FORM 21-101F2 INITIAL OPERATION REPORT ALTERNATIVE TRADING SYSTEM TYPE OF FILING: INITIAL OPERATION REPORT AMENDMENT Identification: 1. Full name of alternative trading system: 2. Name(s) under which business is conducted, if different from item 1: 3. If this filing makes a name change on behalf of the alternative trading system in respect of the name set out in Item 1 or Item 2, enter the previous name and the new name. Previous name: New name: 4. Head office Address: Telephone: Facsimile: 5. Mailing address (if different): 6. Other offices Address: Telephone: Facsimile: 7. Website address:
8. Contact employee Name and title: Telephone number: Facsimile: E-mail address: 9. Counsel Firm name: Contact name: Telephone number: Facsimile: E-mail address: 10. The ATS is a member of ………………………….(name of the recognized self-regulatory entity) a registered dealer 11. If this is an initial operation report, the date the alternative trading system expects to commence operation: 12. The ATS has contracted with [regulation services provider] to perform market regulation for the ATS and its subscribers. EXHIBITS File all Exhibits with the Initial Operation Report. For each Exhibit, include the name of the ATS, the date of filing of t he E xhibit a nd t he da te a s of w hich t he i nformation i s a ccurate ( if di fferent f rom t he da te of t he filing). I f any E xhibit r equired i s i napplicable, a s tatement t o that e ffect shall be furnished instead of such Exhibit. If the ATS files an amendment to the information provided in its Initial Operation Report and the information relates to an Exhibit filed with the Initial Operation Report or a subsequent amendment, the ATS must, in order to comply with subsection 3.2(1), 3.2(2) or 3.2(3) of National Instrument 21-101, provide a description of the change, the expected date of the implementation of the change, and file a complete and updated Exhibit. The ATS must provide a clean and blacklined version showing changes from the previous filing.
Exhibit A – Corporate Governance 1. Legal status: Corporation Partnership Sole Proprietorship Other (specify): 2. Except where the ATS is a sole proprietorship, indicate the following: 1. Date (DD/MM/YYYY) of formation. 2. Place of formation. 3. Statute under which the ATS was organized. 3. Provide a copy of the constating documents (including corporate by-laws), shareholder agreements, partnership agreements and other similar documents, and all subsequent amendments. 4. Provide the policies and procedures to address conflicts of interest arising from the operation of the marketplace or t he s ervices i t pr ovides, including those r elated to the com mercial i nterest of t he marketplace, t he i nterests of i ts ow ners a nd its ope rators, a nd t he r esponsibilities a nd sound functioning of the marketplace. Exhibit B – Ownership A list of the r egistered or beneficial holders of s ecurities of , pa rtnership i nterests in, or ot her ow nership interests in, the ATS. For each of the persons listed in the Exhibit, please provide the following: 1. Name. 2. Principal business or occupation and title. 3. Ownership interest. 4. Nature of the ownership interest, including a description of the type of security, partnership interest or other ownership interest, and whether the ownership interest is a legal or beneficial interest. 5. Whether t he pe rson ha s control ( as i nterpreted i n s ubsection 1.3( 2) of National I nstrument 21 -101 Marketplace Operation). In the case of an ATS that is publicly t raded, if the ATS is a corporation, please only provide a l ist of each shareholder that directly owns five percent or more of a class of a voting security of the ATS.
Exhibit C – Organization 1. A l ist of p artners, di rectors, of ficers, gov ernors, a nd m embers of t he boa rd of directors a nd any standing committees of the board, or persons performing s imilar functions, who presently hold or have held their offices or positions during the previous year, indicating the following for each: 1. Name. 2. Principal business or occupation and title. 3. Dates of commencement and expiry of present term of office or position . 4. Type of business in which each is primarily engaged and current employer. 5. Type of business in which each was primarily engaged in the preceding five years, if different from that set out in item 4. 6. Whether the person is considered to be an independent director. 2. A list of the committees of the board, including their mandates. Exhibit D – Affiliates 1. For each affiliated entity of the ATS provide the name, head office address and describe the principal business of the affiliate. 2. For each affiliated entity of the ATS (i) to which the ATS has outsourced any of its key services or systems affecting the market or facility de scribed in Exhibit E – Operations of the Marketplace, i ncluding or der e ntry, trading, execution, routing and data, or (ii) with which the A TS ha s a ny ot her material bus iness relationship, i ncluding l oans, c rossguarantees, etc. provide the following information: 1. Name and address of the affiliate. 2. The name and title of the directors and officers, or persons performing similar functions, of the affiliate. 3. A de scription of t he na ture a nd e xtent of t he c ontractual a nd ot her a greement with t he exchange and quotation and trade reporting system, and the roles and responsibilities of the affiliate under the arrangement. 4. A c opy of e ach m aterial c ontract r elating t o a ny out sourced f unctions or other material relationship. 5. Copies of c onstating doc uments ( including c orporate by -laws), shareholder agr eements, partnership agreements and other similar documents.
