| THE SECURITIES ACT | ) |
Order No. 6143 |
) |
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| Section 20(1) | ) |
June 9, 2010 |
BONDWAVE, LLC
Whereas:
(A) BondWave, LLC (“Bondwave”) has applied to The Manitoba Securities Commission (the “Commission”) for an order granting an exemption under section 20(1) of The Securities Act, R.S.M. c. S50 (the “Act”) from the requirement of section 6 of the Act that Bondwave be registered as an adviser under the Act in accordance with MSC Rule 2009-3 National Instrument 31-103 Registration Requirements and Exemptions (“NI 31-103”) in connection with Bondwave providing advisory services to Cardinal Capital Management, Inc. (“Cardinal”), subject to certain conditions described herein.
(B) It has been represented to the Commission by Bondwave that:
1. Bondwave is a limited liability corporation organized under the laws of the State of Delaware, United States. The head office of Bondwave is located at Wheaton, Illinois.
2. Bondwave is registered as an investment adviser with the Securities and Exchange Commission of the United States of America under the Investment Advisers Act of 1940, as amended, a statute of the United States of America and is not registered under the securities legislation of any Canadian jurisdiction.
3. Bondwave intends to offer advisory services to Cardinal, a portfolio manager that is registered under the Act.
4. Bondwave will enter into a services agreement with Cardinal (the “Registrant Agreement”) wherein the obligations and duties of Bondwave will be set out.
5. The Registrant Agreement will permit Cardinal to use certain portfolio models provided by Bondwave (the “Bondwave Product”). Pursuant to the Registrant Agreement:6. Cardinal has contractually agreed or will contractually agree with those of its clients for whom Cardinal will utilize the Bondwave Product to be responsible for any loss that arises out of the failure of Bondwave:(a) Cardinal will agree and acknowledge that Cardinal be responsible for any advice given and actions taken pursuant to its use of the Bondwave Product in the same manner that Cardinal is responsible under the Act for advice given and actions taken by Cardinal;
(b) Cardinal will ensure that Bondwave not have any contact with the clients of Cardinal; and
(c) Bondwave will not be responsible for determining whether the use of the Bondwave Product is suitable in connection with any particular client of Cardinal.
(a) to exercise the powers and discharge the duties of its office honestly, in good faith and in a manner consistent with its duties to Cardinal pursuant to the Registrant Agreement; or
(b) to exercise the degree of care, diligence and skill that a reasonably prudent person would exercise in the circumstances.
7. Cardinal will not be able to be relieved by its clients from its responsibility under section 6 hereof.
8. Bondwave is not a resident in any Canadian jurisdiction.
9. Bondwave will not have any contact with the clients of Cardinal.
(B) The Commission is of the opinion that it would not be prejudicial to the public interest to grant the order requested.
IT IS HEREBY ORDERED:
1. THAT Bondwave is exempt from the registration requirements of the Act in accordance with NI 31-103 with respect to the activities of Bondwave in connection with providing advisory services to Cardinal on the conditions that:2. THAT the fee for this Order shall be $750.(a) Bondwave enters into a Registrant Agreement with Cardinal wherein the obligations and duties of Bondwave are set out;
(b) Bondwave maintains registration as an investment adviser with the Securities and Exchange Commission of the United States of America under the Investment Advisers Act of 1940 and engages in the business of an adviser in the United States;
(c) Cardinal contractually agrees with its clients to be responsible for the any loss that arises out of the failure of Bondwave:(d) the Registrant Agreement will permit Cardinal to utilize the Bondwave Product, and will provide that:(i) to exercise the powers and discharge the duties of its office honestly, in good faith and in a manner consistent with its duties to Cardinal pursuant to the Registrant Agreement; or
(ii) to exercise the degree of care, diligence and skill that a reasonably prudent person would exercise in the circumstances;(i) Cardinal agrees and acknowledges that Cardinal be responsible for any advice given and actions taken pursuant to its use of the Bondwave Product in the same manner that Cardinal is responsible under the Act for advice given and actions taken by Cardinal;
(ii) Cardinal will ensure that Bondwave not have any contact with the clients of Cardinal; and
(iii) Bondwave will not be responsible for determining whether the use of the Bondwave Product is suitable in connection with any particular client of Cardinal.(e) Cardinal will not be relieved by its clients from its responsibility for loss under section (c) hereof;
(f) Bondwave will not become resident in any Canadian jurisdiction;
(g) Bondwave will not have any direct contact with the clients of Cardinal; and
(h) A copy of this Order shall be provided to Cardinal.
BY ORDER OF THE COMMISSION
Deputy Director