National Instrument 31-103 Registration Requirements,
Exemptions and Ongoing Registrant Obligations (NI 31-103) and
its Companion Policy are facing the fifth round of amendments since
implementation in September 2009. The Canadian Securities
Administrators published proposed amendments to NI 31-103 and
related instruments on December 5, 2013 [available here] which range from technical
adjustments to more substantive measures intended to establish the
regulatory approaches on long-standing issues, resolve ambiguities
and clarify regulatory intentions.
In addition to proposed amendments to NI 31-103, the CSA also
propose amendments to National Instrument 33-109 Registration
Information (NI 33-109) and its Companion Policy and National
Instrument 52-107 Acceptable Accounting Principles and Auditing
Standards and its Companion Policy. Proposed amendments to OSC
Rule 33-506 (Commodity Futures Act) Registration
Information and its Companion Policy mirror the amendments to the
various registration related forms in NI 33-109.
The comment period on this latest package of proposed
amendments ends March 5, 2014.
There is something for everyone in the proposed amendments.
Exempt market dealers will be particularly impacted by the
proposal to significantly limit the activities that they may
CCOs of all categories of registered dealer (except investment
dealers) will be subject to enhanced proficiency requirements.
International portfolio managers will be able to rely on a new
nationally-consistent "sub-adviser" exemption.
Exempt international firms (international advisers and
international dealers) will not be able to register in one
province, while relying on the applicable registration exemptions
in other jurisdictions.
A short-term debt exemption will be available to certain
Investment fund managers will need to report NAV adjustments
using a new form.
Firm representatives who serve on the boards of reporting
issuers or have outside business activities, including
"positions of influence", will have enhanced disclosure
obligations, as well as expectations on management of the conflicts
of interest raised by these activities.
All registrants will use updated registration-related forms to
provide information to the regulators.
As with the existing iteration of NI 31-103, it is particularly
important to review the new proposed provisions of the Companion
Policy, which provide greater clarity on regulatory expectations,
and in some cases, enhance the base requirements of rules.
BLG's latest Investment Management Bulletin Just in Time
for the Holidays - Another Round of Significant Amendments
Proposed for National Instrument 31-103 [
available here] provides more detail on the new proposals and
describes the expected impact on market participants.
The Canadian Office of the Superintendent of Financial Institutions ("OSFI") recently ruled that a bank cannot promote comprehensive credit insurance ("CCI") within its Canadian branches under the Insurance Business (Banks and Bank Holdings Companies) Regulations (the "Regulations").
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