in any jurisdiction of Canada.
The principal regulator is satisfied that the order meets the test set out in the Legislation for the principal regulator to make the order.
The decision of the principal regulator under the Legislation is that the Order Sought is granted.
DATED at Toronto on this 10th day of April, 2026
OSC File #: 2026-150
GDI Integrated Facility Services Inc.
National Policy 11-206 Process for Cease to be a Reporting Issuer Applications -- The issuer ceased to be a reporting issuer under securities legislation.
Securities Act, R.S.O. 1990, c. S.5, as am., s. 1(10)(a)(ii).
[Original text in French]
March 31, 2026
The securities regulatory authority or regulator in each of the Jurisdictions (Decision Maker) has received an application from the Filer for an order under the securities legislation of the Jurisdictions (the Legislation) that the Filer has ceased to be a reporting issuer in all jurisdictions of Canada in which it is a reporting issuer (the Order Sought).
Under the Process for Cease to be a Reporting Issuer Applications (for a dual application):
a) the Autorité des marchés financiers is the principal regulator for this application,
b) the Filer has provided notice that subsection 4C.5(1) of Regulation 11-102 respecting Passport System (Regulation 11-102) is intended to be relied upon Alberta, British Columbia, Manitoba, New Brunswick, Newfoundland and Labrador, Northwest Territories, Nova Scotia, Nunavut, Prince Edward Island, Saskatchewan and Yukon, and
c) this order is the order of the principal regulator and evidences the decision of the securities regulatory authority or regulator in Ontario.
Terms defined in Regulation 14-101 respecting Definitions, Regulation 11-102 and, in Québec, in Regulation 14-501Q on definitions have the same meaning if used in this order, unless otherwise defined.
This order is based on the following facts represented by the Filer:
1. the Filer is not an OTC reporting issuer under Regulation 51-105 respecting Issuers Quoted in the U.S. Over-the-Counter Markets;
2. the outstanding securities of the Filer, including debt securities, are beneficially owned, directly or indirectly, by fewer than 15 securityholders in each of the jurisdictions of Canada and fewer than 51 securityholders in total worldwide;
3. no securities of the Filer, including debt securities, are traded in Canada or another country on a marketplace as defined in Regulation 21-101 respecting Marketplace Operation or any other facility for bringing together buyers and sellers of securities where trading data is publicly reported;
4. the Filer is applying for an order that the Filer has ceased to be a reporting issuer in all of the jurisdictions of Canada in which it is a reporting issuer; and
5. the Filer is not in default of securities legislation in any jurisdiction.
Each of the Decision Makers is satisfied that the order meets the test set out in the Legislation for the Decision Maker to make the order.
The decision of the Decision Makers under the Legislation is that the Order Sought is granted.
OSC File #: 2026-106
National Policy 11-206 Process for Cease to be a Reporting Issuer Applications -- The issuer ceased to be a reporting issuer under securities legislation.
Securities Act, R.S.O. 1990, c. S.5, as am., s. 1(10)(a)(ii).
Citation: Re Parkland Corporation, 2026 ABASC 47
April 14, 2026
The securities regulatory authority or regulator in each of the Jurisdictions (the Decision Maker) has received an application from the Filer for an order under the securities legislation of the Jurisdictions (the Legislation) that the Filer has ceased to be a reporting issuer in all jurisdictions of Canada in which it is a reporting issuer (the Order Sought).
Under the Process for Cease to be a Reporting Issuer Applications (for a dual application):
(a) the Alberta Securities Commission is the principal regulator for this application;
(b) the Filer has provided notice that subsection 4C.5(1) of Multilateral Instrument 11-102 Passport System (MI 11-102) is intended to be relied upon in British Columbia, Saskatchewan, Manitoba, Québec, New Brunswick, Prince Edward Island, Nova Scotia, Newfoundland and Labrador, Yukon, Northwest Territories, and Nunavut; and
(c) this order is the order of the principal regulator and evidences the decision of the securities regulatory authority or regulator in Ontario.
Terms defined in National Instrument 14-101 Definitions and MI 11-102 have the same meaning if used in this order, unless otherwise defined.
This order is based on the following facts represented by the Filer:
1. the Filer is not an OTC reporting issuer under Multilateral Instrument 51-105 Issuers Quoted in the U.S. Over-the-Counter Markets;
2. the outstanding securities of the Filer, including debt securities, are beneficially owned, directly or indirectly, by fewer than 15 securityholders in each of the jurisdictions of Canada and fewer than 51 securityholders in total worldwide;
3. no securities of the Filer, including debt securities, are traded in Canada or another country on a marketplace as defined in National Instrument 21-101 Marketplace Operation or any other facility for bringing together buyers and sellers of securities where trading data is publicly reported;
4. the Filer is applying for an order that the Filer has ceased to be a reporting issuer in all of the jurisdictions of Canada in which it is a reporting issuer; and
5. the Filer is not in default of securities legislation in any jurisdiction.
Each of the Decision Makers is satisfied that the order meets the test set out in the Legislation for the Decision Maker to make the order.
The decision of the Decision Makers under the Legislation is that the Order Sought is granted.
OSC File #: 2026-145
Burgundy Asset Management Ltd.
Pursuant to National Policy 11-203 Process for Exemptive Relief Applications in Multiple Jurisdictions -- Relief from the prohibition on the use of corporate officer titles by certain registered individuals in respect of institutional clients -- Relief does not extend to interactions by registered individuals with retail clients.
Multilateral Instrument 11-102 Passport System, s. 4.7(1).
National Instrument 31-103 Registration Requirements, Exemptions and Ongoing Registrant Obligations, ss. 13.18(2)(b) and 15.1(2).
April 2, 2026
The principal regulator in the Jurisdiction has received an application from the Filer for a decision under the securities legislation of the Jurisdiction (the Legislation) that pursuant to section 15.1 of National Instrument 31-103 Registration Requirements, Exemptions and Ongoing Registrant Obligations (NI 31-103), the Filer and its Registered Individuals (as defined below) are exempt from the prohibition in paragraph 13.18(2)(b) of NI 31-103 that a registered individual may not use a corporate officer title when interacting with clients, unless the individual has been appointed to that corporate office by their sponsoring firm pursuant to applicable corporate law, in respect of Clients (as defined below) (the Exemption Sought).
Under the Process for Exemptive Relief Applications in Multiple Jurisdictions (for a passport application):
(a) the Ontario Securities Commission is the principal regulator for this application, and
(b) the Filer has provided notice that subsection 4.7(1) of Multilateral Instrument 11-102Passport System (MI 11-102) is intended to be relied upon by the Filer and its Registered Individuals (as defined below) in each of the other provinces and territories of Canada (together with the Jurisdiction, the Jurisdictions) in respect of the Exemption Sought.
Terms defined in MI 11-102 and National Instrument 14-101 Definitions have the same meaning if used in this decision, unless otherwise defined.
Representations
This decision is based on the following facts represented by the Filer:
1. The Filer is a corporation that is governed under the laws of the Province of Ontario.
2. The Filer is registered as an adviser in the category of portfolio manager in each of the Jurisdictions and as an investment fund manager in Newfoundland and Labrador, Ontario, Quebec, and Yukon.
3. The Filer is not in default of securities legislation in any of the Jurisdictions.
4. The Filer is an indirect, wholly-owned subsidiary of Bank of Montreal (BMO). The head office of the Filer is located in Toronto, Ontario.
5. The Filer offers investment advisory services under separately managed accounts to private clients, foundations, endowments, pensions, and family offices, many of which are non-individual "permitted clients" as defined in subsection 1.1 of NI 31-103 or non-individual "institutional clients" as defined in CIRO Rule 1201 and may, in the future, offer such services to other types of institutional clients. The Filer's institutional clients also include the pooled funds and other investment funds for which it acts as portfolio manager.
6. The Filer is the sponsoring firm for registered individuals that interact with non-individual permitted clients and use a corporate officer title without being appointed to the corporate office of the Filer pursuant to applicable corporate law (the Registered Individuals). The number of Registered Individuals may increase or decrease from time to time as the business of the Filer changes. As of the date of this decision, the Filer has approximately 14 Registered Individuals who interact with Institutional Clients (as defined below).
7. The current titles used by the Registered Individuals include the words "Vice President" or "Senior Vice President" and the Registered Individuals may use additional corporate officer titles, such as "Director" or "Managing Director" in the future (collectively, the Titles). The Titles used by the Registered Individuals are consistent with the titles used by the Filer's affiliates and related parties within BMO.
8. The Filer has a process in place for awarding the Titles, which sets out the criteria for each of the Titles. The Titles are based on criteria including seniority and experience, and a Registered Individual's sales activity or revenue generation is not a primary factor in the decision by the Filer to award one of the Titles.
9. The Registered Individuals interact only or primarily with clients that are, each, a non-individual "permitted client", as defined in subsection 1.1 of NI 31-103 or a non-individual "institutional client" as defined in CIRO Rule 1201 (the Institutional Clients).
10. To the extent a Registered Individual interacts with clients that are not Institutional Clients (the Retail Clients), the Filer has policies, procedures and controls in place to ensure that such Registered Individual will only use a Title when interacting with Institutional Clients, and will not use a Title in any interaction with Retail Clients, including in any communications, such as written and verbal communications, that are directed at, or may be received by, Retail Clients.
11. The Filer will not grant any registered individual that interacts primarily with Retail Clients, nor will such registered individual be permitted by the Filer to use, a corporate officer title other than in compliance with paragraph 13.18(2)(b) of NI 31-103.
12. Section 13.18 of NI 31-103 prohibits registered individuals in their client-facing relationships from, among other things, using titles or designations that could reasonably be expected to deceive or mislead existing and prospective clients. Paragraph 13.18(2)(b) of NI 31-103 specifically prohibits the use of corporate officer titles by registered individuals who interact with clients unless the individuals have been appointed to those corporate offices by their sponsoring firms pursuant to applicable corporate law.
13. There would be significant operational and human resources challenges for the Filer to comply with the prohibition in paragraph 13.18(2)(b). In addition, the Titles are widely used and recognized throughout the institutional segment of the financial services industry within Canada and globally, and being unable to use the Titles has the potential to put the Filer and its Registered Individuals at a competitive disadvantage as compared to non-Canadian firms that are not subject to the prohibition and who compete for the same institutional clients.
14. Given their nature and sophistication, the use of the Titles by the Registered Individuals would not be expected to deceive or mislead existing and prospective Institutional Clients.
15. For the reasons provided above, it would not be prejudicial to the public interest to grant the Exemption Sought.
The principal regulator is satisfied that the decision meets the test set out in the Legislation for the principal regulator to make the decision.
The decision of the principal regulator under the Legislation is that the Exemption Sought is granted, provided that, when using the Titles, the Filer and its Registered Individuals interact only with existing and prospective clients that are exclusively non-individual "permitted clients" as defined in NI 31-103 or non-individual "institutional clients" as defined in CIRO Rule 1201.
This decision will terminate six months, or such other transition period as may be provided by law, after the coming into force of any amendment to NI 31-103 or other applicable securities law that affects the ability of the Registered Individuals to use the Titles in the circumstances described in this decision.
Application for time-limited relief from registration and prospectus requirements -- exemption sought to address investor protection concerns in retail context -- relief for crypto-backed lending arrangements -- Relief granted based on the particular facts and circumstances of the application with the objective of fostering innovative businesses in Canada -- in Ontario, derivatives trade reporting rules do not apply due to tie-breaker logic in Ontario's derivatives product determination rule (section 4 -- derivatives that are securities) -- decision should not be viewed as precedent for other filers.
Statute cited
Securities Act, R.S.O. 1990, c. S.5, as am., ss. 1(1), 25(1), 53, and 74.
Instrument, Rule or Policy cited
Multilateral Instrument 11-102 Passport System, s. 4.7.
National Instrument 31-103 Registration Requirements, Exemptions and Ongoing Registrant Obligations.
[Original Text in French]
SEDAR+ filing No: 06412205
April 9, 2026
The Filer wishes to offer a novel product, which will allow individuals and businesses to apply online for loans, including term loans and revolving loans (in Canadian dollars or U.S. dollars), with terms of 3 months to 3 years. Borrowers are required to provide Bitcoin and/or Ether as collateral for these loans. The loans will be made, and the collateral will be held, by the Filer or by one or more wholly owned subsidiaries of the Filer established solely for making loans and holding collateral (each, an SPV, collectively the SPVs).
The collateral will be held by the Filer, directly or through an SPV, for the duration of the loan and will not be rehypothecated by the Filer and/or the SPVs. The Filer will not offer interest-bearing accounts and will not accept deposits to fund the loans it makes.
As set out in Joint Canadian Securities Administrators/Investment Industry Regulatory Organization of Canada Staff Notice 21-329 Guidance for Crypto-Asset Trading Platforms: Compliance with Regulatory Requirements and Canadian Securities Administrators Staff Notice 21-327 Guidance on the Application of Securities Legislation to Entities Facilitating the Trading of Crypto Assets, securities legislation applies to activities involving crypto assets where the user's contractual right to the crypto asset may itself constitute a security and/or a derivative. The Canadian Securities Administrators (CSA) staff take the view that a lender who holds crypto assets as collateral under lending arrangements (Crypto-backed Lending Arrangement) may be engaged in activities to which securities legislation applies on the basis that a borrower's contractual rights relating to the crypto asset collateral and related rights under the borrower's agreement with the lender may be a "security".
To foster innovation and respond to novel circumstances, the CSA has considered granting time-limited relief from the dealer registration requirement and the prospectus requirement that would allow the Filer to operate with a regulated framework. The overall goal of the relief is to facilitate innovation in the Canadian capital markets, while upholding the regulatory mandate of promoting investor protection and fair and efficient capital markets.
The Filer wishes to operate the Platform (as defined below) and offer Crypto-backed Lending Arrangements, and is seeking relief from the dealer registration and prospectus requirements in each of the provinces and territories of Canada. This decision (the Decision) has been tailored for the specific facts and circumstances of the Filer, and the securities regulatory authority or regulator in the Jurisdictions will not consider this Decision as constituting a precedent for other filers.
The securities regulatory authority or regulator in the Jurisdictions (the Dual Exemption Decision Makers) have received an application from the Filer (the Dual Application) for a decision under the securities legislation of those jurisdictions (the Legislation) that:
(a) the dealer registration requirement, and
(b) the prospectus requirements
in the Legislation that may otherwise be applicable to a trade in or a distribution of a Crypto-backed Lending Arrangement made by either:
(a) the Filer or an SPV to a Client (as defined below), or
(b) a Client to the Filer or an SPV,
shall not apply to the Filer, its SPVs, or its Clients, as the case may be (the Requested Relief), subject to the terms and conditions below.
Under the Process for Exemptive Relief Applications in Multiple Jurisdictions:
(a) the Autorité des marchés financiers is the principal regulator for the Dual Application (the Principal Regulator),
(b) the Decision is the decision of the Principal Regulator and evidences the decision of the securities regulatory authority or regulator in Ontario,
(c) the Filer has provided notice that subsection 4.7(1) of Regulation 11-102 respecting Passport System, CQLR, c. V-1.1, r. 1 (Regulation 11-102) is intended to be relied upon in each of the other provinces and territories of Canada (the Non-Principal Jurisdictions, and, together with the Jurisdictions, the Applicable Jurisdictions).
Terms defined in Regulation 14-101 respecting Definitions, CQLR, c. V-1.1, r. 3, Regulation 11-102, Regulation 31-103 respecting Registration Requirements, Exemptions and Ongoing Registrant Obligations, CQLR, c. V-1.1, r. 10 (Regulation 31-103) and Canadian securities legislation have the same meaning if used in this Decision, unless otherwise defined.
For the purposes of this Decision, the following terms have the following meaning:
"Acceptable Third-party Custodian" means an entity that:
a. is one of the following:
i. a Canadian custodian or Canadian financial institution;
ii. a custodian qualified to act as a custodian or sub-custodian for assets held in Canada pursuant to section 6.2 [Entities Qualified to Act as Custodian or Sub-Custodian for Assets Held in Canada] of Regulation 81-102 respecting Investment Funds, CQLR, c. V-1.1, r. 39;
iii. a custodian that meets the definition of an "acceptable securities location" in accordance with the Investment Dealer and Partially Consolidated Rules and Form 1 of CIRO;
iv. a foreign custodian for which the Filer has obtained the prior written consent from the Principal Regulator and any other regulator or securities regulatory authority of the Applicable Jurisdictions; or
v. an entity that does not meet the criteria for a qualified custodian and for which the Filer has obtained the prior written consent from the Principal Regulator and any other regulator or securities regulatory authority of the Applicable Jurisdictions;
b. is functionally independent of the Filer within the meaning of Regulation 31-103;
c. has obtained audited financial statements within the last twelve months, which
i. are audited by a person or company that is authorized to sign an auditor's report under the laws of a jurisdiction of Canada or a foreign jurisdiction and that meets the professional standards of that jurisdiction;
ii. are accompanied by an auditor's report that expresses an unqualified opinion; and
iii. unless otherwise agreed to by the Principal Regulator, discloses on their statement of financial position or in the notes of the audited financial statements the amount of liabilities that it owes to its clients for holding their assets, and the amount of assets held by the custodian to meet its obligations to those custody clients, broken down by asset; and
d. has obtained a Systems and Organization Controls (SOC) 2 Type 1 or SOC 2 Type 2 report within the last twelve months or has obtained a comparable report recognized by a similar accreditation board satisfactory to the Principal Regulator and any other regulator or securities regulatory authority of the Applicable Jurisdictions;
"Act" means the Securities Act, CQLR, c. V-1.1 (Québec);
"BTC" means Bitcoin;
"CIRO" means the Canadian Investment Regulatory Organization;
"Client(s)" means persons and companies that borrow fiat from the Filer and deposit Collateral (as defined below) with the Filer or that borrow fiat through an SPV and deposit Collateral with the SPV;
"Crypto Asset" means an asset commonly considered a crypto asset, digital or virtual currency, or digital or virtual token.
"CTP" means Crypto Asset trading platform;
"ETH" means Ether;
"FINTRAC" means the Financial Transactions and Reports Analysis Centre of Canada;
"LTV" means the percentage of the Outstanding Principal, together with accrued but unpaid interest and any fees in accordance with the terms of a Loan Agreement, in relation to the market value of the cryptocurrency used as collateral;
"MSB" means money services business;
"Outstanding Principal" means, at any time, (i) for a term loan, the principal amount outstanding under the term loan, and (ii) for a revolving loan, the aggregate principal amount outstanding under all advances.
