The complex securities regulatory landscape for firms registered as portfolio managers, dealers and investment fund managers continues to evolve at a rapid pace as evidenced by the number of publications issued by the securities regulators in both Canada and the United States in recent weeks and those expected to be published over the summer and into the fall.

In this Bulletin, we briefly outline the various publications to allow industry participants to easily keep track of the recent regulatory developments over the coming months.

Please click on the links provided to access our more detailed Bulletins on the various initiatives or to review the regulatory publications directly.

 

AMENDMENTS TO NATIONAL INSTRUMENT 31-103

REGISTRATION REQUIREMENTS AND EXEMPTIONS

 

"First-Year Amendments" to NI 31-103 finalized on April 15, 2011 [available here]

 

July 11, 2011 – Amendments effective (subject to governmental approvals)

 

BLG's Investment Management Bulletin The Continuing Evolution of the Canadian Registration Regime: First-Year Amendments to National Instrument 31-103 Finalized Borden Ladner Gervais LLP May 2011

 

 

Proposed amendments to provide for additional exemptions from NI 31-103 for SRO members published for comment on May 13, 2011 [available here]

 

July 18, 2011 – Comment period ends

 

Proposed amendments to provide for enhanced performance and costs reporting by registrants published for comment June 22, 2011[available here]

 

September 23, 2011 – Comment period ends

 

Please watch for our more detailed Bulletin on these proposed requirements

 

(Expected) proposed amendments to require additional registration of investment fund managers

 

Fall 2011 – additional publication for comment of proposed amendments (expected

 

BLG's Investment Management Bulletin Canadian Securities Regulators Propose Registration for Non-resident Investment Fund Managers Borden Ladner Gervais LLP November 2010

(Expected) proposed amendments or additional guidance about dispute resolution requirement

Fall 2011 – additional publication for comment of amendments or additional guidance about section 13.16 of NI 31-103 (expected)

Implementation of section 13.16 deferred until September 28, 2012

OTHER CANADIAN REGULATORY PROPOSALS IMPACTING REGISTRANTS

Proposed securitized products regime, including new restrictions on distribution in the exempt marketplace [available here]

August 31, 2011 – Comment period ends (extended from July 1, 2011

BLG's Securities & Capital Markets Alert New Securitized Products Rules Proposed Borden Ladner Gervais LLP April 2011

CSA Consultation Paper 91-401 Over-the-Counter Derivatives Regulation in Canada November 2010 [available here]

 

CSA Consultation Papers 91-402 Derivatives: Trade Repositories June 2011 [available here].

Consultation Paper 91-402 is one of eight consultation papers to be published by the CSA on the Canadian derivatives regime. Other consultation papers expected to be published.

January 14, 2011 – Comment period ended on Consultation Paper 91-401

 

 

September 12, 2011 – Comment period ends on Consultation Paper 91-402

BLG's Financial Services Client Update Over-the-Counter (OTC) Derivatives Market in Canada: On the Road to Reform and Regulation Borden Ladner Gervais LLP November 2010

CSA proposals regarding electronic trading and direct access to marketplaces – Proposed National Instrument 23-103 Electronic Trading and Direct Electronic Access to Marketplaces April 8, 2011 [available here]

July 8, 2011 – Comment period ends

(Expected) Publication extending exemption for Canadian financial institutions trading in short-term commercial paper [current exemption available here]

September 28, 2011 – Current dealer registration exemption ends, but the exemption is expected to be extended

RECENT ADDITIONAL REGULATORY GUIDANCE FOR REGISTRANTS

OSC Staff Notice 33-735 Sale of Exempt Securities to Non-Accredited Investors May 13, 2011[available here]

Reminder to issuers and registrants about using the accredited investor exemption

CSA Staff Notice 31-324 Exempt Market Dealers and Account Statement Requirements in NI 31-103 June 22, 2011 [available here]

Guidance for EMDs on CSA expectations regarding account statements. Further requirements for the account statements of EMDs expected

CSA Staff Notice 31-323 Guidance Relating to the Registration Obligations of Mortgage

Investment Entities February 2011 [available here]

Guidance on application of registration requirement to mortgage investment corporations (MICs), mortgage syndications and other mortgage investment entities

BC Instrument 32-517 Exemption from Dealer Registration Requirement for Trades in Securities of Mortgage Investment Entities [available here]

Extends conditional BC dealer registration relief to March 31, 2012

BLG's Investment Management Bulletin Securities Regulators Provide Guidance on Registration Obligations for Mortgage Investment Entities Borden Ladner Gervais LLP March 2011

CSA Staff Notice 31-325 Marketing Practices of Portfolio Managers July 5, 2011 [available here]

Guidance for portfolio managers on various issues regarding marketing of products and services, including use of performance disclosure and guidance for use of social media for marketing purposes. Guidance updates earlier guidance provided by OSC staff in 2007 on similar topics

IIROC DEVELOPMENTS

IIROC proposals addressing relationship disclosure information (RDI), enhanced account performance reporting and other "client relationship model" rules (CRM) published for comment in January 2011 (IIROC Rules Notice 11-0005 [available here].

Fall 2011 – Final IIROC CRM rules expected. CSA likely to extend current exemption from NI 31-103 requirements re RDI for IIROC members past September 28, 2011

IIROC proposals regarding changes to rules on personal financial dealing and outside business activities published for comment in May 2011 (IIROC Rules Notice 11-0150 [available here]) and IIROC Rules Notice 10-0155 [available here])

July 11, 2011 – Comment period ends on both proposals.

MFDA DEVELOPMENTS

MFDA rules requiring relationship disclosure information to be provided to new and existing clients (MFDA MR 0075 [available here])

September 28, 2011 – Rules in force for new clients, with three-year transition period (ending December 3, 2013) for delivery of RDI to existing clients

MFDA rules requiring cost and performance reporting disclosure (MFDA MR 0076 [available here])

June 3, 2012 – Transition period ends and rules in force for all clients

Consultation paper on the use of third party back-office service providers [available here]

September 30, 2011 – Comment period ends

(Expected) AMF harmonization of rules applicable to mutual fund dealers operating in Québec

September 28, 2011 – Deadline extended, but no date established

BLG's Investment Management Bulletin AMF Consultation on Harmonizing Regulation of Québec Mutual Fund Dealers Borden Ladner Gervais LLP October 2010

DODD-FRANK" REGULATORY DEVELOPMENTS – UNITED STATES

On June 22, 2011, the U.S. Securities and Exchange Commission finalized amendments of rules under the U.S. Investment Advisers Act of 1940 (Advisers Act) designed to implement provisions of Title IV of the Dodd-Frank Wall Street Reform and Consumer Protection Act regarding the registration of firms as investment advisers with the SEC and new exemptions for (among other things) firms that are advisers to "venture capital funds" and/or "qualifying private funds" or that are "foreign private advisers" [SEC rules available here]

March 30, 2012 – New deadline for registration under the Advisers Act for certain firms that are presently relying on the "private funds" exemption from registration under the Advisers Act (the "private funds" exemption will be eliminated under Dodd-Frank effective July 21, 2011)

Firms already registered under the Advisers Act and firms that will rely on new "venture capital fund" and/or "qualifying private fund" exemptions have until March 30, 2012 to file required disclosure forms
   
About BLG

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.