Exhibit E – Operations of the Marketplace Describe in detail the manner of operation of the market and its associated functions. This should include, but not be limited to, a description of the following: 1. The structure of the market (e.g., call market, auction market, dealer market). 2. Means of acces s t o t he m arket or f acility and services, including a de scription of any co location arrangements. 3. The hours of operation. 4. A de scription of t he se rvices of fered by the m arketplace i ncluding, but not l imited t o, order entry, co-location, trading, execution, routing and data. 5. A list of the types of orders offered, including, but not limited to, a description of the features and characteristics of orders. 6. Procedures r egarding the entry, di splay and execution of orders. I f i ndications of i nterest a re used, please describe the information they include and list the types of recipients. 7. Description of how orders interact, including, but not limited to, the priority of execution for all order types. 8. Description of order routing procedures. 9. Description of order and trade reporting procedures. 10. Description of procedures for clearance and settlement of transactions. 11. The safeguards and procedures of the marketplace to protect trading information of marketplace participants. 12. Training pr ovided t o pa rticipants a nd a c opy of a ny materials pr ovided bot h w ith respect t o systems of the marketplace, the requirements of the marketplace, and the rules of the regulation services providers, if applicable. 13. Steps t aken t o e nsure t hat marketplace pa rticipants ha ve know ledge of a nd c omply w ith t he requirements of the marketplace. The filer must provide all policies, procedures and trading manuals related to the operation of the marketplace and, if applicable, the order router.
Exhibit F – Outsourcing Where the ATS has outsourced the operation of key services or systems affecting the market or facility described in Exhibit E – Operations of the Marketplace to an arms-length third party, including any function associated with the routing, trading, execution, clearing and settlement, and co-location, provide the following information: 1. Name and address of person or company to whom the function has been outsourced. 2. A description of the nature and extent of the contractual or other agreement with the ATS and the roles and responsibilities of the arms-length party under the arrangement. 3. A copy of each material contract relating to any outsourced function. Exhibit G – Systems and Contingency Planning For each of the systems that support order entry, order routing, execution, trade reporting, trade comparison, data feed, market surveillance, and trade clearing, describe: 1. Current and future capacity estimates. 2. Procedures for reviewing system capacity. 3. Procedures for reviewing system security. 4. Procedures to conduct stress tests. 5. A de scription of t he f iler’s bus iness c ontinuity a nd di saster r ecovery pl ans, including a ny relevant documentation. 6. Procedures to test business continuity and disaster recovery plans. Exhibit H – Custody of Assets 1. If the ATS proposes to hold funds or securities of a marketplace participant on a regular basis, a description of the controls that will be implemented to ensure the safety of the funds or securities. 2. If any other person or company, other than the ATS, will hold or safeguard funds or securities of a marketplace participant on a regular basis, provide the name of the person or company and a description of the controls that will be implemented to ensure the safety of the funds or securities. Exhibit I – Securities List the types of securities that are traded on the ATS, indicating the exchange(s) on which such securities are listed. If this is an initial filing, list the types of securities the ATS expects to trade. Exhibit J – Access to Services 1. A complete set of all forms, agreements or other materials pertaining to participation in the services of the marketplace described in Exhibit E.4, including trading on the ATS. 2. Describe the classes of marketplace participants (i.e. dealer, institution, or retail).
3. Describe the ATS’s criteria for access to the services of the marketplace. 4. Describe any differences in access to the services offered by the marketplace to different groups or classes of marketplace participants. 5. Describe conditions under which marketplace participants may be subject to suspension or termination with regard to access to the services of the ATS. 6. Describe any procedures that will be involved in the suspension or termination of a marketplace participant. 7. Describe the ATS’s arrangements for permitting clients of marketplace participants to have access to the marketplace. Provide a copy of any agreements or documentation relating to these arrangements. Exhibit K – Marketplace Participants Provide an alphabetical list of all marketplace participants, including the following information: 1. Name. 2. Date of becoming a marketplace participant. 3. Describe t he t ype of trading activities pr imarily enga ged in by t he marketplace participant ( e.g., agency trading, proprietary trading, registered trading, market making). 4. The class of participation or other access. 5. Provide a list of all persons or entities that were denied or limited access to the marketplace, indicating for each: (i) whether they were denied or limited access; (ii) the date the marketplace took such action; (iii) the effective date of such action; and (iv) the nature and reason for any denial or limitation of access. Exhibit L - Fees A description of the fee model and all fees charged by the marketplace, or by a pa rty to which services have been directly or indirectly outsourced, including, but not limited to, fees relating to connecting to the market or facility, access, data, regulation (if applicable), trading, routing, and co-location, how such fees are set and any fee rebates or discounts and how the rebates or discounts are set. Exhibit M – Regulation The ATS ha s co ntracted with regulation services provider ………… …………….. t o pe rform m arket regulation f or A TS a nd i ts subscribers. Provide a c opy of t he c ontract be tween t he f iler a nd t he r egulation services provider. Exhibit N – Acknowledgement The form of acknowledgement required by subsections 5.9(2) and 6.11(2) of National Instrument 21-101.
CERTIFICATE OF ALTERNATIVE TRADING SYSTEM The undersigned certifies that the information given in this report is true and correct. DATED at this day of 20 ___ (Name of alternative trading system) (Name of director, officer or partner - please type or print) (Signature of director, officer or partner) (Official capacity - please type or print)
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