"Regulation 21-101" means Regulation 21-101 respecting Marketplace Operation, CQLR, c. V-1.1, r. 5;
"Regulation 45-106" means Regulation 45-106 respecting Prospectus Exemptions, CQLR, c. V-1.1, r. 21;
"Registered CTP" means a CTP that is registered as a restricted dealer or an investment dealer under securities legislation in Canada; and
"Securities Act (Ontario)" means the Securities Act, R.S.O. 1990, c. S.5 (Ontario).
In this Decision, a person or company is an affiliate of another person or company if:
(a) one of them is, directly or indirectly, a subsidiary of the other, or
(b) each of them is controlled, directly or indirectly, by the same person.
This Decision is based on the following facts represented by the Filer:
The Filer
1. The Filer is a corporation incorporated under the federal laws of Canada with its principal office in Montreal, Quebec.
2. The Filer is a wholly owned subsidiary of Shake Labs Inc., a corporation incorporated under the federal laws of Canada.
3. The Filer's affiliate, Shakepay Inc. (SPI), is a corporation incorporated under the federal laws of Canada. SPI is registered as a dealer in the category of investment dealer with the Applicable Jurisdictions and is a member of CIRO, and it is also registered with FINTRAC as an MSB, dealing in virtual currencies and money transmitting.
4. The Filer is registered as an MSB with FINTRAC under regulations made under the Proceeds of Crime (Money Laundering) and Terrorist Financing Act, S.C. 2000, c. 17 (Canada) (the PCMLTF). Each SPV (as explained below) will be registered in accordance with the requirements of the PCMLTF.
5. The Filer does not have any securities listed or quoted on an exchange or marketplace in any jurisdiction inside or outside of Canada and the Filer is not a reporting issuer in any jurisdiction.
6. The Filer's personnel consists, and will consist, of software engineers, compliance professionals, client support representatives and finance professionals who each have experience operating in a regulated financial services environment and expertise in blockchain technology. All of the Filer's personnel have passed, and new personnel will have passed, criminal records and credit checks.
7. The Filer is not in default of securities and derivatives legislation in any jurisdiction of Canada.
The Filer's Business
8. The Filer operates a proprietary and semi-automated internet-based Crypto Asset-backed lending platform (the Platform), enabling Clients to borrow from the Filer (directly or through an SPV) Canadian or U.S. fiat currency, by depositing and pledging BTC, ETH or any other Crypto Asset agreed to by the Principal Regulator to and with the Filer (directly or through an SPV) as collateral for the borrowing (the Lending Services).
9. The Lending Services are offered exclusively through the Shakepay platform operated by SPI. In order to access the Platform and apply for a loan, Clients must open an account with SPI and accept and comply with SPI's terms and conditions.
10. The Filer, together with its affiliates, has established controls and disclosure practices designed to ensure that Clients clearly understand which entity is providing each service and do not form the misperception that Shakepay Inc. is offering margin or leverage. Clients are informed through consistent disclosures across the platform and agreements that Lending Services are distinct, are not margin or leveraged trading products, and are provided exclusively by the Filer.
11. The Filer does not currently intend to accept any Crypto Asset as collateral other than BTC and ETH (collectively, Collateral). Should the Filer decide to accept collateral other than BTC and ETH, it shall not do so without the prior approval of the Principal Regulator.
12. The rights and obligations of the Filer and of each Client involved in a Crypto-backed Lending Arrangement are set out in the loan agreement between the Filer (as lender) and the Client (as borrower) or, where the loan is made through an SPV, in the loan agreement between the SPV (as lender) and the Client (as borrower) (the Loan Agreement). A Client may apply for a loan through the Platform after opening an account with SPI. In connection with entering into a Loan Agreement, the Client establishes a lending relationship with the Filer (or an SPV, as applicable), which includes the creation of a lending account with the Filer or SPV (each, a Lending Account) for the limited purpose of administering the Lending Services. The Loan Agreement is entered into upon (a) the Client depositing Collateral with the Filer or SPV, as the case may be, and (b) the Filer approving the requested loan. By entering into the Loan Agreement, Clients acknowledge and agree that SPI and the Filer may share account and onboarding information for the purposes of providing and administering the Lending Services.
13. The Filer's activities, including the operation of the Platform and providing the Lending Services (directly and through an SPV), may constitute the trading in securities and/or derivatives.
14. The Filer has appointed Kingston Ross Pasnak LLP as its auditors.
15. The Filer will prepare: (a) audited consolidated financial statements no later than the 90th day after the end of its financial year, and (b) interim consolidated financial statements no later than the 30th day after the end of the first, second and third interim period of its financial year.
16. The Filer will not be a member firm of the Canadian Investor Protection Fund (CIPF) and the Collateral custodied with an Acceptable Third-party Custodian and with the Filer (or SPV, as the case may be) will not qualify for CIPF coverage. The Loan Risk Statement (as defined below) will include disclosure that there will be no CIPF coverage for the Collateral.
17. The Filer will wholly own, control and manage each SPV. Other than the Filer, the SPVs, and SPI, no affiliate of the Filer is engaged in activities related to Crypto Assets in Canada.
KYP Obligations and Crypto Assets Restrictions
18. The Filer intends to only allow for borrowing of fiat backed by BTC or ETH, and the Filer believes it has sufficient understanding of BTC and ETH to satisfy the know-your-product (KYP) provisions in Regulation 31-103. The Filer has established and applies policies and procedures in accordance with the relevant provisions in Regulation 31-103 relating to KYP (KYP Policy).
19. The Filer is not engaged, and will not engage, in trades that are part of, or designed to facilitate, the creation, issuance or distribution of Crypto Assets by the developer(s) of the Crypto Asset, its issuer or affiliates or associates of such persons.
20. The Filer monitors ongoing developments related to BTC and ETH that may cause BTC's or ETH's legal status as a security and/or derivative or the assessment conducted by the Filer pursuant to its KYP Policy and as described in its representations made hereinto change.
Account Opening and Risk Disclosure
21. Each Client, who is an individual, must be a resident of Canada, have reached the age of majority in the jurisdiction in which the person is resident, and have the legal capacity to open a securities brokerage account. Each Client of the Platform that is a corporation, partnership or other legal entity must be incorporated or registered under provincial, territorial or federal corporate legislation or under similar provincial, territorial or federal legislation applicable to other types of legal entities where required, and be in good standing. The Platform is currently available only to individuals who are a resident of Canada and corporations or other legal persons that are Canadian-registered. However, the Filer may in the future make the Platform available to individuals who are resident in foreign jurisdictions and corporations and other legal persons that are registered in foreign jurisdictions in accordance with the laws of such foreign jurisdictions, and in that case, those non-Canadian clients would not be required to hold an account with a Canadian financial institution.
22. The Filer collects know-your-client (KYC) information in accordance with the identity verification requirements applicable to reporting entities under the Proceeds of Crime (Money Laundering) and Terrorist Financing Regulations, SOR/2002-184 (PCMLTFR). To avoid duplicative identity checks, the Filer verifies client identity by relying on measures previously taken by SPI, a reporting entity under the PCMLTF, in accordance with the "reliance method" set out in Section 5 of the PCMLTFR. SPI's onboarding process satisfies the applicable guidelines issued by FINTRAC and the requirements of the PCMLTF and the PCMLTFR. Clients must successfully complete SPI's onboarding process, including identity verification, in order to be eligible to open a Lending Account with the Filer. The Filer has established and applies policies and procedures reasonably designed to ensure that its Clients are not engaged in prohibited businesses or business practices.
23. To access the Lending Services, Clients must agree to the terms of the Loan Agreement, which governs the relationship between the Client and the Filer (or the SPV, as the case may be) and sets out the terms and conditions under which the Lending Services are provided.
24. Under the Loan Agreement, the Filer and each SPV maintains certain controls over Lending Accounts to ensure compliance with applicable law and ensure secure custody of the Collateral.
25. The Filer's marketing and advertising on its platform clearly disclose, where appropriate, that loan proceeds may not be used to purchase Crypto Assets.
26. The Filer does not provide recommendations or advice to Clients or conduct a suitability determination for Clients but performs account appropriateness assessments to determine whether it is appropriate for a Client to enter into a Crypto-backed Lending Arrangement with the Filer (whether directly or through an SPV). In conducting this assessment, the Filer may rely on information collected by SPI during its account appropriateness assessment process. The account appropriateness assessment conducted by the Filer considers the following factors (the Loan Account Appropriateness Factors):
a. the Client's experience and knowledge of Crypto Assets;
b. the Client's financial circumstances;
c. the Client's personal circumstances;
d. the Client's risk profile; and
e. the Client's understanding of the risks involved in Crypto-backed Lending Arrangement.
27. The Loan Account Appropriateness Factors will be used by the Filer to evaluate whether entering into a Loan Agreement and pledging Collateral is appropriate for a prospective Client.
28. After completion of the loan account appropriateness assessment, a prospective Client will receive appropriate messaging about entering into a Loan Agreement, which, in circumstances where the Filer has evaluated that doing so is not appropriate for the Client, will include prominent messaging to the Client that this is the case and that the Client will not be permitted to enter into a Loan Agreement.
29. The Filer will also use the Loan Account Appropriateness Factors to determine the LTV to offer the Client.
30. The Filer maintains policies and procedures to monitor the value of the Collateral using a system operated by an Acceptable Third-party Custodian, with a proprietary backup monitoring process running on the Filer's own systems to ensure continuous, real-time valuation based on current market prices. Where a decrease in the value of the Collateral results in LTV rising above 80% or such other percentage as the Filer deems appropriate (the Margin Notice Threshold), the Filer will provide, by way of electronic notice, information on steps the Client may take, which include (i) returning a portion of the Outstanding Principal; or (ii) delivering to the Filer or SPV, as the case may be, additional Collateral to reduce LTV below the Margin Notice Threshold. Where the Client declines to effect either of the two forgoing actions, and should the value of the Collateral continue to decrease to the extent that LTV reaches 90% (or such other percentage as the Filer deems appropriate) (Collateral Liquidation Threshold), the Filer or SPV, as the case may be, may sell up to the entirety of the Collateral to pay the loan amount in which case it shall provide the Client with notice of the same (Collateral Liquidation).
31. The Margin Notice Threshold LTV and the Collateral Liquidation Threshold LTV will not change for a loan once it has been deployed. The Filer may, from time to time, adjust the applicable LTV ratio for new loans, provided that any such adjustment is consistent with prudent risk management practices. In determining the LTV ratio to be offered to Clients, the Filer will consider a range of factors, which the Filer will review periodically to ensure that any adjustments to the LTV ratio remain aligned with sound risk management principles and the protection of clients. These factors include but are not limited to:
a. the volatility and liquidity of the Crypto Asset used as collateral;
b. the historical and implied price correlations between the collateral asset and the loan currency;
c. general market conditions and results of internal stress testing;
d. the Filer's operational and counterparty risk tolerances; and
e. industry practices and peer benchmarks for comparable crypto-backed loan products.
32. As part of the process of entering into a Loan Agreement and establishing a Lending Account with the Filer, the Filer will provide prospective Clients with a separate statement of risks (the Loan Risk Statement) that clearly explains or includes the following in plain language:
a. the purpose of the Loan Agreement;
b. the risks associated with the Collateral held by the Filer and the SPVs;
c. prominently, a statement that no securities regulatory authority or regulator in Canada has assessed or endorsed the Loan Agreement;
d. the location and the manner in which Collateral is held for the Client, the risks and benefits to the Client of the Collateral being held in that location and in that manner, including the impact of insolvency of the Filer, the SPVs or the Acceptable Third-party Custodian;
e. the manner in which the Collateral is accessible by the Filer, and the risks and benefits to the Client arising from the Filer having access to the Collateral in that manner;
f. that the Filer is not a member of CIPF and the Collateral held by the Filer and the SPVs (directly or indirectly through third parties) will not qualify for CIPF protection;
g. a statement that the statutory rights in sections 217 and 221 of the Act, and section 130.1 of the Securities Act (Ontario) and, if applicable, similar statutory rights under securities legislation of Non-Principal Jurisdictions, do not apply in respect of the Loan Risk Statement to the extent a security is distributed under the prospectus relief granted by this Decision;
h. a statement that the Filer and the SPVs are not registered as a dealer in any jurisdiction in Canada; and
i. the date on which the information was last updated.
33. As part of the Lending Account opening process, the Filer will deliver the Loan Risk Statement to the Client and obtain an electronic acknowledgment from the prospective Client confirming that the prospective Client has received, read and understood the Loan Risk Statement. Such acknowledgment will be prominent and delivered concurrently with the opening of a Lending Account and prior to execution of the Client's initial Loan Agreement.
34. A copy of the Loan Risk Statement acknowledged by a Client will be electronically delivered to the Client and easily available to the Client upon request. The latest version of the Loan Risk Statement will be continuously and easily available to Clients on the Filer's website and upon request.
35. The Filer has policies and procedures for updating the Loan Risk Statement to reflect any material changes to the disclosure or include any material risks that may develop with respect to the Loan Agreements, Lending Accounts, the Filer and the Crypto Assets. In such event, existing Clients of the Filer will be promptly notified through an email notification and provided with a copy of the updated Loan Risk Statement.
36. The Filer may also prepare and make available to its Clients, on an ongoing basis and in response to emerging issues in Crypto Assets, educational materials and other informational updates about Crypto-backed Lending Arrangements.
Filer Operations
37. The Filer and the SPVs do not have any authority to act on a discretionary basis on behalf of Clients and does not manage any discretionary accounts.
38. Loan applications are placed with the Filer through the Platform.
39. A Loan Agreement is a bilateral contract between the Client and the Filer or between the Client and the SPV. The Filer (or SPV, as the case may be) is the lender and the Client is the borrower.
40. Clients effecting interest payments and payments of Outstanding Principal to the Filer or SPV, as the case may be, through the Platform can send funds via wire transfer, e-transfer, electronic funds transfer, direct deposit or other established and widely utilized payment methods.
41. Clients pledge their Collateral to unique wallet addresses designated to them either by the Filer or the Acceptable Third-party Custodian, who may be the custodian to the Filer, an SPV and the Client.
42. The Filer may effect the transfer of Collateral (i.e., a Collateral Liquidation) to the Filer (or SPV, as the case may be) only pursuant to the terms of the Loan Agreement (i.e., an event of default on the part of the Client such as a failure to make a required payment when due, or a decrease in the value of the Collateral resulting in an LTV equal to or greater than the Collateral Liquidation Threshold stipulated in each Client's Loan Agreement).
43. The Filer evaluates and will continue to evaluate the fair market value of the Collateral for purposes of determining LTV on a near-continuous basis, in accordance with the terms of the Loan Agreement. The Filer's Clients can check the quoted price for BTC and ETH on the Platform against the prices available on SPI or other Registered CTPs in Canada.
44. The Filer and each SPV are not permitted to pledge, re-hypothecate or otherwise use the Collateral deposited by its Clients on the Platform, except as described in representation 42 above.
45. The Filer does not currently stake ETH but may, in the future, explore the possibility of staking Collateral ETH, subject to discussions with the Principal Regulator.
46. The Filer and each SPV record in their books and records the particulars of each loan, including the Collateral.
47. The Filer is compensated by interest charges on its loans and will not charge any fees, other than a liquidation processing fee, without first notifying the Principal Regulator. Any fees the Filer may charge Clients will not change for any particular loan once the loan has been deployed. All fees will be clearly and prominently disclosed in the disclosure table contained in the Loan Agreement.
48. Clients are permitted to transfer Collateral into their Lending Account with the Filer at any time for the purpose of decreasing LTV.
49. Clients may be permitted to request a withdrawal of pledged Collateral in their Lending Account with the Filer, and the Filer may permit such withdrawal where the withdrawal would not result in the LTV exceeding the LTV at the time of loan origination.
50. Clients may be permitted to request an increase to their loan amount under the same terms as their original loan and the Filer may permit such increase where the increase in loan amount would not result in the LTV exceeding the LTV at the time of loan origination.
51. A loan can be repaid, either wholly or in part, by a Client and, where applicable, where fully paid, may be closed at any time during the term of the loan. There will be no prepayment penalty applied to any loan. However, loans will provide that a borrower will be charged a minimum interest amount (e.g., a Loan Agreement may provide for a minimum of three months' interest).
52. Upon repayment of the Outstanding Principal, together with accrued but unpaid interest and any fees in accordance with the terms of each Loan Agreement, the Filer will transfer all Collateral to the Client's account with SPI. The Filer has expertise in and has implemented appropriate anti-fraud and anti-money laundering monitoring systems for both fiat and Crypto Assets to reduce the likelihood of fraud, money laundering, or error in sending or receiving Crypto Assets to incorrect wallet addresses.
53. The Filer maintains and will continue to maintain comprehensive business continuity and disaster recovery plans to ensure the resilience and continuity of its Lending Services. These plans include measures to address potential disruptions to the Filer's critical systems, processes, and services supporting the Lending Services, including its reliance on the Platform. The Filer regularly reviews and updates these plans to address evolving risks and industry standards and ensures that appropriate testing is conducted to validate their effectiveness.
Reports to Clients
54. On a continuous basis, except during rare moments where the Platform is not available to allow for systems maintenance, Clients will (i) be able to access 24/7 the Outstanding Principal and accrued interest, the current fair market value of pledged Collateral and the cumulative amounts of interest and principal payments made to date with respect to any loan transaction and (ii) have access to a complete record of all historic lending activities and details since creating a Lending Account.
Custody of Crypto Assets
55. The Filer utilizes Coinbase Custody Trust Company (Custodian) as custodian to hold (in cold storage) Client Collateral. Such Custodian meets all the requirements of an Acceptable Third-party Custodian. The Filer may use other custodians in the future, provided they also meet the requirements of an Acceptable Third-party Custodian. The Filer utilizes Fireblocks Ltd. and BitGo Trust Company Inc. for hot transactional wallets.
56. The Filer and each SPV will hold custody accounts with the Custodian for the purpose of safely custodying Clients' Collateral. The Collateral that the Custodian holds in trust for the Clients of the Filer are held in designated and segregated accounts in trust in the name of the Filer (or SPV, as the case may be) for the benefit of the Filer's Clients and are held separate and apart from the assets of the Filer, the SPV and its Custodian, and the assets of other clients of the Custodian.
