Canada: Registration Of Non-Resident Investment Fund Managers In Canada

On July 5, 2012, the Canadian provinces of Ontario, Quebec and Newfoundland and Labrador (the Local Jurisdictions) announced that, pending ministerial approval, Multilateral Instrument 32-102 Registration Exemptions for Non-Resident Investment Fund Managers (MI 32-102) will come into force on September 28, 2012.

What is the effect of MI 32-102?

As a result of MI 32-102, non-resident investment fund managers that manage one or more investment funds that have distributed securities to residents of a Local Jurisdiction will have to register as an investment fund manager in that Local Jurisdiction unless an exemption from registration is available. The term "non-resident investment fund manager" includes investment fund managers that do not have:

  • their head office or their principal place of business in a jurisdiction of Canada (international investment fund managers); and
  • a place of business in the Local Jurisdiction (domestic non-resident investment fund managers).

What is an investment fund manager?

Investment fund managers are persons or companies that direct the business, operations or affairs of an investment fund. Note that private equity funds are not considered to be investment funds and therefore interests in private equity funds can be offered to Canadian investors without triggering any investment manager or investment advisor registration requirements. In Canada, a "private equity fund" is a fund that (i) does not permit its investors to voluntarily redeem their investment and (ii) invests for the purpose of:

  • exercising or seeking to exercise control of an issuer; or
  • being actively involved in the management of any issuer in which it invests.

What exemptions are available?

MI 32-102 contains two exemptions from the investment fund manager registration requirement.

No security holders or active solicitation

The investment fund manager registration requirement does not apply to a person or company acting as an investment fund manager to one or more investment funds if it does not have a place of business in the Local Jurisdiction and if one or more of the following apply:

  1. none of the investment funds have security holders in the Local Jurisdiction (even if the investment funds have distributed securities in the Local Jurisdiction in the past); or
  2. the person or company and the investment funds have not actively solicited residents in the Local Jurisdiction after September 27, 2012 (even if the investment funds have security holders in the Local Jurisdiction).

Active solicitation refers to intentional actions taken by the investment fund or the investment fund manager to encourage a purchase of the investment fund's securities, such as pro-active, targeted actions or communications that are initiated by an investment fund manager for the purpose of soliciting an investment. Actions that are undertaken by an investment fund manager at the request of, or in response to, an existing or prospective investor who initiates contact with the investment fund manager do not constitute active solicitation.

Thus, non-resident investment fund managers that do not actively solicit residents of a Local Jurisdiction after September 27, 2012, will not have to register in that Local Jurisdiction. Active solicitation prior to September 27, 2012, will not trigger the need to register.

Permitted clients

The investment fund manager registration requirement does not apply to an international investment fund manager if all securities of the investment fund distributed in the Local Jurisdiction were privately placed to "permitted clients," such as pension funds, governments, investment funds that are managed or advised by persons registered in a Canadian jurisdiction, companies with net assets of at least $25 million and individuals who beneficially own at least $5 million of financial assets (net of any related liabilities).

The permitted client exemption is only available if all of the following apply:

  1. the investment fund manager does not have its head office or its principal place of business in Canada;
  2. the investment fund manager is incorporated, formed or created under the laws of a foreign jurisdiction;
  3. the investment fund is not a reporting issuer in any jurisdiction of Canada;
  4. the investment fund manager has submitted to the relevant securities commission a completed "Submission to Jurisdiction and Appointment of Agent for Service for International Investment Fund Manager" form; and
  5. the investment fund manager has notified the permitted client in writing of all of the following:

a. the investment fund manager is not registered in the jurisdiction to act as an investment fund manager;

b. the foreign jurisdiction in which the head office or principal place of business of the investment fund manager is located;

c. all or substantially all of the assets of the investment fund manager may be situated outside of Canada;

d. there may be difficulty enforcing legal rights against the investment fund manager because of the above; and

e. the name and address of the agent for service of process of the investment fund manager in the jurisdiction.

In addition, an investment fund manager relying on the permitted client exemption must make certain initial and annual filings with the relevant securities commission and, in the case of non-resident investment fund managers that rely on the permitted client exemption in Ontario, pay annual fees based on Ontario revenues to the Ontario Securities Commission.

When do you need to register?

Non-resident investment fund managers that are required to register in a Local Jurisdiction will have to apply for registration by December 31, 2012.

What does registration entail?

If a non-resident investment fund manager is required to register in a Canadian jurisdiction then it must meet certain criteria, and once registered, it will have to comply with various regulatory requirements, including capital, insurance, financial reporting and proficiency requirements. Registered investment fund managers will also be subject to ongoing obligations to establish and maintain internal controls and risk management systems.

Is registration required in the other Canadian provinces and territories?

On July 5, 2012, the Canadian provinces of British Columbia, Alberta, Saskatchewan, Manitoba, Prince Edward Island, Nova Scotia and New Brunswick and the territories of Yukon, Nunavut and the Northwest Territories (collectively, the Ten Jurisdictions) announced that Multilateral Instrument 31-202 Registration Requirement for Investment Fund Managers (MI 31-202) is expected to become effective in those jurisdictions on September 28, 2012.

Pursuant to MI 31-202, registration as an investment fund manager is only required in the Ten Jurisdictions if an investment fund manager conducts investment fund manager activities in a jurisdiction that results in the investment manager directing or managing the business, operations or affairs of an investment fund in that jurisdiction. Functions or activities tied to the presence of security holders, solicitation of investors or the distribution of securities in a jurisdiction are not activities that would give rise to investment fund manager registration in the Ten Jurisdictions, unless they are directed from within the jurisdiction and result in the person directing or managing the business, operations or affairs of an investment fund in the jurisdiction. Additionally, when determining whether registration is necessary in the Ten Jurisdictions, one need only consider the activities carried out by the investment manager in the jurisdiction, not the activities carried out by any other service provider of an investment fund.

Norton Rose Group

Norton Rose Group is a leading international legal practice. We offer a full business law service to many of the world's pre-eminent financial institutions and corporations from offices in Europe, Asia, Australia, Canada, Africa, the Middle East, Latin America and Central Asia.

Knowing how our clients' businesses work and understanding what drives their industries is fundamental to us. Our lawyers share industry knowledge and sector expertise across borders, enabling us to support our clients anywhere in the world. We are strong in financial institutions; energy; infrastructure, mining and commodities; transport; technology and innovation; and pharmaceuticals and life sciences.

We have more than 2900 lawyers operating from 43 offices in Abu Dhabi, Almaty, Amsterdam, Athens, Bahrain, Bangkok, Beijing, Bogotá, Brisbane, Brussels, Calgary, Canberra, Cape Town, Caracas, Casablanca, Dubai, Durban, Frankfurt, Hamburg, Hong Kong, Johannesburg, London, Melbourne, Milan, Montréal, Moscow, Munich, Ottawa, Paris, Perth, Piraeus, Prague, Québec, Rome, Shanghai, Singapore, Sydney, Tokyo, Toronto and Warsaw; and from associate offices in Dar es Salaam, Ho Chi Minh City and Jakarta.

Norton Rose Group comprises Norton Rose LLP, Norton Rose Australia, Norton Rose Canada LLP, Norton Rose South Africa (incorporated as Deneys Reitz Inc), and their respective affiliates.

On January 1, 2012, Macleod Dixon joined Norton Rose Group adding strength and depth in Canada, Latin America and around the world. For more information please visit

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.

Similar Articles
Relevancy Powered by MondaqAI
In association with
Related Topics
Similar Articles
Relevancy Powered by MondaqAI
Related Articles
Related Video
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
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of

To Use you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

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 or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq 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 of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions