IN THE MATTER OF
NATIONAL INSTRUMENT 21-101 MARKETPLACE OPERATION
AND NATIONAL INSTRUMENT 23-101 TRADING RULES
AND
IN THE MATTER OF
THE MUTUAL RELIANCE REVIEW SYSTEM FOR
EXEMPTIVE RELIEF APPLICATIONS
AND
IN THE MATTER OF INSTINET CORPORATION
AND
IN THE MATTER OF INSTINET CANADA LIMITED
MRRS DECISION DOCUMENT
WHEREAS the local securities regulatory authority or regulator
(the "Decision Maker") in each of the provinces British Columbia, Alberta,
Manitoba, Ontario and Qu�bec (the "Jurisdictions") has received an application
from Instinet Corporation ("Instinet US") and Instinet Canada Limited
("ICL") for decisions under section 15.1 of National Instrument 21-101
Marketplace Operation ("NI 21-101") and section 12.1 of National Instrument
23-101 Trading Rules ("NI 23-101" together with NI 21-101, the "ATS
Rules") that the requirement to comply with the ATS Rules will not apply to Instinet
US until May 1, 2002, and Part 8 of NI 23-101 will not apply to ICL so long as ICL remains
a participating organization of The Toronto Stock Exchange ("TSE");
AND WHEREAS pursuant to the Mutual Reliance Review System (the "System"),
the Ontario Securities Commission is the principal regulator for this
application;
AND WHEREAS Instinet US and ICL have represented to the Decision
Makers that:
1. Instinet US is registered in Ontario as an international dealer and in British Columbia
as a securities dealer;
2. ICL is a participating organization of The Toronto Stock Exchange ("TSE") and
a member of the Investment Dealers Association of Canada ("IDA");
3. Instinet US is a corporation organized under the laws of Delaware, United States;
4. Instinet US and ICL operate an alternative trading system (the "Instinet
ATS") to facilitate trading of equity securities between institutional investors
and
investment dealers in the Jurisdictions;
5. prior to the introduction of the ATS Rules, Instinet US and ICL operate the Instinet
ATS in the Jurisdictions either in reliance on registrations in the case of Ontario and
British Columbia or in reliance on available registration exemptions in the other
Jurisdictions;
6. Instinet US and ICL have agreed to a realignment (the "Instinet Realignment")
of their business so that ICL becomes the operator in Canada of the Instinet
ATS system
and will need to take certain steps to effect the Instinet Realignment;
7. Instinet US needs a period of relief from the requirements of the ATS Rules to continue
to operate the Instinet ATS pending the implementation of the Instinet Realignment;
8. ICL has applied to the Pacific, Quebec District and Prairie District Councils of the
IDA to become a member thereof and has applied, or will apply, to be registered as an
investment dealer in each of the Jurisdictions;
9. in British Columbia, Instinet US restricts its clients to such categories of clients as
are permitted under its international dealer registration in Ontario;
10. during any period of relief from the the ATS Rules Instinet US will continue to
operate the Instinet ATS in the Jurisdictions either subject to the terms and conditions
of its registration in those Jurisdictions where it is registered or in reliance on
available registration exemptions in those Jurisdictions where it is not registered;
11. upon implementation of the Instinet Realignment, ICL will be subject to the
requirements of the TSE and Instinet US will cease to operate the Instinet ATS in the
Jurisdictions; and
12. as a member of the TSE, ICL is exempt from the requirements of NI 21-101 but it is not
exempt from Part 8 of NI 23-101;
AND WHEREAS pursuant to the System, this Decision Document
evidences the decision of each Decision Maker (collectively, the "Decision");
AND WHEREAS each of the Decision Makers is satisfied that the
test contained in the ATS Rules that provides the Decision Maker with the jurisdiction to
make the Decision has been met;
THE DECISION of the Decision Makers under the Legislation is
that Instinet US shall be exempt from the requirements of the ATS Rules until May 1, 2002;
AND THE DECISION OF THE Decision Makers is that ICL shall be
exempt from the requirements of Part 8 of NI 23-101 for so long as ICL remains a
participating organization of the TSE.
Dated this 19th day of April, 2002.
David M. Gilkes