57. Client Collateral, held in trust for their benefit in hot wallets and with the Custodian, is deemed to be the Clients' Crypto Assets in case of the insolvency and/or bankruptcy of the Filer, of an SPV or of the Custodian.
58. The Custodian has established policies and procedures that manage and mitigate the risks of holding the Collateral, including, but not limited to, an effective system of controls and supervision to safeguard the Collateral for which it acts as custodian and to mitigate security breaches and cyber incidents. The Filer has and will conduct due diligence on the Custodian, including a thorough review of the Custodian's policies and procedures.
59. The Filer has established, and will maintain and apply, policies and procedures that are reasonably designed to ensure the Custodian's records related to Collateral that the Custodian holds in trust for Clients of the Filer (whether directly or through an SPV) are accurate and complete. For Crypto Assets held by the Filer and by the SPVs, whether directly in hot wallets or indirectly through the Custodian, the Filer:
a. holds Collateral or ensures that the Collateral is held in trust for its Clients, separate and distinct from the assets of the Filer and the SPV; and
b. has established and applies written policies and procedures that manage and mitigate the custodial risk, including, but not limited to, an effective system of controls and supervision to safeguard the Collateral for which it acts as custodian and to mitigate security breaches and cyber incidents.
60. In an effort to spread counterparty risk, the Filer may engage other custodians and hot wallet providers to hold Collateral from time to time. In respect of cold storage of Collateral, the Filer intends to engage only with custodians that meet the definition and requirements of an Acceptable Third-party Custodian. Prior to depositing Collateral with any such custodian, the Filer performs reasonable due diligence on the custodian, including a review of the custodian's balance sheet and management team, including holding meetings with the custodian's representatives. The Filer will inquire as to security protocols as well as withdrawal protocols and the insurance coverage applicable to the Crypto Assets held. Prior to engaging a new custodian or hot wallet provider, the Filer will obtain from such custodian a SOC 2 Type 1 or Type 2 report prepared within the last 12 months. Lastly, the Filer will provide the Principal Regulator with at least 30 days' prior written notice of its intention to add or remove any custodian or hot wallet provider.
Marketplace and Clearing Agency
61. The Filer does not and will not operate a "marketplace" as defined in Regulation 21-101 and, in Ontario, subsection 1(1) of the Securities Act (Ontario), because it will not:
a. perform the activities commonly understood to be acting as an exchange or quotation and trading reporting system,
b. execute trades of exchange-traded securities outside of a marketplace, or
c. constitute, maintain or provide a market or facility for bringing together buyers and sellers of securities (or Crypto Assets), bring together the orders for securities (or Crypto Assets) of multiple buyers and sellers, and use established, non-discretionary methods under which the orders interact with each other, and the buyers and sellers entering the orders agree to the terms of a trade.
62. The Filer will not operate a "clearing agency" as defined in the securities legislation in any of the Applicable Jurisdictions.
Market Participant and Equivalent
63. The Filer is a "market participant" as defined under subsection 1(1) of the Securities Act (Ontario). As a market participant, among other requirements, the Filer is required to comply with the record keeping and provision of information provisions under section 19 of the Securities Act (Ontario), which include the requirement to keep such books, records and other documents as are necessary for the proper recording of business transactions and financial affairs, and the transactions executed on behalf of others, and to deliver such records to the securities regulatory authority or regulator in Ontario, if required. While there is no direct equivalent under the Act, the Filer agrees to be bound by equivalent obligations in Quebec and undertakes to provide the same records to the Principal Regulator, if required.
Finances
64. By virtue of holding Collateral in accordance with applicable LTV ratios and effecting liquidations at or above applicable Collateral Liquidation Thresholds, the Filer will maintain sufficient resources to guarantee its obligations under Crypto-backed Lending Arrangements (whether made directly or through an SPV).
Lending Regulation
65. Neither the Filer nor, where applicable, the SPV shall commence or conduct lending activities in any province of Canada where such activities require licensing, registration or similar regulatory approvals or notifications from or to a provincial regulatory body, until such time as the Filer or the SPV, or both, as required, has obtained such licensing, registration, approvals or notifications, and the Filer and each SPV is otherwise in compliance with laws applicable to such activities in such province.
Personal Property Security Legislation
66. In connection with the Crypto-backed Lending Arrangements, the Filer has considered the availability of the prospectus exemption at section 2.37 of Regulation 45-106 and determined that, at the time of this Decision, the exemption may not be available due to the attributes of the Collateral and the nature of the Filer's business.
Each of the Dual Exemption Decision Makers is satisfied that the Decision satisfies the test set out in the Legislation for the Dual Exemption Decision Makers to make the Decision.
The Decision of the Dual Exemption Decision Makers under the Legislation is that the Requested Relief is granted, provided that:
Acting fairly, honestly and in good faith
A. The Filer will act and will take reasonable steps to cause each individual acting on its behalf to act, fairly, honestly and in good faith with Clients.
Conflicts of interest
B. The Filer will comply, and will take reasonable steps to cause each individual acting on their behalf to act to comply, with the enhanced conflicts of interest provisions in section 13.4 and 13.4.1 of Regulation 31-103 as if the Filer were a "registered firm" and individuals acting on behalf of the Filer were "registered individuals".
KYC and Loan Account Appropriateness
C. The Filer will take reasonable steps to ensure that the information obtained pursuant to representation 22, which is collected and maintained by its affiliate, SPI, remains current. The Filer has and will keep an arrangement in place with SPI to be notified of any material updates to such information.
D. For each Client, the Filer will perform a loan account appropriateness assessment as set out in representation 26 prior to opening a Lending Account and on an ongoing basis at least annually.
Handling complaints
E. The Filer will document, and, in a manner that a reasonable person would consider fair and effective, promptly respond to each complaint made to the Filer about the Lending Services offered by the Filer or an individual acting on behalf of the Filer.
Permitted referral arrangements
F. The Filer may advertise its services with SPI provided such referral activities with SPI are limited to fixed fee advertising only. The Filer will not engage in promotional or advertising activities with any CTP other than SPI.
G. The Filer will not enter into any agreement or arrangement with SPI or any other CTP that would permit a Client to obtain margin, leverage, or credit in contravention of restrictions applicable to the CTP. The Filer and SPI will maintain controls to ensure Clients cannot use services of both entities to create or replicate a leveraged position.
No recommendations or advice
H. The Filer, and any individual acting on its behalf, will not provide recommendations or advice to any Client or prospective client.
Operations
I. The Filer will only provide Lending Services in relation to Crypto Assets and will provide the Lending Services directly or through an SPV. Other than the Lending Services, as applicable, the Filer will not offer derivatives based on the Crypto Assets to Clients. The Filer will seek the appropriate approvals from the Principal Regulator and, if required under the securities legislation, the regulator or securities regulatory authority of any other Applicable Jurisdiction, prior to undertaking any other activity governed by securities legislation in Canada.
J. The Filer will wholly own, control and manage each SPV that enters into a Loan Agreement with Clients and holds the Collateral through an Acceptable Third-party Custodian, subject to the conditions of the Decision.
K. The Filer will ensure that each SPV only (i) enters into financing agreements with institutional investors, (ii) enters into Loan Agreements with Clients, and (iii) holds the Collateral, and engages in no other activities.
L. The Filer will not operate a "marketplace" as the term is defined in Regulation 21-101 and, in Ontario, in subsection 1(1) of the Securities Act (Ontario) or a "clearing agency" as the term is defined in the securities legislation in any of the Applicable Jurisdictions.
M. The Filer will only accept BTC and ETH as Collateral, unless it obtains the prior written consent of the Principal Regulator.
N. Neither the Filer nor any SPV will commence or conduct lending activities in any province of Canada where such activities require licensing, registration or similar regulatory approvals or notifications from or to a provincial regulatory body, until such time as the Filer or the SPV, or both, as applicable, has obtained such licensing, registration, approvals or notifications, and the Filer and each SPV is otherwise in compliance with laws applicable to such activities in such province.
O. The Filer will implement appropriate margin and risk controls designed to ensure that the operation of the Lending Account does not enable or facilitate leveraged trading activity through the Client's account with SPI. In particular, Clients will be prohibited from using loan proceeds to purchase crypto assets, and this restriction will be clearly disclosed in the Loan Agreement and prominently within the Platform interface. The Filer will also implement monitoring controls, including periodic sampling of Client accounts and transaction activity, to assess compliance with this restriction. These measures are intended to ensure that the Lending Services do not function as margin or leverage and to support appropriate oversight of Client activity.
Custody
P. At all times, the Filer and its SPVs will hold at least 95% of the total value of Clients' Collateral with a custodian that meets the definition of an "Acceptable Third-party Custodian" for all loans where the LTV is below the Margin Notice Threshold.
Q. The Filer and SPV may, upon a loan's LTV being above the Margin Notice Threshold and no additional Collateral being added by the Client or a portion of the loan being paid back by the Client, transfer to and hold the Collateral in its hot wallets in preparation for liquidation.
R. Before the Filer and SPVs hold Clients' Collateral with a custodian referred to in condition P, the Filer will take reasonable steps to verify that the custodian:
i. has established and applies written policies and procedures that manage and mitigate the custodial risks, including, but not limited to, an effective system of controls and supervision to safeguard the Collateral for which it acts as custodian;
ii. will hold the Collateral for its Clients (i) separate and apart from the assets of non-Canadian clients, and (ii) separate and apart from its own assets, from the assets of an SPV, and from the assets of any custodial service provider;
iii. has appropriate insurance to cover the loss of Collateral held at the custodian;
iv. meets each of the requirements to be an Acceptable Third-party Custodian, except for those criteria in respect of which the custodian does not meet and the Principal Regulator and the regulator or securities regulatory authority of the other Applicable Jurisdictions have provided prior written approval for use of the custodian.
S. The Filer will provide the Principal Regulator with at least 30 days' prior written notice of any:
i. changes of or use of a custodian or hot wallet provider; and
ii. material changes to the Filer's ownership, business operations, including its systems, or its business model.
T. The Filer will notify the Principal Regulator, promptly, of any material breach or failure of a custodian's system of controls or supervision, and what steps have been taken by the Filer or its custodian, as the case may be, to address each such breach or failure. The loss of any amount of a Crypto Assets will be considered a material breach or failure.
U. The Filer will promptly notify the Principal Regulator if the U.S. Securities and Exchange Commission, the U.S. Commodity Futures Trading Commission, the Financial Industry Regulatory Authority, the National Futures Association, the South Dakota Division of Banking, the Office of the Comptroller of the Currency or the New York State Department of Financial Services or any other regulatory authority applicable to a custodian of the Filer or of an SPV, makes a determination that (i) a custodian is not permitted by that regulatory authority to hold client Crypto Assets, or (ii) if there is a change in the status of the custodian as a regulated financial institution. In such a case, the Filer will identify a suitable alternative custody provider that meets the definition of an Acceptable Third-party Custodian to hold the Collateral.
V. For Collateral held by the Filer and SPVs, the Filer and the SPVs, as applicable:
i. will hold the Collateral in trust for the benefit of its Clients, and separate and distinct from the assets of the Filer and the SPVs;
ii. will ensure there is appropriate insurance to cover the loss of Collateral held by the Filer and SPVs;
iii. will have established and apply written policies and procedures that manage and mitigate the custodial risks, including, but not limited to, an effective system of controls and supervision to safeguard the Collateral for which it acts as custodian.
Risk Disclosure
W. As part of the loan application process, the Filer will deliver to the Client a Loan Risk Statement and will require the Client to provide electronic acknowledgment of having received, read and understood the Loan Risk Statement.
X. The Loan Risk Statement delivered in condition W and to Clients will be prominent and separate from other disclosures given to the Client at the time the Loan Risk Statement is delivered, and the acknowledgement will be separate from other acknowledgements by the Client at that time.
Y. A copy of the Loan Risk Statement acknowledged by a Client will be electronically delivered to the Client and easily available to the Client upon request. The latest version of the Loan Risk Statement will be continuously and easily available to Clients on the Filer's website and upon request.
Z. The Filer will promptly update the Loan Risk Statement to reflect any material changes to the disclosure or include any material risks that may develop with respect to the Loan Agreement or the Crypto Assets and in such event, it will promptly notify each existing Client, through an email notification of the update and deliver to them a copy and a link to the updated Loan Risk Statement,.
AA. Prior to the Filer making an updated Loan Risk Statement available to Clients, the Filer will deliver, or will have previously delivered, a copy of the Loan Risk Statement and a blackline of the changes to the Principal Regulator.
Finances
BB. The Filer will maintain sufficient financial resources for the operations of the Platform, the SPVs and the Crypto-backed Lending Arrangements and in furtherance of its compliance with this Decision.
CC. The Filer has and will continue to confirm that it is not and each of the SPVs is not liable for the debt of an affiliate that could have a material negative effect on the Filer and SPVs.
Reporting
DD. The Filer will notify the Principal Regulator immediately upon becoming aware that the Filer does not or may not have sufficient financial resources in accordance with the requirements of condition BB.
EE. The Filer will provide: (a) audited consolidated financial statements no later than the 90th day after the end of its financial year, and (b) interim consolidated financial statements no later than the 30th day after the end of the first, second and third interim period of its financial year, to the Principal Regulator in a manner specified by the Principal Regulator.
FF. The Filer will deliver the reporting as set out in Appendix A.
GG. In addition to any other reporting required by the Legislation, the Filer will provide, on a timely basis, any report, data, document or information to the Principal Regulator, including any information about the SPVs and about the Filer's custodians and the Crypto Assets held by the custodians, that may be requested by the Principal Regulator from time to time as reasonably necessary for the purpose of monitoring compliance with the Legislation and the conditions in the Decision, in a format and manner acceptable to the Principal Regulator.
HH. Upon request, the Filer will provide the Principal Regulator with aggregated and/or anonymized data concerning Client demographics and activity on the Platform that may be useful to advance the development of a Canadian regulatory framework for Crypto Asset-backed Lending Arrangements.
II. The Filer will provide the Principal Regulator at least 30 days' written notice to the Principal Regulator if an affiliate of the Filer proposes to offer products or services related to Crypto Assets in Canada or to Canadian residents.
JJ. The Filer will promptly make any changes to its business practices or policies and procedures that may be required to address investor protection concerns that may be identified by the Filer or by the Principal Regulator arising from the operation of the Platform.
Other
KK. In jurisdictions where the prospectus relief granted by this Decision is required, the first trade of a Crypto-backed Lending Arrangement is deemed to be a distribution under the securities legislation in any of the Applicable Jurisdictions.
LL. The Filer remains in compliance with requirements of the PCMLTF and FINTRAC or any comparable legislation that applies to the Filer.
Term of relief
MM. This Decision will expire three years from the date of this Decision.
NN. The Decision may be amended by the Principal Regulator from time to time upon prior written notice to the Filer.
Commencing with the quarter ending [September 30, 2025], the Filer will deliver the following information to the Principal Regulator in a form and manner specified by the Principal Regulator, with respect to Clients residing in each Applicable Jurisdiction, within 30 days of the end of each March, June, September and December:
(a) aggregate reporting of activity conducted pursuant to the Platform's operations that will include the following:
(i) number of Lending Accounts opened each month in the quarter;
(ii) number of Lending Accounts closed each month in the quarter;
(iii) number of Lending Account applications rejected by the Platform each month in the quarter based on the Loan Account Appropriateness Factors;
(iv) number of loans made each month in the quarter;
(v) average value of the loans in each month in the quarter;
(vi) number of loans where the borrowers failed to make the required interest payment for the month;
(vii) number of loans that exceeded the Margin Notice Threshold in each month in the quarter;
(viii) average value of loans that exceeded the Margin Notice Threshold in each month in the quarter;
(ix) number of loans that exceeded the Collateral Liquidation Threshold in each month in the quarter;
(x) average value of loans that exceeded the Collateral Liquidation Threshold in each month in the quarter;
(xi) number of Collateral Liquidations in the month;
(xii) average value of loans that the Filer effected Collateral Liquidations;
(xiii) number of formal warnings made each month in the quarter by the Filer to Clients for prohibited use of loan proceeds to purchase Crypto Assets;
(xiv) number of Lending Accounts at the end of each month in the quarter; and
(xv) number of Lending Accounts with no loans during the quarter,
(b) the details of any Client complaints received by the Filer during the calendar quarter and how such complaints were addressed;
(c) a listing of all blockchain addresses, except for deposit addresses, that hold Crypto Assets on behalf of clients, including all hot and cold wallets;
(d) the details of any fraudulent activity or cybersecurity incidents on the Platform during the calendar quarter, any resulting harms and effects on Clients, and the corrective measures taken by the Filer to remediate such activity or incident and prevent similar activities or incidents from occurring in the future; and
(e) the details of the Client loan default, by number of Clients and aggregates loan default amounts, during the quarter.
Manulife Investment Management Limited et al.
National Policy 11-203 Process for Exemptive Relief Applications in Multiple Jurisdictions -- Relief from multi-tier restriction in paragraph 2.5(2)(b) of NI 81-102 to permit three-tier structures where proposed and future top funds invest in an corresponding exchange traded mutual fund that are subject to NI 81-102 and under common management, which may each in turn invest more than 10% of NAV in securities of one or more other mutual funds that are subject to NI 81-102 and that are under common management or managed by unaffiliated managers, each top, middle and third tier fund may also be an alternative mutual fund -- Relief subject to conditions.
National Instrument 81-102 Investment Funds, ss. 2.5(2)(b) and 19.1.
April 9, 2026
The principal regulator in the Jurisdiction has received an application from the Filer for a decision under the securities legislation of the Jurisdiction of the principal regulator (the Legislation) pursuant to section 19.1 of National Instrument 81-102 Investment Funds (NI 81-102) exempting each Wrap Fund from clause 2.5(2)(b) of NI 81-102 to permit a Wrap Fund to purchase and hold, directly or indirectly, securities of a corresponding Middle Fund (as defined herein), which Middle Funds will hold, directly or indirectly, more than 10% of their net asset value in securities of one or more other investment funds, including exchange-traded funds and alternative mutual funds (each a Third Tier Fund) (the Exemption Sought).
