As was widely expected, National Instrument 31-103 Registration
Requirements and Exemptions became effective on September 28, 2009.
This means that the transition periods listed in Part 16 of
National Instrument 31-103 commenced as of that date. Registrants
need to be cognizant of all transition periods, particularly since
the first major transition period ends on December 28, 2009, by
which time all firms must report on the appointment of the Ultimate
Designated Person (UDP) and Chief Compliance Officer (CCO) and
complete the necessary filings. We emphasize that there are many
new or modified requirements in National Instrument 31-103 for
which there is no transition and registrants are expected to comply
with those requirements as of September 28, 2009.
Our Investment Management Advisories in our eight-part series
entitled Keeping Reforms in Sight: Understanding the New
Canadian Registration Requirements are available [here] and on our website www.blgcanada.com. You can
also access our National Instrument 31-103 At a Glance
publication [here]. Our Advisories explain the impact of
National Instrument 31-103 on the various types of financial
services firms that must be registered (or rely on registration
exemptions) to conduct securities-related activities in Canada.
Included are What's New commentaries for each of the
key registration categories and an outline of the implications of
National Instrument 31-103 for non-Canadian advisers and dealers
doing business in Canada.
Since National Instrument 31-103 was published in final form by
the Canadian Securities Administrators (CSA) in July 2009, we have
assisted our clients with understanding the implications of the new
rules on their operations and business. In so doing, we have
liaised extensively with the regulators to better understand the
positions taken by the CSA as reflected in National Instrument
31-103 and to raise significant issues that we believe the new
regime creates, often inadvertently, for registrants and other
firms in Canada.
We were successful in our submission, on behalf of clients, to
the staff of the Ontario Securities Commission (OSC), as principal
regulator, that it would be appropriate for the OSC to issue a
broad-based form of relief for international dealers (firms
registered in this category in Ontario prior to September 28,
2009), which was granted effective September 28, 2009. The OSC
granted relief to allow these firms to continue to trade in
specified Canadian government debt instruments with "permitted
clients" and to give them additional time to make the required
client disclosures about their reliance on the "international
dealer registration exemption" [order available here].
We also assisted the staff of the OSC in their efforts to grant
limited market dealers registered as such in Ontario and
Newfoundland/Labrador on September 28, 2009 (now
"mapped-over" exempt market dealers), with additional
transitional relief of one year in respect of the prescribed
financial reporting and of two years for the prescribed client
statements set out in National Instrument 31-103 [order available here].
We would be pleased to assist you in helping to understand the
implications of National Instrument 31-103 on your business and to
ensure that you understand what you must do to be in compliance
with the new requirements. If you have particular circumstances
where you believe an exemption would be warranted, or additional
transition is necessary, we would be pleased to discuss your
circumstances and provide you with our assessment on the likelihood
The CSA's long-standing expectations that firms put in place
robust compliance systems has been reinforced by National
Instrument 31-103. Many of the members of the CSA release reports
of their findings about compliance related matters. Please click [here] for the most recent
report of the staff of the British Columbia Securities Commission
and [here] for the 2009
Compliance Report of the staff of the Ontario Securities
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