Canada: CSA Announces Amendments To National Registration Rule


On Friday, April 15, 2011, the Canadian Securities Administrators (the CSA) published amendments to National Instrument 31-103 – Registration Requirements and Exemptions (NI 31-103) and its companion policy (the 31-103 CP); National Instrument 33-109 – Registration Information (NI 33-109) and its companion policy; and the forms that accompany the two instruments (collectively, the Amendments). The Amendments implement certain of the proposed amendments published for comment on June 25, 2010 with some modification based on comments received. Subject to receiving ministerial approvals, the Amendments will come into force on July 11, 2011 (the effective date).

While some of the Amendments may be characterized as clarification of existing requirements or technical amendments, other Amendments introduce substantive new requirements and restrictions on registrants and firms that rely upon exemptions from registration.  This Osler Update summarizes certain key substantive changes that affect registrants generally, as well as certain key substantive changes that pertain to specific categories of registrants and exempt firms, as of the effective date.

Changes in Key Transition Deadlines

  • Transition period extended for investment fund manager registration. The temporary exemption from the investment fund manager registration requirement for (i) non-Canadian investment fund managers and (ii) Canadian investment fund managers registered in their principal jurisdiction (i.e. a province of Canada) has been extended for one year to September 28, 2012. This extension will give the CSA more time to review and consider the comments received on the CSA's proposed registration requirements for non-Canadian investment fund managers that were released on October 15, 2010 by the CSA and summarized in an earlier Osler Update, " Canadian Securities Administrators Propose Amendments to Registration Rules for Canadian and Non-Canadian Investment Fund Managers."
  • Transition period for dispute resolution services extended. The transition period for the coming into force of the dispute resolution service requirements for all registrants, except those registered in Québec (and already subject to similar requirements), has been extended from September 28, 2011 to September 28, 2012.

Amendments Affecting Registrants Generally

  • Know your client requirements. For purposes of establishing the identity of a corporate client, NI 31-103 previously required registered firms to establish the identity of any individual that is a beneficial owner of, or exercises direct or indirect control or direction over, more than 10% of the voting rights of the corporation. With the introduction of the Amendments, this threshold has been raised from 10% to 25% of the voting rights.
  • Restrictions on lending to clients. The 31-103 CP will now include guidance on the application of the restriction on lending to clients in the context of trading products that inherently contain leverage. The view of the CSA is that products may contain a leverage component and not violate the restriction on lending to clients, provided the products sold to clients are structured in a way that would not result in the registrant becoming a lender to the clients. Also, the 31-103 CP will state that direct lending to clients (i.e. margin) is only permitted by Investment Industry Regulatory Association of Canada (IIROC) members.
  • Use of registrations and exemptions concurrently. Form 31-103F2 Submission to Jurisdiction and Appointment of Agent for Service will require an international firm seeking to rely upon the international dealer exemption and/or international adviser exemption to disclose to securities regulators the firm's National Registration Database (NRD) number, if it was previously assigned an NRD number as a registered firm or an unregistered exempt international firm. This requirement gives further support to the guidance provided in the response to frequently asked questions published by the CSA on December 18, 2009, where the CSA confirmed that the two exemptions are also available to a firm that is registered in a jurisdiction of Canada.
  • NI 33-109 form requirements and deadlines for filing notice of material changes to previously filed information. The deadline for filing notices of material changes in previously filed information (for example, changes in financial condition or regulatory or legal actions) has been changed from seven days to 10 days. There have also been certain technical changes to forms used in NI 33-109, mostly to reflect changes made in other sections of NI 31-103 and NI 33-109 summarized in this update.

Amendments Affecting Registered Individuals

  • Individuals registered with multiple firms. There is now an express prohibition in NI 31-103 on registered dealing, advising or associate advising representatives acting as a representative of more than one registered firm concurrently. However, representatives that registered with multiple firms prior to the effective date will be grandfathered from the prohibition. The 31-103 CP will provide new guidance on the factors that will be considered for granting exemptions from this prohibition.
  • More flexible proficiency requirements for chief compliance officers and dealing representatives. Chief compliance officers may take the Chief Compliance Officers exam as an alternative to the Partners', Directors' and Officers' (PDO) exam. Also, the CFA charter will now be an accepted alternative to the Canadian Securities Course in several individual registration categories.
  • Types of individuals who may be designated as an ultimate designated person. The CSA has narrowed the types of individuals who may be designated as a registrant's ultimate designated person. While an officer in charge of a division of a firm may be designated as the firm's UDP, 31-103 will require that such an officer may only be designated to the extent that the firm has significant other business activities.