Under National Policy 11-203 -- Process for Exemptive Relief Applications in Multiple Jurisdictions:
(a) the Ontario Securities Commission is the principal regulator for this application; and
(b) the Filer has provided notice that section 4.7(1) of Multilateral Instrument 11-102 -- Passport System (MI 11-102) is intended to be relied upon in British Columbia, Alberta, Saskatchewan, Manitoba, Québec, New Brunswick, Newfoundland and Labrador, Nova Scotia, Prince Edward Island, Northwest Territories, Nunavut and Yukon (together with Ontario, the Jurisdictions).
Terms defined in National Instrument 14-101 -- Definitions, NI 81-102 or in MI 11-102 have the same meaning if used in this decision, unless otherwise defined herein. In addition, capitalized terms used in this Decision have the following meanings:
Clone Fund Exception means the exception in clause 2.5(4)(a) of NI 81-102 that would permit a Three-Tier structure if a Middle Fund was a "clone fund", as defined in NI 81-102.
Funds means, together, the Wrap Funds and the Middle Funds.
Future Middle Funds has the meaning ascribed to such term in paragraph 8.
IPU Exception means the exception in clause 2.5(4)(b) of NI 81-102 that would permit a Three-Tier structure if a Middle Fund purchased or held securities that are index participation units (as defined in NI 81-102) issued by an investment fund.
Middle Funds means, together, the Proposed Middle Funds and the Future Middle Funds.
NI 81-106 means National Instrument 81-106 Investment Fund Continuous Disclosure.
Policies means the Large securityholders policy and the Fund expenses allocation policy, as applicable, of the Filer each dated as of December 17, 2025, as the same may be amended, restated or replaced from time to time.
Proposed Middle Funds means Manulife Balanced ETF Portfolio, Manulife Conservative ETF Portfolio and Manulife Growth ETF Portfolio.
Three-Tier Structure refers to the structure where a Wrap Fund purchases and holds securities of a Middle Fund and such Middle Fund, in turn, holds, or will hold, more than 10% of its net asset value in securities of one or more Third Tier Funds.
The decision is based on the following facts represented by the Filer:
The Filer and the Funds
1. The Filer is a corporation amalgamated under the laws of Canada, with its registered head office located in Toronto, Ontario.
2. The Filer is currently registered as: (i) a commodity trading manager in Ontario; (ii) a portfolio manager in each province and territory of Canada; (iii) a derivatives portfolio manager in Québec; and (iv) an investment fund manager in each of Ontario, Québec, and Newfoundland and Labrador.
3. The Filer, or an affiliate, will be the investment fund manager of the Funds and the Filer, or an affiliate, will be the portfolio manager of the Funds.
4. The Filer is not in default of securities legislation in any of the Jurisdictions.
5. Each Fund will be an open-ended mutual fund, organized and governed by the laws of a Jurisdiction or the laws of Canada. Each Middle Fund will also be an exchange traded mutual fund.
6. Each Fund will be governed by the provisions of NI 81-102, subject to any exemption therefrom that has been, or may be, granted by the securities regulatory authorities.
7. Each Proposed Wrap Fund will seek to achieve its investment objective by investing primarily in a corresponding Middle Fund.
8. The Filer may, in the future, create additional open-ended mutual funds, organized and governed by the laws of a Jurisdiction or the laws of Canada and governed by NI 81-102 and which may be conventional mutual funds or alternative mutual funds (the Future Wrap Funds). Like the Proposed Wrap Funds, the Future Wrap Funds will seek to achieve their investment objective by investing in a corresponding exchange traded mutual fund organized and governed by the laws of a Jurisdiction or the laws of Canada and governed by NI 81-102 (the Future Middle Funds).
9. Each Middle Fund may invest in, among other things, one or more Third Tier Funds. A Middle Fund may hold, directly or indirectly, more than 10% of its net asset value in securities of such Third Tier Funds.
10. The Proposed Wrap Funds are conventional mutual funds.
11. Future Wrap Funds and Future Middle Funds may be conventional mutual funds or alternative mutual funds.
12. Where a Middle Fund holds, directly or indirectly, more than 10% of its net asset value in securities of a Third Tier Fund that is an alternative mutual fund, such Middle Fund will also be an alternative mutual fund (an Alternative Middle Fund). A Wrap Fund that invests in a corresponding Alternative Middle Fund will also be an alternative mutual fund.
The Third Tier Funds
13. Other than as described in paragraph 14, it is anticipated that each Third Tier Fund will be exchange traded investment funds managed by the Filer or an affiliate (Affiliated Third Tier Funds). A Third Tier Fund may also be an alternative mutual fund.
14. A Middle Fund may, however, invest in exchange traded funds managed by unaffiliated investment managers (an Unaffiliated Third Tier Fund) if there are no suitable investment opportunities in affiliated investment funds.
15. Each Affiliated Third Tier Fund and Unaffiliated Third Tier Fund will be: (i) an investment fund subject to NI 81-102; (ii) an investment fund whose securities qualify as "index participation units" within the meaning of NI 81-102 (IPUs); or (iii) invested in by a Middle Fund pursuant to exemptive relief.
16. Each Third Tier Fund primarily invests, or will primarily invest, directly in a portfolio of securities and/or other assets.
17. No Third Tier Fund will invest more than 10% of its net asset value in securities of other investment funds, other than securities: (i) of a money market fund; or (ii) that are index participation units issued by an investment fund.
Three-Tier Structure
18. In the Three-Tier Structure, each Wrap Fund will seek to achieve its investment objective by investing primarily in a corresponding Middle Fund. Other investments may include cash and cash equivalents. It is not expected that a Wrap Fund will hold directly any other portfolio securities. Each Wrap Fund is intended to provide a similar risk/return profile as its corresponding Middle Fund.
19. Each Wrap Fund is intended to offer an alternative distribution channel for its corresponding Middle Fund (ie as a conventional mutual fund distributed via Fundserv, as opposed to an exchange traded mutual fund whose securities are sold on an exchange). Functionally, each Wrap Fund will be a clone of its corresponding Middle Fund -- although a Wrap Fund may not technically meet the "clone fund" definition as set out in NI 81-102. More specifically, each Wrap Fund will seek to offer a similar return as its corresponding Middle Fund and the name of each Wrap Fund will be tied to its corresponding Middle Fund.
20. As noted, a Middle Fund will hold, directly or indirectly, more than 10% of its net asset value in securities of Third Tier Funds. As the Middle Funds are not "clone funds", nor are all the securities of all Third Tier Funds anticipated to be IPUs, with respect to certain investments in Affiliated Third Tier Funds, some investments stemming from the Third Tier Structure are contrary to the multi-layering restriction in clause 2.5(2)(b) of NI 81-102 and do not fit within the Clone Fund Exception or the IPU Exception.
21. Except for clause 2.5(2)(b), all investments by a Fund in another investment fund in the Three Tier Structure will be made in accordance with the provisions of section 2.5 of NI 81-102 (including in accordance with applicable exemptive relief granted from such provisions).
22. Each fund-of-fund investment in the Three Tier Structure will be subject to the Policies. The Filer must, in accordance with the Policies, seek the fair treatment of investors in all investment funds managed by the Filer, including funds involved in a Three Tier Structure by allocating transaction costs fairly between funds. Additionally, the Policies manage certain large securityholder investments, with a view of ensuring that a fund and its investors are not adversely impacted by trading activities of any large securityholder who benefits from a fee reduction.
23. To manage liquidity risk due to cross-ownership of funds within the Three-Tier Structure, the Filer will use a combination of risk management tools to address the significant investor risk, including (i) IRC approved governance policies that have been adopted to protect all investors in the Funds, (ii) internal portfolio manager notification requirements of significant cash flows into the Funds, (iii) ongoing liquidity monitoring of each Fund's portfolio, and (iv) real time cash projection reporting for the Funds. Each affiliated fund in the Three-Tier Structure will be managed as a stand-alone investment for purposes of the application of these risk management tools.
24. The prospectus of each Wrap Fund in the Three-Tier Structure will disclose that a Wrap Fund invests in securities of its corresponding Middle Fund, and that each such Middle Fund may invest more than 10% of its net asset value in the securities of Third Tier Funds.
25. The prospectus of each affiliated investment fund in the Three-Tier Structure will also disclose that the accountability for portfolio management is (a) at the level of each Middle Fund with respect to the selection of Third Tier Funds to be purchased by that Middle Fund and with respect to the purchase and sale of any other portfolio securities or other assets held by that Middle Fund and (b) at the level of each Third Tier Fund with respect to the purchase and sale of portfolio securities and other assets held by that Third Tier Fund.
26. An investment by a Middle Fund in securities of its Third Tier Funds will be made in accordance with the provisions of section 2.5 of NI 81-102, including paragraphs 2.5(2)(a) and 2.5(2)(a.1) (as applicable) of NI 81-102.
27. There will be no duplication of fees between each tier of the Three-Tier Structure contrary to the applicable restriction in clause 2.5(2)(d) of NI 81-102 NI 81-102. The prospectus of each Fund will disclose that fees and expenses will not be duplicated because of investments in underlying investment funds and clause 2.5(2)(d) of NI 81-102 will therefore be complied with.
28. To avoid duplicative fees, a Wrap Fund will either invest in a class of securities of a Middle Fund that either charges nil management and other fees or waives or reimburses such fees. A Wrap Fund may also itself not charge any duplicative management fees. Similarly, a Middle Fund will invest in a class of securities of an Affiliated Third Tier Fund that either charges nil management and other fees or waives or reimburses such fees. Where a Middle Fund invests in securities of Unaffiliated Third Tier Funds, the Filer will ensure that the Middle Fund does not pay management or other fees that, to a reasonable person, would duplicate a fee payable by the Unaffiliated Third Tier Fund for the same service. No sales charges will be paid by a Wrap Fund relating to an investment into any Middle Fund or by any Middle Fund relating to an investment in any Affiliated Third Tier Fund. Accordingly, there will be no duplication of fees, contrary to clause 2.5(2)(d) of NI 81-102, in a Three-Tier Structure.
29. Each Wrap Fund in a Three-Tier Structure will comply with the requirements under NI 81-106 relating to top 25 positions portfolio holdings disclosure in its management reports of fund performance and the requirements of Form 81-101F3 Contents of Fund Facts Document or Form 41-101F4 Information Required in an ETF Facts Document, as applicable, relating to top 10 position portfolio holdings disclosure in its Fund Facts or ETF Facts, as applicable, as if the Wrap Fund was investing directly in the Third Tier Funds.
30. The investment objectives of the underlying funds held by a Wrap Fund in a Three-Tier Structure will generally be independent of each other in order to minimize potential overlap between the securities held by the respective portfolios of the underlying funds. To address any potential duplication of securities between underlying funds, the Filer will, through its compliance testing, aggregate the portfolio holdings across all affiliated underlying funds (and will use its best efforts to also aggregate and include the portfolio holdings of Unaffiliated Third Tier Funds) in a Three-Tier Structure for purposes of determining compliance with the concentration, control and other threshold limits under NI 81-102.
31. It would not be prejudicial to the public interest to grant the Exemption Sought.
The principal regulator is satisfied that the decision meets the test set out in the Legislation for the principal regulator to make the decision. The decision of the principal regulator under the Legislation is that the Exemption Sought is granted, provided that:
(i) the Filer, or an affiliate, is the investment fund manager and portfolio manager of each Fund and any Affiliated Third Tier Fund;
(ii) the investment strategy of each Wrap Fund, as stated in its prospectus, states the name of its corresponding Middle Fund;
(iii) the investment strategies of each Wrap Fund will state that the Wrap Fund will invest in a corresponding Middle Fund and the Middle Fund may invest more than 10% of its net assets in one or more other investment funds;
(iv) the proposed investment of each Wrap Fund in its corresponding Middle Fund and the investment by each Middle Fund in a Third Tier Fund is otherwise made in compliance with all other requirements of section 2.5 of NI 81-102, except to the extent that discretionary relief has been granted from any such requirement;
(v) there is no duplication of management fees or administrative fees between each tier of the Three-Tier Structure contrary to clause 2.5(2)(d) of NI 81-102;
(vi) the Three-Tier Structure is implemented in a manner that seeks the fair treatment for investors in all of the investment funds managed by the Filer that are involved in the Three-Tier Structure by allocating portfolio transaction costs fairly among all of such investment funds;
(vii) the Filer maintains investor protection policies and procedures that address liquidity and redemption risk due to cross-ownership of funds within the Three-Tier Structure, and each affiliated fund in a Three-Tier Structure is managed as a stand-alone investment for purposes of these policies and procedures;
(viii) a Wrap Fund only invests directly in securities of a corresponding Middle Fund. Other investments may include cash, cash equivalents and derivatives; and
(ix) each Wrap Fund complies with the requirements under NI 81-106 relating to top 25 positions portfolio holdings disclosure in its management reports of fund performance and the requirements of Form 81-101F3 Contents of Fund Facts Document or Form 41-101F4 Information Required in an ETF Facts Document, as applicable, relating to top 10 position portfolio holdings disclosure in its Fund Facts or ETF Facts, as applicable, as if the Wrap Fund was investing directly in the Third Tier Funds.
Application File #: 2026-85
SEDAR+ File #: 6397034
Canada Life Investment Management Ltd.
National Policy 11-203 Process for Exemptive Relief Applications in Multiple Jurisdictions -- Relief granted from paragraphs 2.5(2)(a), (a.1), (b) and (c) of NI 81-102 to permit investment funds that are reporting issuers to invest a portion of their assets in underlying investment funds that are not reporting issuers and that may hold more than 10% of their net asset value in securities of other related investment funds -- Investments by top funds in underlying investment funds will provide exposure to private market assets and will be included as part of the calculation for the purposes of the illiquid asset restriction in section 2.4 of NI 81-102 -- Relief subject to certain conditions.
National Instrument 81-102 Investment Funds, ss. 2.5(2)(a), 2.5(2)(a.1), 2.5(2)(b), 2.5(2)(c) and 19.1.
April 13, 2026
The principal regulator in the Jurisdiction has received an application from the Filer, on behalf of Counsel Global Listed Private Equity Pool (the Initial Top Fund) and any additional existing and future investment funds managed by the Filer, or an affiliate of the Filer, that are subject to National Instrument 81-102 Investment Funds (NI 81-102) (the Additional Top Funds and together with the Initial Top Fund, the Top Funds and individually a Top Fund), for a decision under the securities legislation of the Jurisdiction of the principal regulator (the Legislation) for an exemption, pursuant to section 19.1 of NI 81-102, from:
(a) Paragraphs 2.5(2)(a) and 2.5(2)(a.1) of NI 81-102, to permit each Top Fund to purchase or hold securities of Northleaf Global Private Equity Fund (the Initial Underlying Northleaf Fund), Sagard Private Equity Strategies LP (the Initial Underlying Sagard Fund), and/or any other future investment fund that is, or will be, managed by Northleaf or Sagard (as defined herein), and that is not subject to NI 81-102 (the Future Underlying Northleaf Funds and the Future Underlying Sagard Funds, and together, the Future Underlying Funds). The Initial Underlying Northleaf Fund, the Initial Underlying Sagard Fund, and the Future Underlying Funds are collectively referred to as the Underlying Funds and individually an Underlying Fund;
(b) Paragraph 2.5(2)(b) of NI 81-102, to permit each Top Fund to purchase or hold securities of an Underlying Fund which in turn may hold more than 10% of its net asset value (NAV) in securities of one or more investment funds; and
(c) Paragraph 2.5(2)(c) of NI 81-102, to permit each Top Fund to purchase or hold securities of an Underlying Fund which will not be a reporting issuer in any jurisdiction (together, the Exemption Sought).
Under the Process for Exemptive Relief Applications in Multiple Jurisdictions (for a passport application):
(a) the Ontario Securities Commission is the principal regulator for this application; and
(b) the Filer has provided notice that paragraph 4.7(1) of Multilateral Instrument 11- 102 Passport System (MI 11-102) is intended to be relied upon in each of the other provinces and territories of Canada (together with Ontario, the Jurisdictions).
Terms defined in NI 81-102, National Instrument 14-101 Definitions and MI 11-102 have the same meaning if used in this decision, unless otherwise defined.
This decision is based on the following facts represented by the Filer:
The Filer
1. The Filer is a corporation governed under the laws of Canada with its registered head office located in London, Ontario.
2. The Filer is a subsidiary of the Canada Life Assurance Company, which is a wholly owned subsidiary of Great-West Lifeco Inc. ("Lifeco").
3. The Filer is registered as a portfolio manager in all Jurisdictions, as an investment fund manager in Ontario, Québec and Newfoundland and Labrador, and as a commodity trading manager in Ontario.
4. The Filer, or an affiliate of the Filer, is or will be the investment fund manager of each Top Fund.
5. The Filer, or an affiliate of the Filer, may act as portfolio manager of the Top Funds or may appoint one or more portfolio managers for the Top Funds or sub-advisers to provide the Filer, or an affiliate of the Filer, with investment advice in respect of a Top Fund's investments.
6. The Filer is not in default of securities legislation in any of the Jurisdictions.
The Top Funds
7. The Top Funds are, or will be, investment funds to which NI 81-102 applies, subject to any exemptions therefrom that have been, or may be, granted by the applicable securities regulatory authorities. A Top Fund may be an "alternative mutual fund" as defined in NI 81-102.
8. Securities of each Top Fund were, are or will be offered pursuant to a simplified prospectus prepared in accordance with National Instrument 81-101 Mutual Fund Prospectus Disclosure (NI 81-101) and Form 81-101F1 or a long form prospectus prepared in accordance with National Instrument 41-101 General Prospectus Requirements.
9. The Top Funds are, or will be, reporting issuers in at least one of the Jurisdictions.
10. No existing Top Fund is in default of securities legislation in any of the Jurisdictions.
11. Consistent with their investment strategies, and within the limits of the illiquid asset restriction of section 2.4 of NI 81-102, each Top Fund may invest in private market assets. For this purpose, each Top Fund wishes to have the ability to purchase securities of the Underlying Funds, each of which may hold more than 10% of its NAV in securities of one or more investment funds (the Third Tier Funds).
12. The prospectus of each Top Fund that distributes units by way of prospectus discloses, or will disclose, in its description of the Top Fund's investment strategies that the Top Fund may invest up to 10% of its NAV directly or indirectly in a diversified portfolio of privately held companies. This limit is consistent with the classification of the Underlying Funds as illiquid assets for purposes of NI 81-102.
