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"' AN 'TOB A
THE COMMODITY FUTURES ACT
Order No. 6569
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A 'T ' £S
CONN,S5,ON
Section 66(1)
August 15, 2012
JEFFERIES BACHE, LLC
WHEREAS
(A)
Jefferies Bache, LLC ("Jefferies") has applied to The Manitoba Securities
Commission
(the "Commission")
for an
order
pursuant
to
subsection
66(1} of the
Commodity Futures Act (Manitoba) (the "CFA") exempting Jefferies and those individual
representatives trading in commodity futures contracts and commodity futures options
(" Contracts") under the CFA and acting on its behalf (the "Applicant") from the reporting
requirements set forth under Section 4.1 of MSC Rule 2000-11 where a dealer relying on
the exemption from the registration requirements under clause 34(a} of the CFA must file
with the Commission a fully-completed written report in the form of Form 18 within 10 days
of the date of the exem pt trade (the "Form 18 Relief').
(B)
The Applicant has represented to the Commission that
1.
The Applicant is a limited lia bi lity company established under
the laws of the State of Delaware, U.S.A. and its principal place of
business is New York, New York .
2.
The
Applicant
is
registered
as
a
Futures
Commission
Merchant with the US Commodity Futures Trading Commission ("US
CFTC") and is a member of the US National Futures Association for
the purposes of trading in respect of Contracts .
3.
The Applicant is
not,
and will not be, registered
in any
capacity under the CFA.
4.
Section 34 of the CFA states that subject to the regulations
and the rules registration is not required in respect of a trade in a
Contract (a) by a hedger through a dealer; and (b) by a person or
company acting solely through an agent that is a registered dealer.
5.
MSC Rule 2000-11 further states that a firm cannot rely on
the registrati on exemption in clause 34(a} of the CFA unless all of the
followi ng are correct:
(a)
the trade is made on a commodity futures eXChange
recognized by the Comm ission under section 36 of the CFA
or exempted
from the
requirement for
recognition
under
section 36 of the CFA;
(b)
the dealer through which the trade is effected has
insurance in place with respect to the trade that is in all
respects at least equivalent to the insurance required by a
futures commission merchant under MSC Rule 2000-11 ;
500-400 St. Mary Ave nue. Wi nnipeg, Milnilobil R3C 4KS , tel: (204) 945.2548 . fax: (204) 945.0330 ' www.msc.gov.mb.c:l
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(c)
the dealer through which the trade is effected files
with the commission a fully-completed written report in Form
18 within 10 days of the date of the trade; and
(d)
the dealer and the hedger for whose benefit the trade
was effected both sign the Form 18 report and certify the
accuracy of its contents.
6..
The Applicant has advised the Commission that it intends to
rely on Clause 34(a) of the CFA whereby it will only transact trades in
Contracts listed on a commodity futures exchange recognized by the
Commission under section 36 of the CFA, or exempted from the
requirement for recognition under section 36 of the CFA, and with
those clients that qualify as a "hedger" as that term is defined in the
CFA (the "Hedger Clients")..
7.
The Form 18 requires disclosure on the Hedging Client's
trading activity and requires that the Applicant certify that it has made
all necessary inquiries to determine whether the Hedging Client
qualifies as a "hedger" as defined in the CFA.
8.
Form 18 requires that additional filings be made with the
Commission within 10 days of each additional trade.
•
9.
The Applicant has submitted that to file the Form 18 every 10
days is unduly onerous given the ongoing and repetitive nature of
trading in the Contracts..
IT IS ORDERED:
1.
THAT pursuant to Section 66(1) of the CFA, the Form 18 Relief is granted in
connection with conducting trades in Contracts with Hedging Clients provided that:
(a)
the Applicant remains registered in good standing as a Futures
Commission Merchant with the US CFTC;
(b)
a fully-completed written report in the form of Form 18 shall be filed
with the Commission within 10 days of the date of the first exempt trade for
each Hedging Client;;
(c)
within 30 days following the end of its financial year,, the Applicant
shall submit to the Commission an annual report in the form of Form 18
under MSC Rule 2000-11 of all trades conducted in reliance on Clause 34(a)
of the CFA;
(d)
the Applicant consents to provide information to the CommiiSsSsiion,
upon request , with regards to its trading activities conducted on behalf of
•
residents of Manitoba ;
(e)
the Form 18 Relief shall expire immediately upon the issuance of an
order or decision by the Commission that suspends or terminates the ability
Page 3
of the Applicant to rely on the exemption under Clause 34 (a) of the CFA or
any change in the reporting requirements set out in Section 4.1 of MSC Rule
2000-11 .
2.
THAT the fee for this order is $650.00.
BY ORDER OF THE COMMISSION
!
Direct
You are being directed to the most recent version of the statute which may not be the version considered at the time of the judgment.