The pending amendments will, among other things, exclude
"futures contracts" from the definition of
"security" while introducing the concept of
"derivatives" (which will exclude any products that have
attributes of a derivative but are also a security, referred to as
"derivative-like securities") and exclude derivatives
from the prospectus requirement entirely. As a result, the new
blanket order will no longer provide a prospectus exemption for
However, in order to maintain the scope of the current
prospectus and registration exemptions of the existing Blanket
Order, the new blanket order will ensure that a prospectus
exemption will also be available for over-the-counter trades in
derivative-like securities and that a dealer registration exemption
will continue to be available for over-the-counter trades in
derivatives and derivative-like securities, in each case if (i) at
the time of the trade each counterparty was a qualified party; or
(ii) the trade was in a physical commodity contract.
The new blanket order is proposed to come into effect
concurrently with the amendments to Alberta's Securities Act
expected to come into force on October 31, 2014, and is intended
only as a stop-gap measure until the Canadian Securities Administrators can
harmonize the regulation of OTC-traded derivatives.
In light of the proposed new blanket order, parties should
ensure that their representations to qualified party status are
drafted broadly enough so as to capture the breadth of qualified
parties contemplated by the replacement blanket order.
The ASC is accepting comments on the proposal until October 17,
2014. For more information, see ASC Staff Notice 91-706.
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.
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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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