13. Each Top Fund is, or will be, subject to National Instrument 81-107 Independent Review Committee for Investment Funds (NI 81-107) and the Filer has established an independent review committee (IRC) to review conflict of interest matters pertaining to the Top Funds as required by NI 81-107.
Northleaf
14. Northleaf Capital Group Ltd., together with its affiliates including Northleaf Capital Partners (Canada) Ltd. (Northleaf), is a global private markets investment firm with more than US$31 billion in private equity, private credit and infrastructure commitments under management on behalf of more than 375 public, corporate and multi-employer pension plans, endowments, foundations, financial institutions and family offices. Northleaf is led by an experienced group of professionals, who collectively have significant experience in structuring, investing and managing global private markets investments and in evaluating, negotiating, structuring and executing complex financial transactions.
15. On October 28, 2020, the Filer's affiliate, Mackenzie Financial Corporation (Mackenzie), and the Filer's indirect parent company, Lifeco, entered into a strategic partnership with Northleaf whereby Mackenzie and Lifeco jointly acquired a 49.9% non-controlling voting interest and 70% economic interest in Northleaf.
16. The Initial Underlying Northleaf Fund and the Future Underlying Northleaf Funds are, or will be, managed by Northleaf Capital Partners (Canada) Ltd., which is registered as an exempt market dealer in Alberta, British Columbia, Manitoba, Newfoundland and Labrador, Ontario, Québec and Saskatchewan, as an investment fund manager in Manitoba, Ontario and Québec and as a portfolio manager in Alberta, Manitoba and Ontario.
Sagard
17. Sagard Holdings Inc., together with its affiliates including Sagard Holdings Manager (Canada) Inc. (Sagard), is a multi-strategy alternative asset manager with professionals principally located in Canada, the U.S. and Europe. The operations of Sagard are comprised of asset management and investing activities. Sagard manages multi-billion dollars of assets under management, including unfunded commitments, primarily across four asset classes: private credit, healthcare royalties, venture capital and private equity.
18. Sagard is a wholly owned subsidiary of the Power Corporation of Canada and an affiliate of the Filer.
19. The Initial Underlying Sagard Fund and the Future Underlying Sagard Funds are, or will be, managed by Sagard Holdings Manager (Canada) Inc., which is registered as an exempt market dealer in Alberta, British Columbia, Manitoba, New Brunswick, Newfoundland and Labrador, Nova Scotia, Ontario, Prince Edward Island, Quebec, and Saskatchewan, as an investment fund manager in Ontario, Newfoundland and Labrador, and Quebec and as a portfolio manager in Quebec and Ontario.
The Underlying Funds
20. The Initial Underlying Northleaf Fund is a non-redeemable investment fund that seeks to provide the Top Funds with superior long-term returns through access to the value creation and capital growth potential of the private mid-market while offering the possibility of reduced risk through portfolio diversification. The Initial Underlying Northleaf Fund will execute its investment strategy by capitalizing on Northleaf's at-scale global private equity program, investing in a combination of primary investments, secondary investments and direct investments (each a Portfolio Investment and collectively the Portfolio Investments).
21. The Initial Underlying Sagard Fund is a non-redeemable investment fund that seeks to provide the potential for long-term capital growth through investment in a broadly diversified portfolio of high-quality primary investments, secondary investments, and direct investments selected to meaningfully outperform both public and private equity benchmarks over a long-term horizon. The Initial Underlying Sagard Fund seeks to build a diversified portfolio of private equity investments with a focus on North American small and mid-market buyout and growth equity investments and may also opportunistically pursue exposure to larger transactions and venture capital opportunities that are secondary investments.
22. The Underlying Funds invest, or may invest, in other private equity funds sponsored by, and direct investments in partnership with, third party fund managers with whom Northleaf or Sagard have an investment relationship.
23. Each Underlying Fund is, or will be, an "investment fund" as defined under the Legislation.
24. No Underlying Fund is, or will be, subject to NI 81-102 or be a reporting issuer in any of the Jurisdictions.
25. Northleaf and Sagard are not in default of the securities legislation of any of the Jurisdictions.
26. The Initial Underlying Northleaf Fund and the Initial Underlying Sagard Fund are not in default of the securities legislation of any of the Jurisdictions.
27. The Initial Underlying Northleaf Fund is valued no less frequently than quarterly and its securities are redeemable upon prior written notice subject to a lock-up period and specified fund and investor-level limitations on redemptions. The Initial Underlying Sagard Fund is valued on a monthly basis and redemptions are accepted quarterly at quarter-end NAV, with 65 calendar days' notice and are limited to 5% of the NAV per quarter. As such, the Top Funds will not be able to readily dispose of their interest in the Initial Underlying Northleaf Fund or the Initial Underlying Sagard Fund and any interest that the Top Funds hold in the Underlying Funds will be considered an "illiquid asset" under NI 81-102.
28. Future Underlying Funds may be potentially subject to redemption limitations, such as lock-up periods, early redemption penalties and/or other restrictions on redemptions in a given period of time (each, a Redemption Limitation).
29. As part of its investment objective and strategies, each Underlying Fund may invest in securities of Third Tier Funds. Each Third Tier Fund may be an "investment fund" as defined under the Legislation.
30. Paragraph 2.5(2)(b) of NI 81-102 prohibits an investment fund from investing in another investment fund if, at the time of purchase, the other investment fund has more than 10% of its net assets invested in securities of other investment funds (the Multi-Tier Prohibition).
31. Since an Underlying Fund's investment in securities of the Third Tier Funds may, from time to time, exceed 10% of the NAV of the Underlying Fund, the Multi-Tier Prohibition will prohibit a Top Fund from investing in an Underlying Fund.
32. An investment by a Top Fund in an Underlying Fund would not qualify for the exemptions in paragraph 2.5(4) of NI 81-102 from the Multi-Tier Prohibition because the Underlying Funds do not issue index participation units and are not clone funds or money market funds.
33. No Underlying Fund will sell short securities of a Third Tier Fund, excluding index participation units.
34. The Third Tier Funds may be managed by Northleaf and/or Sagard, or their affiliates. It is expected that the Third Tier Funds will invest in and hold private assets, including primary, secondary and direct investments across several private asset classes, including private equity and private credit.
35. At least 85% of the aggregate asset value of an Underlying Fund's investments will comprise (i) underlying third party private funds that are valued by a firm that is independent of the Filer and Northleaf or Sagard, as applicable, (ii) underlying related party private funds supported by independent valuation, (iii) direct investments in private assets valued by a firm that is independent of the Filer and Northleaf or Sagard, as applicable, and (iv) liquid investments, including exchange-traded funds and cash instruments.
36. On an annual basis, the financial statements of an Underlying Fund will be audited by its respective external auditors. As part of these audits, the external auditors independently assess the fair value of investments in each Underlying Fund and evaluate the controls and processes in place to ensure each Underlying Fund's Portfolio Investments are accurately valued in accordance with Northleaf's and Sagard's respective valuation policies.
37. Northleaf's and Sagard's respective private equity valuation policies, as applied to the Underlying Funds, are consistent with the International Private Equity and Venture Capital Valuation Guidelines.
Investments by Top Funds in the Underlying Funds
38. An investment by a Top Fund in an Underlying Fund will only be made if the investment is, or will be, compatible with the investment objectives of the Top Fund.
39. An investment by a Top Fund in an Underlying Fund will only be made if such investment represents the business judgment of a responsible person uninfluenced by considerations other than the best interests of that Top Fund.
40. The investments in the Underlying Funds will be included as part of the calculation for the purposes of the illiquid asset restriction in section 2.4 of NI 81-102 for each Top Fund.
41. The Filer believes that a meaningful allocation to private equity investments provides the Top Funds' investors with unique diversification opportunities and represents an appropriate investment tool for the Top Funds that has not been widely available in the past. Private equity investments have historically performed well in down markets; the Filer believes that permitting the Top Funds to invest in private equity offers the potential to improve the Top Funds' risk-adjusted returns and reduce volatility.
42. An investment in the Initial Underlying Northleaf Fund or Initial Underlying Sagard Fund by a Top Fund is an efficient and cost-effective way for the Top Funds to implement a private equity investment strategy. The Filer believes it is in the best interests of the Top Funds to make use of Northleaf's and Sagard's experience and expertise as private equity investors to achieve a Top Fund's desired exposure to a diversified portfolio of private companies. Without established relationships and internal private equity expertise, which Northleaf and Sagard possess but the Filer does not, it is extremely difficult to invest with leading global private equity sponsors. A Top Fund's investment in an Underlying Fund will provide access to high-quality private equity opportunities that would not otherwise be attainable.
43. Northleaf and Sagard provide an active and purposeful approach to private equity portfolio construction, risk management and diversification that the Filer does not have the expertise to replicate. Northleaf and Sagard engage in extensive due diligence of each investment opportunity to ensure that the investment meets the expected risk/return profile for the fund participating in the investment. In summary, investing in the Underlying Funds will provide the Top Funds with access to investments in hard to access private equity funds and assets that the Top Funds would not otherwise have exposure to constructed by Northleaf's and Sagard's experienced private equity professionals.
44. Investments by a Top Fund in an Underlying Fund will be effected at an objective price, which for this purpose will be: a) in respect of an Underlying Fund that is open-ended, the NAV per security of the applicable class or series of the Underlying Fund; and b) in respect of an Underlying Fund that is closed-ended, a fixed price at the time of investment or acquisition.
45. A Top Fund will not invest in an Underlying Fund unless the portfolio manager of the Top Fund believes that the liquidity of the Top Fund's portfolio is adequately managed through other strategies.
46. The Filer does not anticipate that any sales fees or redemption fees would be incurred, directly or indirectly, by a Top Fund with respect to an investment in an Underlying Fund and between the Underlying Fund and the Third Tier Funds if such Third Tier Funds are managed by Northleaf and/or Sagard that, to a reasonable person, would duplicate a fee payable by the Top Fund or its investors to the Filer, unless the Top Fund redeems its securities of the Underlying Fund during a Redemption Limitation, in which case a fee may be payable by the Top Fund.
47. In respect of an investment by a Top Fund in an Underlying Fund and in respect of an investment by an Underlying Fund in a Third Tier Fund, no management fees or incentive fees will be payable by a Top Fund or an Underlying Fund, respectively, that, to a reasonable person, would duplicate a fee payable by an Underlying Fund or a Third Tier Fund, respectively, for the same service.
General
48. Absent the Exemption Sought, a Top Fund would be prohibited by paragraphs 2.5(2)(a) (or 2.5(2)(a.1)), 2.5(2)(b) and 2.5(2)(c) of NI 81-102 from purchasing or holding securities of an Underlying Fund because the Underlying Funds (i) are not subject to NI 81-102; (ii) may hold more than 10% of their respective NAV in securities of other investment funds; and (iii) are not a reporting issuer in any Jurisdiction.
49. The Filer considers that investments in securities of Underlying Funds by the Top Funds raise "conflict of interest matters" within the meaning of NI 81-107 and therefore if the Exemption Sought is granted, the Filer will request approvals of the IRC for the proposed investments of the Top Funds in the Underlying Funds including by way of standing instructions. No such investments will be made until the IRC provides its approvals under section 5.2 of NI 81-107.
50. Aside from the sections covered by the Exemption Sought, the Top Funds will otherwise comply with section 2.5 of NI 81-102 with respect to any investment in an Underlying Fund.
51. Investments in the Underlying Funds are considered illiquid investments under NI 81-102 and therefore are not permitted to exceed 10% of the NAV of a Top Fund.
52. As with any other illiquid investment, the portfolio managers of a Top Fund will carefully monitor the portfolio holdings and the liquidity needs of the Top Fund. Further, while the Top Funds may invest up to 10% in illiquid assets in accordance with NI 81-102, the Filer intends to keep the percentage of a Top Fund that is invested in illiquid assets at a moderately lower percentage to allow for fluctuations in the size of the Top Fund in order to manage compliance with the 10% restriction.
53. Given the readily available liquidity of the remainder of a Top Fund's investment portfolio, the Filer believes that the risk of the Top Fund needing to liquidate its investments in an Underlying Fund when markets are under stress or in other environments where liquidity may be reduced is remote.
54. The prospectus of the Top Funds will disclose in the next regularly scheduled renewal, or amendment if earlier, the fact that the Top Funds invest in securities of the Underlying Funds and that each Underlying Fund may invest more than 10% of its NAV, on an aggregate basis, in securities of other investment funds, including Third Tier Funds.
The principal regulator is satisfied that the decision meets the test set out in the Legislation for the principal regulator to make the decision.
The decision of the principal regulator under the Legislation is that the Exemption Sought is granted, provided that:
1. no Top Fund is actively participating or will actively participate in the business, management or operations of an Underlying Fund;
2. each Top Fund is treated as if it were an arm's length investor in an Underlying Fund, with each investment by a Top Fund in a class or series of securities of an Underlying Fund made at a price and other terms no less favourable for the Top Fund as for all arm's length investors in the same class or series of securities of that Underlying Fund;
3. the investment by a Top Fund in securities of an Underlying Fund is compatible with the investment objectives and strategies of the Top Fund and included as part of the calculation for the purposes of the illiquid asset restriction in section 2.4 of NI 81-102;
4. the IRC of a Top Fund will review and provide its approval, including by way of standing instructions, prior to the purchase of securities of an Underlying Fund, directly or indirectly, by the Top Fund, in accordance with subsection 5.2(2) of NI 81-107;
5. the Filer will comply with section 5.1 of NI 81-107, and the Filer and the IRC of the Top Fund will comply with section 5.4 of NI 81-107 for any standing instructions the IRC provides in connection with an investment by a Top Fund in an Underlying Fund;
6. a Top Fund will invest in securities of each Underlying Fund at an objective price, which for this purpose will be: a) in respect of an Underlying Fund that is open-ended, the NAV per security of the applicable class or series of the Underlying Fund; and b) in respect of an Underlying Fund that is closed-ended, a fixed price at the time of investment or acquisition;
7. at least 85% of the aggregate asset value of an Underlying Fund's investments will comprise (i) underlying third party private funds that are valued by a firm that is independent of the Filer and Northleaf or Sagard, as applicable, (ii) underlying related party private funds supported by independent valuation, (iii) direct investments in private assets valued by a firm that is independent of the Filer and Northleaf or Sagard, as applicable, and (iv) liquid investments, including exchange-traded funds and cash instruments;
8. the prospectus of a Top Fund relying on this decision discloses, or will disclose, in the next renewal or amendment thereto following the date of this decision, the fact that the Top Fund may invest a portion of its assets in securities of the Underlying Funds, and that each Underlying Fund may invest more than 10% of its NAV, on an aggregate basis, in securities of other investment funds, including Third Tier Funds;
9. the Top Fund's investment in securities of each Underlying Fund and each Underlying Fund's investment in each Third Tier Fund is otherwise made in compliance with all other requirements of section 2.5 of NI 81-102 (except to the extent that discretionary relief has been granted from any such requirement), including, for greater certainty that:
(a) no management fees or incentive fees will be payable by a Top Fund or an Underlying Fund, respectively, that, to a reasonable person, would duplicate a fee payable by an Underlying Fund or a Third Tier Fund, respectively, for the same service;
(b) no sales fees or redemption fees will be payable by a Top Fund or an Underlying Fund, respectively, in relation to its purchases or redemptions of the securities of an Underlying Fund or a Third Tier Fund that is managed by Northleaf and/or Sagard, unless the Top Fund redeems its securities of the Underlying Fund during a Redemption Limitation, in which case a fee may be payable by the Top Fund; and
(c) the Filer will not cause the securities of an Underlying Fund held by a Top Fund to be voted at any meeting of the holders of such securities, except that the Filer may arrange for the securities the Top Fund holds of an Underlying Fund to be voted by the beneficial owners of the securities of the Top Fund who are not the Filer or an officer, director or substantial securityholder of the Filer.
10. where applicable, a Top Fund's investment in an Underlying Fund is or will be disclosed to investors in the Top Fund's quarterly portfolio holding reports, financial statements and/or fund facts documents.
Application File #: 2026-127
SEDAR+ File #: 6411643
Multilateral Instrument 11-102 Passport System and National Policy 11-203 Process for Exemptive Relief Applications in Multiple Jurisdictions -- National Instrument 52-107 Acceptable Accounting Principles and Auditing Standards (NI 52-107), s. 5.1 -- the Filers are granted relief from the requirements under section 3.2 of NI 52-107 that financial statements be prepared in accordance with Canadian GAAP applicable to publicly accountable enterprises in order to permit the Filers to prepare their financial statements in accordance with U.S. GAAP.
National Instrument 52-107 Acceptable Accounting Principles and Auditing Standard, ss. 3.2 and 5.1.
Citation:Re Enbridge Gas Inc., Enbridge Pipelines Inc. and Westcoast Energy Inc., 2026 ABASC 44
April 13, 2026
The securities regulatory authority or regulator in each of the Jurisdictions (each a Decision Maker) has received an application from the Filers for a decision under the securities legislation of the Jurisdictions (the Legislation) for an exemption (the Exemption Sought) from the requirements of section 3.2 of National Instrument 52-107 Acceptable Accounting Principles and Auditing Standards (NI 52-107) that the financial statements of the Filers (a) be prepared in accordance with Canadian generally accepted accounting principles (Canadian GAAP) applicable to publicly accountable enterprises and (b) disclose an unreserved statement of compliance with International Financial Reporting Standards (IFRS) in the case of annual financial statements and an unreserved statement of compliance with IAS 34 in the case of an interim financial report.
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 11-102 Passport System (MI 11-102) is intended to be relied upon in each of British Columbia, Saskatchewan, Manitoba, Québec, New Brunswick, Nova Scotia, Prince Edward Island and Newfoundland and Labrador (the Passport Jurisdictions); and
(c) this decision is the decision of the principal regulator and evidences the decision of the securities regulatory authority or regulator in Ontario.
In this decision:
(a) unless otherwise defined herein, terms defined in National Instrument 14-101 Definitions, MI 11-102 or NI 52-107 have the same meaning if used herein;
(b) Existing Relief means the decision of the Decision Makers dated January 4, 2023 in Re Enbridge Pipelines Inc., 2023 ABASC 3;
(c) Handbook means the Chartered Professional Accountants of Canada Handbook; and
(d) rate-regulated activities has the meaning ascribed thereto in the Handbook.