Investment Fund Managers

  • Clarification of registration requirements for certain investment fund managers. The 31-103 CP has been revised to provide that in the situation where an investment fund is managed by a board of directors or one or more trustees, the investment fund itself may be considered the investment fund manager and therefore required to register, and to include the CSA's expectation that an investment fund manager that has delegated the fund management function to a registered affiliate will need to apply for an exemption from the registration requirement.
  • Trade confirmation requirements for redemption orders received directly from security holders. Registered investment fund managers will now be required to send a trade confirmation to a security holder when the investment fund manager executes a redemption order received directly from the security holder.
  • Changes to lending restrictions. Investment fund managers will no longer be prohibited from lending money to an investment fund it manages, provided that the loan is on a short term basis for the purpose of funding redemptions of the fund's securities or meeting expenses incurred by the investment fund in the normal course of its business.

Investment Dealers and Mutual Fund Dealers

  • Registrants that are members of SROs and registered in multiple categories. There are new clarifications of the NI 31-103 business conduct requirements that will apply to a firm that is a member of either IIROC or the Mutual Fund Dealers Association of Canada and is also registered in other categories. For example, a firm registered as an investment dealer (and therefore a member of IIROC) that is also registered as an investment fund manager does not have to satisfy the capital requirements prescribed in NI 31-103 for investment fund managers, so long as it satisfies IIROC capital requirements.

Foreign Dealers

  • Clients of firms relying upon the international dealer exemption must be Canadian. To clarify the CSA's intent that the international dealer exemption cannot be relied upon to trade with foreign clients, the defined term "permitted client" will now be modified in the exemption to apply only to "Canadian permitted clients."
  • Client Notice Requirements. There are non-substantive changes to the form of notice that, going forward, must be provided to clients by a firm that is relying upon the international dealer exemption.
  • Notice of continued reliance on the international dealer exemption. Previously, a firm relying upon the international dealer exemption was required to notify the local securities regulator of its continued reliance on the exemption on each anniversary of first perfecting the exemption. NI 31-103 will now require that the notice of continued reliance on the exemption be given on December 1 of each year.

Foreign Advisers

  • Changes to the international adviser exemption that mirror changes to the international dealer exemption. The international adviser exemption has been modified to mirror the changes to the international dealer exemption described above.
  • Guidance on meaning of "incidental advice" on Canadian securities. A foreign firm is not permitted to use the international adviser exemption to provide advice on securities of Canadian issuers, unless providing that advice is incidental to its providing advice on a foreign security. The 31-103 CP is being revised to clarify that "incidental advice" is not a quantitative concept that permits some portion of a permitted client's portfolio to be invested in Canadian securities, but rather permits advising on Canadian securities that is directly related to advising on foreign securities.  For example, it would be permitted to advise on Canadian securities if such securities are an appropriately weighted component of a global advisory mandate, relative to Canada's economic position on a global basis.
  • Further delay in introduction of a sub-adviser exemption. Despite previous commitments of the CSA to revisit the proposed exemption for international advisers who act as sub-advisers to registered portfolio managers, no such exemption appears in the Amendments. The existing sub-adviser exemption will remain in force in Ontario through OSC Rule 35-502 – Non-Resident Advisers and in Québec through a blanket order exemption.

John Black focuses on corporate finance and securities regulatory matters, investment funds, asset management and mergers and acquisitions. Linda Currie's practice focuses on financial institution and securities regulatory and compliance matters relating to investment funds and asset management. Mark DesLauriers practises in the area of corporate and securities law, with particular emphasis on cross-border corporate finance, public company law, and the regulation of securities dealers and advisers. Blair Wiley's practice focuses on mergers and acquisitions, corporate finance and general corporate matters.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

In association with
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at and we will use commercially reasonable efforts to determine and correct the problem promptly.