As part of a broader set of amendments which came into force earlier this year, as of July 11, 2015 exempt market dealers will no longer be permitted to engage in brokerage activities, including trading securities listed on an exchange in foreign or Canadian markets.
National Instrument 31-103 Registration Requirements, Exemptions and Ongoing Registrant Obligations (NI 31-103) regulates the activities in which registrants such as exempt market dealers may partake. Effective January 11, 2015, amendments to NI 31-103 were enacted to codify exemptive relief and narrow the scope of activities that are conducted by certain registrants. One of these amendments, which came into force on July 11, 2015, prohibits an exempt market dealer from trading a security if: (i) the security is listed, quoted or traded on a marketplace; and (ii) the trade in the security does not require reliance on a further exemption from the prospectus requirement. The Companion Policy to NI 31-103 further provides that exempt market dealers are not permitted to participate in a resale of securities traded on a domestic or foreign marketplace, whether on-exchange or off-exchange, unless the transaction requires further reliance on a prospectus exemption. Such prohibited activity includes establishing an omnibus account with an investment dealer and trading securities for clients through that account.
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