This decision is based on the following facts represented by the Filers:
1. Enbridge Inc. (EI), Enbridge Pipelines Inc. and Westcoast Energy Inc. are continued under the Canada Business Corporations Act and each of their head offices is located in Calgary, Alberta.
2. Enbridge Gas Inc. is incorporated under the Business Corporations Act (Ontario) and its head office is located in North York, Ontario.
3. Each of the Filers is a reporting issuer in each of the Jurisdictions and Passport Jurisdictions and is not in default of securities legislation in any jurisdiction in Canada.
4. Each of the Filers currently prepares and files its financial statements for annual and interim periods in accordance with United States generally accepted accounting principles (U.S. GAAP), as permitted by the Existing Relief.
5. Each of the Filers carries on rate-regulated activities.
6. Each of the Filers is an indirect wholly-owned subsidiary of EI.
7. The financial statements of each of the Filers are consolidated into the financial statements of EI.
8. EI is an SEC issuer and relies on section 3.7 of NI 52-107 to file financial statements prepared in accordance with U.S. GAAP.
9. None of the Filers is an SEC issuer.
10. Were any of the Filers SEC issuers, they would be permitted by section 3.7 of NI 52-107 to file their financial statements prepared in accordance with U.S. GAAP.
11. The Existing Relief provides that it will terminate in respect of each Filer on the earliest of the following: (i) January 1, 2027; (ii) if the Filer ceases to have rate-regulated activities, the first day of the Filer's financial year that commences after the Filer ceases to have rate-regulated activities; and (iii) the first day of the Filer's financial year that commences on or following the later of: (A) the effective date prescribed by the International Accounting Standards Board (IASB) for a standard within IFRS for entities with rate-regulated activities (a Mandatory Rate-regulated Standard); and (B) two years after the IASB publishes the final version of a Mandatory Rate-regulated Standard. Accordingly, in the absence of further relief provided by Canadian securities regulators, the Filers would become subject to Canadian GAAP no later than January 1, 2027. Canadian GAAP includes IFRS as incorporated into the Handbook.
12. The issuance by the IASB of a Mandatory Rate-regulated Standard would result in the expiry of the Existing Relief, giving rise to the obligation of the Filers to commence financial statement preparation and reporting in accordance with IFRS pursuant to NI 52-107.
13. In January 2021, the IASB published the Exposure Draft -- Regulatory Assets and Regulatory Liabilities, which introduces a proposed standard of accounting for regulatory assets and liabilities applicable to entities with rate-regulated activities. In July 2024, the IASB concluded its re-deliberations and confirmed readiness to move forward with a new IFRS Accounting Standard to supersede IFRS 14. In October 2025, the IASB published an update on the review and comment process on the proposed standard, including the staff analysis and recommendations on certain issues, and indicated that the drafting and balloting process was continuing.
14. The IASB has publicly stated that it expects to publish the Mandatory Rate-regulated Standard in the second quarter of 2026, although the effective date (now expected to be January 1, 2029) has not been confirmed. The Filers will require sufficient time to: (a) interpret and implement such standard and transition from financial statement preparation and reporting in accordance with U.S. GAAP to IFRS; and (b) interpret and reconcile the implications on the customer rate setting process resulting from the implementation.
Each of the Decision Makers is satisfied that the decision meets the test set out in the Legislation for the Decision Makers to make the decision.
The decision of the Decision Makers under the Legislation is that:
(a) the Existing Relief is revoked;
(b) the Exemption Sought is granted to each Filer in respect of such Filer's financial statements required to be filed on or after the date of this decision, provided that the Filer prepares those financial statements in accordance with U.S. GAAP; and
(c) the Exemption Sought will terminate in respect of each Filer on the earliest of the following:
(i) January 1, 2032;
(ii) if the Filer ceases to have rate-regulated activities, the first day of the Filer's financial year that commences after the Filer ceases to have rate-regulated activities; and
(iii) the first day of the Filer's financial year that commences on or following the later of:
(A) the effective date prescribed by the IASB for a Mandatory Rate-regulated Standard; and
(B) four years after the IASB publishes the final version of a Mandatory Rate-regulated Standard.
For the Commission:
"original signed by" |
"original signed by" |
______________________________________________________________ |
______________________________________________________________ |
Kari Horn, K.C. |
Deanna Steblyk, K.C. |
Vice-Chair |
Vice-Chair |
OSC File #: 2026-109
Application for time-limited relief from prospectus requirement and trade reporting requirements -- relief to allow the Filer to distribute Crypto Contracts to permitted clients -- relief revokes prior decision which was about to expire -- relief granted subject to certain conditions set out in the decision, including disclosure and reporting requirements -- relief is time-limited -- relief will expire upon four (4) years -- relief granted based on the particular facts and circumstances of the application with the objective of fostering innovative businesses in Canada -- decision should not be viewed as precedent for other filers.
Statute cited
Securities Act, R.S.O. 1990, c. S.5, as am., ss. 1(1), 53 & 74.
Instrument, Rule or Policy cited
Multilateral Instrument 11-102 Passport System, s. 4.7.
OSC Rule 91-506 Derivatives: Product Determination, ss. 2 & 4.
OSC Rule 91-507 Derivatives: Data Reporting, Part 3.
April 14, 2026
As set out in CSA Staff Notice 21-327 Guidance on the Application of Securities Legislation to Entities Facilitating the Trading of Crypto Assets (Staff Notice 21-327) and Joint CSA/Investment Industry Regulatory Organization of Canada Staff Notice 21-329 Guidance for Crypto Asset Trading Platforms: Compliance with Regulatory Requirements (Staff Notice 21-329), securities legislation applies to crypto asset trading platform (CTPs) that facilitate or propose to facilitate the trading of instruments or contracts involving anything commonly considered a crypto asset, digital or virtual currency, or digital or virtual token (a Crypto Asset) because the user's contractual right to the Crypto Asset may itself constitute a security and/or a derivative (a Crypto Contract). To foster innovation and respond to novel circumstances, the CSA has considered time-limited relief from certain securities law requirements that would allow CTPs to operate within a regulated environment, with regulatory requirements tailored to the CTP's operations. The overall goal of the regulatory framework is to ensure there is a balance between the need to be flexible and facilitate innovation in the Canadian capital markets, while upholding the regulatory mandate of promoting investor protection and fair and efficient capital markets.
The Filer is registered as an investment dealer and is a member of CIRO (as defined below). On November 16, 2021, the Filer obtained a time-limited decision (the 2021 Decision) that exempted the Filer from (i) the prospectus requirements under the securities legislation of the Jurisdiction (the Legislation) in respect of the Filer entering into Crypto Contracts with Clients (as defined below) to purchase, custody and sell Crypto Assets and (ii) certain reporting requirements under the Local Trade Reporting Rules (as defined below) in respect of Crypto Contracts. Subsequently, the 2021 Decision was revoked and replaced by the decision, In the Matter of Fidelity Clearing Canada ULC dated April 18, 2022 (the 2022 Decision) to allow the Filer to rely upon Additional Liquidity Providers (as defined below) for purposes of fulfilling its obligations under Crypto Contracts. The 2022 Decision was extended by a decision dated April 18, 2024 (the 2024 Decision).
The Filer has submitted an application to amend and extend its existing exemptive relief in order to continue entering into Crypto Contracts with Clients to purchase, custody, sell, deposit and withdraw Crypto Assets.
This decision (the Decision) has been tailored for the specific facts and circumstances of the Filer, and the securities regulatory authority or regulator in the Applicable Jurisdictions (as defined below) will not consider this Decision as constituting a precedent for other filers.
The securities regulatory authority or regulator in the Jurisdiction has received an application from the Filer (the Passport Application) for a decision under the Legislation to extend the time-limited exemption of the Filer from the prospectus requirements under the Legislation in respect of the Filer entering into Crypto Contracts with Clients to purchase, custody, sell, deposit and withdraw Crypto Assets (the Prospectus Relief).
The securities regulatory authority or regulator in the Jurisdiction and each of the other jurisdictions referred to in the definition of Local Trade Reporting Rules (the Coordinated Review Decision Makers) have received an application from the Filer (collectively with the Passport Application, the Application) for a decision under the securities legislation of those jurisdictions exempting the Filer from certain reporting requirements under the Local Trade Reporting Rules in respect of Crypto Contracts (the Trade Reporting Relief, and together with the Prospectus Relief, the Requested Relief).
The Filer has applied for the revocation and replacement of the exemptive relief in the 2024 Decision effective as of the date of this Decision.
Under the Process for Exemptive Relief Applications in Multiple Jurisdictions (for a hybrid application):
(a) the Ontario Securities Commission is the principal regulator (the Principal Regulator) for the Application;
(b) the Filer has provided notice that, in the jurisdictions where required, section 4.7(1) of Multilateral Instrument 11-102 Passport System (MI 11-102) is intended to be relied upon in each of the other provinces and territories of Canada (the Non-Principal Jurisdictions, together with Ontario, the Applicable Jurisdictions) in respect of the Prospectus Relief; and
(c) the decision in respect of the Trade Reporting Relief is the decision of the Principal Regulator and evidences the decision of each Coordinated Review Decision Maker.
Terms defined in National Instrument 14-101 Definitions and MI 11-102 have the same meaning if used in this Decision, unless otherwise defined. In addition to the terms defined above, the following terms shall have the following meanings:
Act means the Securities Act (Ontario).
Acceptable Third-party Custodian means an entity that:
(i) is one of the following:
1. a Canadian custodian (as defined in NI 31-103) or Canadian financial institution;
2. a custodian qualified to act as a custodian or sub-custodian for assets held in Canada pursuant to section 6.2 [Entities Qualified to Act as Custodian or Sub-Custodian for Assets Held in Canada] of National Instrument 81-102 Investment Funds;
3. a custodian that meets the definition of an "acceptable securities location" in accordance with the Investment Dealer and Partially Consolidated Rules and Form 1 of CIRO;
4. a foreign custodian (as defined in NI 31-103) for which the Filer has obtained the prior written consent from the Principal Regulator and the regulator or securities regulatory authority of the Applicable Jurisdiction(s); or
5. an entity that does not meet the criteria for a qualified custodian (as defined in NI 31-103) and for which the Filer has obtained the prior written consent from the Principal Regulator and the regulator or securities regulatory authority of the Applicable Jurisdiction(s);
(ii) is functionally independent of the Filer within the meaning of NI 31-103;
(iii) has obtained audited financial statements within the last twelve months which
1. are audited by a person or company that is authorized to sign an auditor's report under the laws of a jurisdiction of Canada or a foreign jurisdiction and that meets the professional standards of that jurisdiction;
2. are accompanied by an auditor's report that expresses an unqualified opinion, and
3. unless otherwise agreed to by the Principal Regulator, discloses on their statement of financial position or in the notes of the audited financial statements the amount of liabilities that it owes to its clients for holding their assets, and the amount of assets held by the custodian to meet its obligations to those custody clients, broken down by asset; and
(iv) has obtained a Systems and Organization Controls (SOC) 2 Type 1 or SOC 2 Type 2 report within the last twelve months or has obtained a comparable report recognized by a similar accreditation board satisfactory to the Principal Regulator and the regulator or securities regulatory authority of the Applicable Jurisdiction(s);
Additional Liquidity Providers means the crypto asset trading firms or marketplaces that the Filer uses, other than FDA.
CIRO means Canadian Investment Regulatory Organization.
CSA means Canadian Securities Administrators.
Clients means the clients described in representation 6.
Crypto Asset Statement means the statement described in representations 13(v) and 16.
FCC Digital Assets Custody Account means the portion of FDA's books and records system that records the amount of Crypto Assets held by FDA in the name of the Filer on behalf of the Filer's Clients.
FCC Service means the two services that the Filer offers to Clients: the custody of Clients' Crypto Assets and the ability to enter into Crypto Contracts with the Filer to purchase and sell Crypto Assets, which services include the delivery by the Filer to Clients of Crypto Asset account statements and trade confirmations in compliance with CIRO rules.
FCC Sub-Account means the portion of the FDA Bank Account that is segregated on FDA's books and records in the name of the Filer.
FDA means Fidelity Digital Assets, National Association (formerly, Fidelity Digital Asset Services, LLC).
FDA Bank Account means the omnibus bank account at a depository institution in the name of FDA, for the benefit of the FDA's clients, holding FDA's clients' cash.
FDA Custody Service means the service provided by FDA comprised of the custody of Crypto Assets for its clients.
FDA Wallets means the FDA omnibus digital wallets holding FDA clients' Crypto Assets.
Local Trade Reporting Rules means: (i) Part 3, Data Reporting of Ontario Securities Commission Rule 91-507 Derivatives: Trade Reporting; (ii) Part 3, Data Reporting of Manitoba Securities Commission Rule 91-507 Trade Repositories and Derivatives Data Reporting; and (iii) Part 3, Data Reporting of Multilateral Instrument 96-101 Derivatives: Trade Reporting in Alberta, British Columbia, New Brunswick, Newfoundland and Labrador, Northwest Territories, Nova Scotia, Nunavut, Prince Edward Island, Saskatchewan, and Yukon.
NI 31-103 means National Instrument 31-103 Registration Requirements, Exemptions and Ongoing Registrant Obligations.
Risk Statement means a statement of risks as described in representation 13.
Specified Foreign Jurisdiction means any of the following: Australia, Brazil, any member country of the European Union, Hong Kong, Japan, the Republic of Korea, New Zealand, Singapore, Switzerland, the United Kingdom of Great Britain and Northern Ireland, the United States of America, and any other jurisdiction that the Principal Regulator may advise.
Value-Referenced Crypto Asset means a Crypto Asset that is designed to maintain a stable value over time by referencing the value of a fiat currency or any other value or right, or combination thereof.
This Decision is based on the following facts represented by the Filer:
1. The Filer is registered as an investment dealer in each of the provinces and territories of Canada, a futures commission merchant in Ontario, a dealer (futures commission merchant) in Manitoba and a derivatives dealer in Québec. As an investment dealer, the Filer is a member of CIRO. The Filer is also approved by CIRO to act as a carrying broker.
2. FDA is a national trust bank regulated in the United States by the Office of the Comptroller of the Currency. FDA is not registered in any capacity in Canada.
3. Both the Filer and FDA are part of the Fidelity group of companies known globally as Fidelity Investments®.
4. The Filer is not in default of securities legislation of any jurisdiction of Canada.
FCC Service
5. The Filer offers Clients the FCC Service, which consists of two services: the custody of the Clients' Crypto Assets and the ability of Clients to enter into Crypto Contracts with the Filer to buy and sell Crypto Assets.
6. The Filer offers the FCC Service to Clients who are: (i) CIRO member investment dealers for whom the Filer acts as carrying broker (Introducing Brokers); (ii) financial institutions, pension plans, governmental entities, corporations, trusts and partnerships; and (iii) portfolio managers acting on behalf of managed accounts. Each Client is (i) an Institutional Client (as defined under the CIRO rules) and (ii) a Permitted Client (as defined in NI 31-103).
7. A Crypto Contract is a bilateral contract or arrangement between a Client and the Filer. Accordingly, the Filer is the counterparty to each buy or sell transaction initiated by a Client. To fulfil its obligations under each Crypto Contract, the Filer, in turn, is a counterparty to a corresponding buy or sell transaction through FDA or an Additional Liquidity Provider. In connection with each Crypto Contract that involves a purchase by a Client, the Filer arranges for such applicable Crypto Assets to be custodied by FDA.
8. All trading by Clients with the Filer in Crypto Contracts is done on a suitability exempt basis in accordance with CIRO rules.
9. The Filer's trading of Crypto Contracts is consistent with activities described in Staff Notice 21-327 and constitutes the trading of securities and/or derivatives.
10. The Filer does not hold any proprietary position in Crypto Assets for itself other than in connection with the Crypto Contracts; it does not take a long or short position in a Crypto Asset with any party, including Clients.
11. The Filer does not have any authority to act on a discretionary basis on behalf of Clients and does not, and will not, manage any discretionary accounts.
12. In addition to any other agreement that a Client may have with the Filer, each Client that accesses the FCC Service has a written agreement with the Filer that provides, among other things, that the Filer custodies the cash and Crypto Assets of the Client deposited with the Filer. This agreement clearly states that with respect to the custody of any Crypto Asset, the Filer has retained FDA as a foreign custodian. The agreement further provides that a Client may enter into Crypto Contracts to purchase and/or sell Crypto Assets from or to the Filer through the FCC Service. For these services, the Filer charges Clients a fee based on the amount of Crypto Assets held and a transaction fee for each Crypto Contract to purchase or sell Crypto Assets. The Filer may also charge other fees related to the crypto business. All fees for the FCC Service are agreed to with each Client.
13. The agreement with the Client includes a Risk Statement that clearly explains, in plain language:
(i) the Crypto Contracts;
(ii) the risks associated with the Crypto Contracts;
(iii) prominently, that no securities regulatory authority or regulator in Canada has assessed or endorsed the Crypto Contracts or any of the Crypto Assets made available through the FCC Service;
(iv) the due diligence performed by the Filer before making a Crypto Asset available through the FCC Service, including the due diligence taken by the Filer to assess whether the Crypto Asset is a security and/or derivative under the securities and derivatives laws of each of the jurisdictions of Canada and the jurisdiction with which the Crypto Asset has the most significant connection, and the risks if the Filer has incorrectly determined that the Crypto Asset is not a security and/or derivative;
(v) that the Filer has prepared a plain language description of each Crypto Asset made available through the FCC Service, with instructions as to where the Client may obtain the descriptions (a Crypto Asset Statement);
(vi) the Filer's policies for halting, suspending and withdrawing a Crypto Asset from trading through the FCC Service, including criteria that would be considered by the Filer, options available to Clients holding such a Crypto Asset, any notification periods and any risks to Clients;
(vii) the location and manner in which Crypto Assets are held for the Client, and the risks and benefits to the Client of the Crypto Assets being held in that location and manner, including the impact of insolvency of the Filer or the custodian;
(viii) the manner in which the Crypto Assets are accessible by the Filer, and the risks and benefits to the Client arising from the Filer having access to the Crypto Assets in that manner;
(ix) that the Filer is a member of the Canadian Investor Protection Fund (CIPF), but the Crypto Contracts and the Crypto Assets held by the Filer (directly or indirectly) do not qualify for CIPF protection;
(x) a statement that the statutory rights in section 130.1 of the Act, and, if applicable, similar statutory rights under securities legislation of other Applicable Jurisdictions, do not apply in respect of the Risk Statement or a Crypto Asset Statement to the extent a Crypto Contract is distributed under the Prospectus Relief in this Decision; and
(xi) the date on which the information was last updated.
14. Each Client is required to acknowledge that the Client has received, read and understood the Risk Statement before opening an account with the Filer for Crypto Contracts. Such acknowledgement is prominent and separate from other acknowledgements provided by the prospective Client as part of the account opening process. A copy of the Risk Statement acknowledged by a Client and each Crypto Asset Statement delivered in the manner contemplated below to a Client is made available to the Client in the same place as the Client's other statements.
15. Before a Client enters into a Crypto Contract to buy a Crypto Asset for the first time, the Filer provides instructions for the Client to read the Crypto Asset Statement for the Crypto Asset, which includes a link to the Crypto Asset Statement on the Filer's website.
16. Each Crypto Asset Statement includes:
(i) a prominent statement that no securities regulatory authority or regulator in Canada has assessed or endorsed the Crypto Contracts or any of the Crypto Assets made available through the FCC Service;
(ii) a description of the Crypto Asset, including the background of the creation of the Crypto Asset, including the background of the developer(s) that first created the Crypto Asset, if applicable;
(iii) a description of the due diligence performed by the Filer with respect to the Crypto Asset;
(iv) any risks specific to the Crypto Asset;
(v) a direction to the Client to review the Risk Statement for additional discussion of general risks associated with the Crypto Contracts and Crypto Assets made available through the FCC Service;
(vi) a statement that the statutory rights in section 130.1 of the Act, and, if applicable, similar statutory rights under securities legislation of other Applicable Jurisdictions, do not apply in respect of the Crypto Asset Statement to the extent a Crypto Contract is distributed under the Prospectus Relief in this Decision; and
(vii) the date on which the information was last updated.
17. The Filer has policies and procedures for updating the Risk Statement and each Crypto Asset Statement to reflect any material change to the disclosure or include any material risk that may develop with respect to the Crypto Contracts, Crypto Assets generally, or a specific Crypto Asset, as the case may be. In the event the Risk Statement is updated, Clients will be promptly notified and provided with a copy of the updated Risk Statement. In the event a Crypto Asset Statement is updated, existing Clients of the Filer with Crypto Contracts in respect of that Crypto Asset will be promptly notified, with links provided to the updated Crypto Asset Statement.
18. The Filer does not maintain its own hot or cold storage for Crypto Assets. The Filer has retained FDA as a foreign custodian in respect of the custody of Crypto Assets and in order to execute some of the trades with the Filer that relate to the Filer's obligations regarding the purchase and sale of Crypto Assets pursuant to the Crypto Contracts. In that regard, the Filer has entered into a services agreement with FDA for, among other things, the FDA Custody Service. While FDA provides services to the Filer, FDA has no contractual relationship with the Clients and the only direct interaction that FDA has with the Clients relates solely to the actual transfer of Crypto Assets for custody purposes, as described below. The Filer is responsible for all applicable "know your client" account opening requirements and the Proceeds of Crime (Money Laundering) and Terrorist Financing Act and its regulations.
19. The Filer has verified that FDA is appropriately registered and/or licensed to trade in the Crypto Assets in its home jurisdiction and that it is not in default of securities and banking legislation in any Applicable Jurisdiction.
20. In addition to FDA, the Filer relies upon Additional Liquidity Providers to execute some of the trades with the Filer that relate to the Filer's obligations regarding the purchase and sale of Crypto Assets pursuant to the Crypto Contracts. None of these Additional Liquidity Providers are or will be affiliated or associated with the Filer or FDA. All Crypto Assets purchased by the Filer from these Additional Liquidity Providers will be delivered immediately into the FDA Wallet in the name of the Filer as custodian of the Crypto Assets held by the Filer on behalf of Clients.
21. The Filer has taken reasonable steps to verify that each Additional Liquidity Provider is appropriately registered and/or licensed to trade in the Crypto Assets in its home jurisdiction, or that its activities do not require registration in its home jurisdiction, and that it is not in default of securities legislation in any Applicable Jurisdiction.
22. Currently, Clients are not able to negotiate the price of the Crypto Assets. However, the Filer will evaluate the price obtained from FDA and each Additional Liquidity Provider on an ongoing basis. The Filer is subject to and will remain in compliance with the best execution obligations under CIRO rules, which, for greater certainty, require fair pricing.
23. The Filer has verified that FDA and each Additional Liquidity Provider has effective policies and procedures to address concerns relating to fair price, fraud and market manipulation in connection with its trading activities in Crypto Assets.
24. The Filer has established and applies policies and procedures to review Crypto Assets and to determine whether to allow Clients to enter into Crypto Contracts to buy and sell the Crypto Asset through the FCC Service. Such review includes, but is not limited to:
(i) the creation, governance, usage and design of the Crypto Asset, including the source code relating to the Crypto Asset, the security protocols connected to the Crypto Asset, any plan for growth in the developer community that is connected to the Crypto Assets and, if applicable, the background of the developer(s) that created the Crypto Asset;
(ii) the supply, demand, maturity, utility and liquidity of the Crypto Asset;
(iii) material technical risks associated with the Crypto Asset, including any code defects, security breaches and other threats concerning the Crypto Asset and its supporting blockchain (such as the susceptibility to hacking and impact of forking), or the practices and protocols that apply to them; and
(iv) legal and regulatory risks associated with the Crypto Asset, including any pending, potential, or prior civil, regulatory, criminal, or enforcement action relating to the issuance, distribution, or use of the Crypto Asset.
25. The Filer only offers and allows Clients to enter into Crypto Contracts to buy and sell Crypto Assets that are not each themselves a security and/or a derivative. The Filer does not allow Clients to enter into Crypto Contracts in respect of Value-Referenced Crypto Assets.
26. The Filer is not engaged, and will not engage, in trades that are part of, or designed to facilitate, the creation, issuance or distribution of Crypto Assets by the developer(s) of the Crypto Asset or affiliates or associates of such person.
27. The Filer has established and applies policies and procedures to determine whether a Crypto Asset is a security and/or a derivative and is being offered in compliance with securities laws, which include, but are not limited to:
(i) consideration of statements made by any regulators or securities regulatory authorities of the Applicable Jurisdictions, other regulators in IOSCO-member jurisdictions, or the regulator with the most significant connection to a Crypto Asset about whether the Crypto Asset, or generally about whether the type of Crypto Asset, is a security and/or a derivative; and
(ii) if the Filer determines it to be necessary, obtaining legal advice as to whether the Crypto Asset is a security and/or derivative under Canadian securities legislation.
28. The Filer monitors ongoing developments related to the Crypto Assets available through the FCC Service that may cause a Crypto Asset's legal status or the assessment conducted by the Filer described in representations 24 and 27 above to change.
29. The Filer acknowledges that any determination made by the Filer as set out in representations 24 to 27 of this Decision does not prejudice the ability of the regulators or securities regulatory authorities of any province or territory of Canada to determine that a Crypto Asset that a Client may enter into a Crypto Contract to buy or sell is, in fact, a security or a derivative.
30. The Filer has established and applies policies and procedures to promptly stop the trading of any Crypto Asset available through the FCC Service, except to allow Clients to liquidate their positions in Crypto Contracts with underlying Crypto Assets that the Filer ceases to make available through the FCC Service.
Trading Crypto Assets with FDA and Additional Liquidity Providers
31. Under FDA's purchase and sale execution and order fulfillment service, client trade orders are filled based on prices provided by FDA's approved counterparties or FDA's matching service. In each case, FDA is the counterparty to the trade with its approved counterparties or its matching service and is also the counterparty to the offsetting trade with the Filer. FDA attempts to provide its clients with the best price for trade orders that is available from its network of approved counterparties and its internal order book through its order handling process. For this purpose, "best price" means the highest available price for sell orders and the lowest available price for buy orders.
32. FDA facilitates trade execution for its clients in the manner described in paragraph 33 below and by recording appropriate transfers between the FDA Wallets and the FDA Bank Account.
33. In fulfilling client trade orders, FDA engages in riskless principal trading, insofar as it trades as principal with the applicable counterparty or its internal matching service, and then immediately executes the offsetting trade with the applicable client.
34. Each Additional Liquidity Provider also facilitates trade execution services in connection with Crypto Assets.
35. If a Client decides to enter into a Crypto Contract to buy Crypto Assets through the FCC Service, the Client enters into a Crypto Contract with the Filer for the purchase. The Filer itself, in turn, will obtain pricing data for the Crypto Assets from one or more of FDA and the Additional Liquidity Providers, and will purchase the requested amount of Crypto Assets from FDA or one of the Additional Liquidity Providers. The Filer then sells the Crypto Assets to the Client and deducts the amount of the purchase price, which includes all applicable transaction fees, from the Client's account. The Filer records the Client's purchase transaction in its books and records, for display back to the Client.
36. If a Client decides to enter into a Crypto Contract to sell some of the Client's Crypto Assets through the FCC Service, the Client enters into a Crypto Contract with the Filer for the sale. The Filer itself, in turn, will obtain pricing data for the Crypto Assets from one or more of FDA and the Additional Liquidity Providers, and will sell the applicable amount of Crypto Assets to FDA or one of the Additional Liquidity Providers. The Filer then purchases the requested amount of Crypto Assets from the Client, deducts any transaction fee and transfers the remaining cash proceeds, at the direction of the Client, to the Client's bank account or to the Client's custody account with the Filer. The Filer records the Client's sale transaction in its books and records, for display back to the Client.
37. The Filer maintains books and records that show, among other things, as at the end of each business day, the particulars of each trade that occurred during that business day. Clients have access to their own accounts and records in accordance with CIRO rules. The Filer, FDA and the Additional Liquidity Providers perform reconciliations of all relevant accounts on each business day.
38. The Filer does not and will not extend margin, credit or other forms of leverage to Clients in connection the trading Crypto Contracts or Crypto Assets, except in accordance with CIRO rules and with the prior written consent of CIRO, and does not and will not offer derivatives based on Crypto Assets to Clients other than Crypto Contracts.
FDA Custody Service
39. FDA acts as foreign custodian of the Crypto Assets, which are held in the FDA Wallets. FDA satisfies the criteria of a "qualified custodian" as defined in NI 31-103. The Filer has assessed whether FDA meets the definition of an Acceptable Third-party Custodian.
40. The Crypto Assets held by FDA for the Filer on behalf of the Filer's Clients are held by FDA in the FDA Wallets with the Crypto Assets owned by other custody clients of FDA. FDA's books and records system records the amount of Crypto Assets held by FDA in the name of the Filer on behalf of the Filer's Clients, which record is referred to as the "FCC Digital Assets Custody Account".
41. If a Client decides to deposit Crypto Assets for custody, the Client contacts the Filer to request, and receive, deposit instructions. The Filer then requests the applicable deposit instruction from FDA. FDA generates the deposit instruction and communicates this instruction to the Filer, which the Filer then makes available to its Client. The Client then transfers the Crypto Assets from his, her or its existing digital asset account to the FDA Wallets in accordance with the FDA deposit instruction provided to the Client by the Filer. Upon appropriate confirmation of the deposit by FDA, FDA notifies the Filer of the updated balance in the FCC Digital Assets Custody Account, and the Filer records the Client's deposit transaction in its books and records, for display back to the Client.
42. If a Client decides to withdraw Crypto Assets from custody, the Client contacts the Filer to initiate a withdrawal transaction by indicating the type, quantity and destination instruction for the Crypto Assets. The Filer relays that information to FDA to initiate a withdrawal transaction. FDA promptly debits the Crypto Asset balance in the FCC Digital Assets Custody Account and processes the withdrawal transaction pursuant to the terms agreed to between FDA and the Filer and in accordance with the instructions provided to the Filer by the Client and to FDA by the Filer. FDA provides transaction confirmation to the Filer and, in turn, the Filer reflects the Client's transaction on its books and records, for display back to the Client.
43. The Filer maintains books and records that show, among other things, as at the end of each business day, the allocation among its Clients of the Crypto Assets recorded in the FCC Digital Assets Custody Account and the amount of the Filer's cash held in the FCC Sub-Account. Clients have access to their own accounts and records in accordance with CIRO rules. The Filer and FDA perform reconciliations of all relevant accounts on each business day.
44. FDA has obtained SOC 1 Type 2 and SOC 2 Type 2 examination reports of its internal controls. The Filer has conducted due diligence on FDA, including a review of the SOC 1 Type 2 and SOC 2 Type 2 examination reports, and has not identified any material concern.
45. The Filer and FDA operate independently of each other and have different directors, officers and employees. The FDA Custody Service is performed by FDA's personnel, who are not employees, contractors, agents or officers of the Filer.
46. FDA operates one or more custody accounts, or FDA Wallets, for the purpose of holding FDA clients' Crypto Assets. Pursuant to the services agreement between the Filer and FDA, FDA is not permitted to pledge, re-hypothecate or otherwise use any Crypto Assets held for the Filer in the course of its business.
47. FDA has established and applies policies and procedures that manage and mitigate the custodial risks, including, but not limited to, an effective system of controls and supervision to safeguard the Crypto Assets for which it acts as custodian.
48. The Filer has assessed the risks and benefits of using FDA and has determined that, in comparison to a Canadian custodian (as that term is defined in NI 31-103), it is more beneficial to use FDA, a U.S. custodian.
49. FDA currently maintains, or is insured under, professional liability insurance, with coverage for loss of digital assets, including the Crypto Assets held for the Filer.
Marketplace and Clearing Agency
50. The Filer does not operate a "marketplace" as that term is defined in National Instrument 21-101 Marketplace Operation and, in Ontario, subsection 1(1) of the Act.
51. The Filer does not operate a "clearing agency" or a "clearing house" as the terms are defined or referred to in securities or commodities futures legislation. Any clearing or settlement activity conducted by the Filer is incidental to the Filer engaging in the business of entering into Crypto Contracts with its Clients. Any activities of the Filer that may be considered the activities of a clearing agency or clearing house are related to the Filer arranging or providing for settlement of obligations resulting from agreements entered into on a bilateral basis and without a central counterparty.
The Principal Regulator is satisfied that the Decision satisfies the test set out in the Legislation for the Principal Regulator to make the Decision and each Coordinated Review Decision Maker is satisfied that the Decision in respect of the Trade Reporting Relief satisfies the test set out in the securities legislation of that jurisdiction for the Coordinated Review Decision Maker to make the Decision in respect of the Trade Reporting Relief.
The Decision of the Principal Regulator under the Legislation is that the 2024 Decision is revoked and the Requested Relief is granted, and the Decision of each Coordinated Review Decision Maker under the securities legislation of its jurisdiction is that the 2024 Decision is revoked and the Trade Reporting Relief is granted, provided that:
(a) with respect to Clients resident in an Applicable Jurisdiction, the Filer remains registered as a dealer in the category of investment dealer with the Principal Regulator and the securities regulators or securities regulatory authority in such Applicable Jurisdiction and a member of CIRO;
(b) all Crypto Contracts with Clients resident in the Applicable Jurisdictions are conducted pursuant to CIRO rules imposed on members seeking to trade in Crypto Contracts and in accordance with any acceptable practices established by CIRO, as amended from time to time;
(c) the Filer provides the FCC Services only to Clients as described in representation 6 and before offering the FCC Services to an Introducing Broker, the Filer takes reasonable steps to verify that the Introducing Broker has received the prior written approval of CIRO to offer Crypto Contracts to the Introducing Broker's clients;
(d) the Filer does not operate a "marketplace" as the term is defined in National Instrument 21-101 Marketplace Operation and, in Ontario, in subsection 1(1) of the Act or a "clearing agency" or "clearing house" as the terms are defined or referred to in securities or commodities futures legislation;
(e) except as set out in condition (f), at all times, the Filer retains FDA as its foreign custodian and custodies all of its Clients' Crypto Assets with FDA, and FDA at all times will be an Acceptable Third-party Custodian;
(f) the Filer will promptly cease using FDA as the custodian for the Crypto Assets of its Clients at any time that FDA ceases to be regulated by the Office of the Comptroller of the Currency as a national trust bank or is no longer permitted to hold Crypto Assets for clients by the Office of the Comptroller of the Currency, in which case:
(i) the Filer will hold the Crypto Assets of its Clients with a custodian that meets the definition of an Acceptable Third-party Custodian;
(ii) before the Filer holds Crypto Assets of its Clients with a custodian referred to in (i) above, the Filer will take reasonable steps to verify that the custodian:
(A) will hold the Crypto Assets for the Filer's Clients (i) in an account clearly designated for the benefit of the Filer's Clients or in trust for the Filer's Clients, (ii) separate and apart from the assets of the custodian's other clients, and (iii) separate and apart from the custodian's own assets and from the assets of any custodial service provider;
(B) has appropriate insurance to cover the loss of Crypto Assets held at the custodian;
(C) has established and applies written policies and procedures that manage and mitigate the custodial risks, including, but not limited to, an effective system of controls and supervision to safeguard the Crypto Assets for which it acts as custodian; and
(D) meets each of the requirements to be an Acceptable Third-party Custodian, except for those criteria in respect of which the custodian does not meet and the Principal Regulator and the regulator or securities regulatory authority of the other Jurisdictions have provided prior written approval for use of the custodian;
(g) the Filer has taken reasonable steps to verify that FDA:
(i) has appropriate insurance to cover the loss of Crypto Assets held by it; and
(ii) has established and applies written policies and procedures that manage and mitigate the custodial risks, including, but not limited to, an effective system of controls and supervision to safeguard the Crypto Assets for which it acts as custodian;
(h) the Filer will promptly notify the Principal Regulator if the U.S. Securities and Exchange Commission, the U.S. Commodity Futures Trading Commission, the Financial Industry Regulatory Authority, the National Futures Association, the Office of the Comptroller of the Currency or any other regulatory authority applicable to a custodian of the Filer makes a determination that (i) the Filer's custodian for its Clients' Crypto Assets is not permitted by that regulatory authority to hold client Crypto Assets or (ii) if there is a change in the status of the custodian as a regulated financial institution. In such case, the Filer will identify a suitable alternative custody provider that meets the definition of an Acceptable Third-Party Custodian to hold the Crypto Assets;
(i) the Filer will only use FDA or an Additional Liquidity Provider that it has verified is registered or licensed, to the extent required in its home jurisdiction, to execute trades in the Crypto Assets and is not in default of securities legislation in any of the Applicable Jurisdictions, and will promptly stop using FDA or an Additional Liquidity Provider if (i) the Filer is made aware that either FDA or the Additional Liquidity Provider, as the case may be, is, or (ii) a court, regulator or securities regulatory authority in any jurisdiction of Canada has determined FDA or the Additional Liquidity Provider, as the case may be, to be, in non-compliance with securities legislation in any of the Applicable Jurisdictions;
(j) before a Client enters into his, her or its first Crypto Contract, the Filer delivers to the Client a Risk Statement and requires the Client to provide electronic or written acknowledgement of having received, read and understood the Risk Statement;
(k) the disclosure in condition (j) is prominent and separate from other disclosures given to the Client at that time, and the acknowledgement is separate from other acknowledgements by the Client at that time;
(l) a copy of the Risk Statement acknowledged by a Client is made available to the Client in the same place as the Client's other statements;
(m) before a Client enters into a Crypto Contract to buy a Crypto Asset for the first time, the Filer provides instructions for the Client to read the Crypto Asset Statement for the Crypto Asset, which includes a link to the Crypto Asset Statement and includes the information set out in representation 16;
(n) the Filer will promptly update the Risk Statement and each Crypto Asset Statement to reflect any material changes to the disclosure or to include any material risk that may develop with respect to the Crypto Contracts and/or Crypto Asset and:
(i) in the event of any update to the Risk Statement, will promptly notify each Client of the update and deliver to them a copy of the updated Risk Statement, and
(ii) in the event of any update to a Crypto Asset Statement, will promptly notify each Client through website disclosures, with links provided to the updated Crypto Asset Statement;
(o) prior to the Filer delivering a Risk Statement to a Client, the Filer will deliver, or will have previously delivered, a copy of the Risk Statement to the Principal Regulator;
(p) in each Applicable Jurisdiction, the first trade of a Crypto Contract is deemed to be a distribution under the securities legislation of that jurisdiction;
(q) the Filer only trades Crypto Assets or Crypto Contracts based on Crypto Assets that are not in and of themselves securities or derivatives; for greater certainty, the Filer will not trade Value-Referenced Crypto Assets or Crypto Contracts based on Value-Referenced Crypto Assets;
(r) the Filer evaluates Crypto Assets as set out in representations 24 and 27;
(s) the Filer will not trade Crypto Assets or Crypto Contracts based on Crypto Assets with a client in a Jurisdiction, without the prior written consent of the regulator or securities regulatory authority of the Jurisdiction, where the Crypto Asset was issued by or on behalf of a person or company that is or has in the last five years been the subject of an order, judgment, decree, sanction, or administrative penalty imposed by, or has entered into a settlement agreement with, a government or government agency, administrative agency, self-regulatory organization or court in Canada or in a Specified Foreign Jurisdiction in relation to a claim based in whole or in part on fraud, theft, deceit, aiding and abetting or otherwise facilitating criminal activity, misrepresentation, violation of anti-money laundering and anti-terrorist financing laws, conspiracy, breach of trust, breach of fiduciary duty, insider trading, unregistered trading, illegal distributions, failure to disclose material facts or changes, or allegations of similar conduct;
(t) except to allow Clients to liquidate their positions in those Crypto Contracts or transfer such Crypto Assets to a blockchain address specified by the Client, the Filer will promptly stop trading Crypto Contracts where the underlying is a Crypto Asset if (i) the Filer determines it to be, (ii) a court, regulator or securities regulatory authority in any jurisdiction of Canada or the foreign jurisdiction with which the Crypto Asset has the most significant connection determines it to be, or (iii) the Filer is made aware or is informed that the Crypto Asset is viewed by a regulator or securities regulatory authority to be, a security and/or derivative;
(u) the Filer is not engaged, and will not engage, in trades that are part of, or designed to facilitate, the creation, issuance or distribution of Crypto Assets by the developer(s) of the Crypto Asset or affiliates or associates of such person.
(v) the Filer will provide the Principal Regulator with at least 10 days' prior written notice of any:
(i) change of or use of a new custodian; and
(ii) material changes to the Filer's ownership, its business operations, including its systems, or its business model;
(w) the Filer will notify the Principal Regulator, promptly, of any material breach or failure in the provision of the FCC Service, including any material cybersecurity breach of FDA's or other custodian's systems of controls or supervision that impact the Crypto Assets of a Client held by the custodian, and what steps have been taken by the Filer to address each such breach or failure. The loss of any amount of Crypto Assets in the FCC Digital Asset Custody Account will be considered a material breach or failure in the provision of the FCC Service;
(x) the Filer will deliver the reporting as set out in Appendix A;
(y) in addition to any other reporting required by Legislation, the Filer will provide, on a timely basis, any report, data, document or information about the FCC Service to the Principal Regulator, including any information about the Filer's custodian and the Crypto Assets held by the Filer's custodian, that may be requested by the Principal Regulator from time to time as reasonably necessary for the purpose of monitoring compliance with the Legislation and the conditions in this Decision, in a format acceptable to the Principal Regulator;
(z) upon request, the Filer will provide the Principal Regulator and the regulators or securities regulatory authorities of each of the Non-Principal Jurisdictions with aggregated and/or anonymized data concerning Client demographics and activity that may be useful to advance the development of the Canadian regulatory framework for trading Crypto Assets;
(aa) the Filer will promptly make any change to its business practices or policies and procedures that may be required to address investor protection concerns that may be identified by the Filer or by the Principal Regulator, in consultation with CIRO, arising from the FCC Services;
(bb) this Decision may be amended by the Principal Regulator upon prior written notice to the Filer in accordance with applicable securities legislation; and
(cc) this Decision shall expire four years from the date of this Decision.
OSC File #: 2026-98
1. The Filer will continue to deliver the following information to the Principal Regulator and each of the Coordinated Review Decision Makers in an agreed form and manner specified by the Principal Regulator and each of the Coordinated Review Decision Makers, with respect to Clients residing in the Jurisdiction of such Coordinated Review Decision Maker, within 30 days of the end of each March, June, September and December:
a. aggregate reporting of activity conducted pursuant to the FCC Service that will include the following:
i. number of Client accounts opened each month in the quarter;
ii. number of Client accounts frozen or closed each month in the quarter;
iii. number of trades in each month in the quarter;
iv. average value of the trades in each month in the quarter;
v. number of Client accounts at the end of each month in the quarter;
vi. number of Client accounts with no trades during the quarter;
vii. number of Client accounts that have not been funded at the end of each month in the quarter; and
viii. number of Client accounts that hold a positive amount of Crypto Assets at end of each month in the quarter;
b. the details of any Client complaints received by the Filer during the calendar quarter and how such complaints were addressed;
c. the details of any fraudulent activity or cybersecurity incidents during the calendar quarter, any resulting harm and effect on Clients, and the corrective measures taken by the Filer to remediate such activity or incident and prevent similar activities or incidents from occurring in the future; and
d. the details of the transaction volume per FDA and each Additional Liquidity Provider, per Crypto Asset during the quarter.
2. The Filer will deliver to the Principal Regulator and each of the Coordinated Review Decision Makers, in an agreed form and manner specified by the Principal Regulator and each of the Coordinated Review Decision Makers, a report that includes the anonymized account-level data for the FCC Services for each Client residing in the Jurisdiction of such Coordinated Review Decision Maker, within 30 days of the end of each March, June, September and December for data elements outlined in Appendix B.
Number |
Data Element Name |
Definition for Data Element{1} |
Format |
Values |
Example |
|
|||||
Data Elements Related to each Unique Client |
|||||
|
|||||
1 |
Unique Client Identifier |
Alphanumeric code that uniquely identifies a customer. |
Varchar(72) |
An internal client identifier code assigned by the CTP to the client. The identifier must be unique to the client. |
ABC1234 |
|
|||||
2 |
Unique Account Identifier |
Alphanumeric code that uniquely identifies an account. |
Varchar(72) |
A unique internal identifier code which pertains to the customer's account. There may be more than one Unique Account Identifier linked to a Unique Client Identifier. |
ABC1234 |
|
|||||
3 |
Jurisdiction |
The Province or Territory where the client, head office or principal place of business is, or under which laws the client is organized, or if an individual, their principal place of residence. |
Varchar(5) |
Jurisdiction where the client is located using ISO 3166-2 -- See the following link for more details on the ISO standard for Canadian jurisdictions codes. https://www.iso.org/obp/ui/#iso:code:3166:CA |
CA-ON |
|
|||||
Data Elements Related to each Unique Account |
|||||
|
|||||
4 |
Account Open Date |
Date the account was opened and approved to trade. |
YYYY-MM-DD, based on UTC. |
Any valid date based on ISO 8601 date format. |
2022-10-27 |
|
|||||
5 |
Cumulative Realized Gains/Losses |
Cumulative Realized Gains/Losses from purchases, sales, deposits, withdrawals and transfers in and out, since the account was opened as of the end of the reporting period. |
Num(25,0) |
Any value rounded to the nearest dollar in CAD. Use the market value at the time of transfers in, transfers out, deposits and withdrawals of the Digital Token to determine the cost basis or the realized gain or loss. |
205333 |
|
|||||
6 |
Unrealized Gains/Losses |
Unrealized Gains/Losses from purchases, deposits and transfers in as of the end of the reporting period. |
Num(25,0) |
Any value rounded to the nearest dollar in CAD. Use the market value at the time of transfers in or deposits of the Digital Token to determine the cost basis. |
-30944 |
|
|||||
7 |
Digital Token Identifier |
Alphanumeric code that uniquely identifies the Digital Token held in the account. |
Char(9) |
Digital Token Identifier as defined by ISO 24165. See the following link for more details on the ISO standard for Digital Token Identifiers. https://dtif.org/ |
4H95J0R2X |
|
|||||
Data Elements Related to each Digital Token Identifier Held in each Account |
|||||
|
|||||
8 |
Quantity Bought |
Number of units of the Digital Token bought in the account during the reporting period. |
Num(31,18) |
Any value greater than or equal to zero up to a maximum number of 18 decimal places. |
4358.326 |
|
|||||
9 |
Number of Buy Transactions |
Number of transactions associated with the Quantity Bought during the reporting period. |
Num(25,0) |
Any value greater than or equal to zero. |
400 |
|
|||||
10 |
Quantity Sold |
Number of units of the Digital Token sold in the account during the reporting period. |
Num(31,18) |
Any value greater than or equal to zero up to a maximum number of 18 decimal places. |
125 |
|
|||||
11 |
Number of Sell Transactions |
Number of transactions associated with the Quantity Sold during the reporting period. |
Num(25,0) |
Any value greater than or equal to zero. |
3325 |
|
|||||
12 |
Quantity Transferred In |
Number of units of the Digital Token transferred into the account during the reporting period. |
Num(31,18) |
Any value greater than or equal to zero up to a maximum number of 18 decimal places. |
10.928606 |
|
|||||
13 |
Number of Transactions from Transfers In |
Number of transactions associated with the quantity transferred into the account during the reporting period. |
Num(25,0) |
Any value greater than or equal to zero. |
3 |
|
|||||
14 |
Quantity Transferred Out |
Number of units of the Digital Token transferred out of the account during the reporting period. |
Num(31,18) |
Any value greater than or equal to zero up to a maximum number of 18 decimal places. |
603 |
|
|||||
15 |
Number of Transactions from Transfers Out |
Number of transactions associated with the quantity transferred out of the account during the reporting period. |
Num(25,0) |
Any value greater than or equal to zero. |
45 |
|
|||||
16 |
Quantity Held |
Number of units of the Digital Token held in the account as of the end of the reporting period. |
Num(31,18) |
Any value greater than or equal to zero up to a maximum number of 18 decimal places. |
3641.25461 |
|
|||||
17 |
Value of Digital Token Held |
Value of the Digital Token held as of the end of the reporting period. |
Num(25,0) |
Any value greater than or equal to zero rounded to the nearest dollar in CAD. Use the unit price of the Digital Token as of the last business day of the reporting period multiplied by the quantity held as reported in (16). |
45177788 |
|
|||||
18 |
Client Limit |
The Client Limit established on each account. |
Num(25,2) |
Any value greater than or equal to zero rounded to the nearest dollar in CAD, or if a percentage, in decimal format. |
0.50 |
|
|||||
19 |
Client Limit Type |
The type of limit as reported in (18). |
Char(3) |
AMT (amount) or PER (percent). |
PER |
{1} Note: Digital Token refers to either data associated with a Digital Token, or a Digital Token referenced in an investment contract.
Temporary, Permanent & Rescinding Issuer Cease Trading Orders
Company Name |
Date of Temporary Order |
Date of Hearing |
Date of Permanent Order |
Date of Lapse/Revoke |
|
||||
THERE IS NOTHING TO REPORT THIS WEEK. |
||||
Company Name |
Date of Order |
Date of Revocation |
|
||
Lipari Mining Ltd. |
April 7, 2026 |
__________ |
|
||
The Cannabist Company Holdings Inc. |
April 8, 2026 |
__________ |
Temporary, Permanent & Rescinding Management Cease Trading Orders
Company Name |
Date of Order |
Date of Lapse |
|
||
DeFi Technologies Inc. |
April 1, 2026 |
April 7, 2026 |
Outstanding Management & Insider Cease Trading Orders
Company Name |
Date of Order or Temporary Order |
Date of Hearing |
Date of Permanent Order |
Date of Lapse/Expire |
Date of Issuer Temporary Order |
|
|||||
Performance Sports Group Ltd. |
19 October 2016 |
31 October 2016 |
31 October 2016 |
__________ |
__________ |
Company Name |
Date of Order |
Date of Lapse |
|
||
Agrios Global Holdings Ltd. |
September 17, 2020 |
__________ |
|
||
Sproutly Canada, Inc. |
June 30, 2022 |
__________ |
|
||
iMining Technologies Inc. |
September 30, 2022 |
__________ |
|
||
Alkaline Fuel Cell Power Corp. |
April 4, 2023 |
__________ |
|
||
mCloud Technologies Corp. |
April 5, 2023 |
__________ |
|
||
FenixOro Gold Corp. |
July 5, 2023 |
__________ |
|
||
HAVN Life Sciences Inc. |
August 30, 2023 |
__________ |
|
||
Perk Labs Inc. |
April 4, 2024 |
__________ |
|
||
DeFi Technologies Inc. |
April 1, 2026 |
April 7, 2026 |
|
||
Enthusiast Gaming Holdings Inc. |
April 6, 2026 |
__________ |
Issuer Name:
Principal Regulator:
Type and Date:
Filing #: 06424560
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
Issuer Name:
Principal Regulator:
Type and Date:
Filing #: 06426015
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
Issuer Name:
Principal Regulator:
Type and Date:
Filing #: 06424828
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
Issuer Name:
Principal Regulator:
Type and Date:
Filing #: 06411111
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
Issuer Name:
Principal Regulator:
Type and Date:
Offering Price and Description:
Underwriter(s) or Distributor(s):
Filing #: 06299540
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Issuer Name:
Principal Regulator:
Type and Date:
Offering Price and Description:
Filing #: 06423764
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Issuer Name:
Principal Regulator:
Type and Date:
Offering Price and Description:
Filing #: 06423988
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
Issuer Name:
Principal Regulator:
Type and Date:
Offering Price and Description:
Filing #: 06423539
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
Issuer Name:
Principal Regulator:
Type and Date:
Offering Price and Description:
Filing #: 06423660
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
Issuer Name:
Principal Regulator:
Type and Date:
Offering Price and Description:
Filing #: 06425496
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
Issuer Name:
Principal Regulator:
Type and Date:
Offering Price and Description:
Filing #: 06411881
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
Issuer Name:
Principal Regulator:
Type and Date:
Offering Price and Description:
Filing #: 06412062
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
Issuer Name:
Principal Regulator:
Type and Date:
Offering Price and Description:
Filing #: 06410079
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
Issuer Name:
Principal Regulator:
Type and Date:
Offering Price and Description:
Filing #: 06299003
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Type |
Company |
Category of Registration |
Effective Date |
|
|||
Voluntary Surrender |
JVK LIFE & WEALTH ADVISORY GROUP INC./JVK LIFE & WEALTH ADVISORY GROUP |
Mutual Fund Dealer and Exempt Market Dealer |
April 8, 2026 |
|
|||
Change Registration Category |
GB WEALTH INC. |
From: Portfolio Manager and Commodity Trading Manager |
April 9, 2026 |
|
|||
|
|
To: Portfolio Manager, Commodity Trading Manager and Investment Fund Manager |
|
|
|||
Change Registration Category |
PRIVATE PENSION PARTNERS INVESTMENTS INC. |
From: Exempt Market Dealer |
April 9, 2026 |
|
|||
|
|
To: Exempt Market Dealer and Investment Fund Manager |
|
|
|||
Suspended (Regulatory Action) |
BLOOM BURTON INVESTMENT GROUP INC. |
Portfolio Manager and Investment Fund Manager |
April 8, 2026 |
Canadian Investment Regulatory Organization (CIRO) -- Proposed Amendments to Harmonize CIRO Continuing Education Programs Phase 2 -- Request for Comment
CIRO is publishing for a 90-day comment period the second phase of proposals to finalize harmonization of continuing education (CE) program requirements under the Investment Dealer and Partially Consolidated (IDPC) Rules and the Mutual Fund Dealer (MFD) Rules (Phase 2).
The objective of the Phase 2 proposals is to finalize harmonization of CIRO CE program requirements that apply to:
• CE credit requirements
• Approved Persons subject to CE requirements
• Definitions and vocabulary
• Automatic suspension and reinstatement for CE non-compliance
• Cycles
• Proration
• Leaves of absence
• Exemptions
• Mandatory accreditation assessments
• CE activities with an examination
• Express prohibition on carry forwards
• CE reporting for terminated individuals
• Compliance manual training
• Legacy exemptions
• Mandatory Conduct Training used for CE
A copy of the CIRO Bulletin, including the text of the proposed amendments, is also available on the Ontario Securities Commission website at www.osc.ca. The comment period ends on July 15, 2026.