Canada: CSA Issue Orders Exempting Registrants From Certain Provisions Of NI 31-103

On February 26, 2010, members of the Canadian Securities Administrators (http://www.securities-administrators.ca) (CSA) each issued omnibus/blanket orders in response to applications requesting exemptions from certain provisions of National Instrument 31-103 Registration Requirements and Exemptions (http://www.osc.gov.on.ca/en/13596.htm) (31-103). 31-103, together with amendments to related instruments and policies, came into effect on September 28, 2009 (the Effective Date). Notice of these orders was provided under CSA Staff Notice 31-315 Omnibus/Blanket Orders exempting registrants from certain provisions of National Instrument 31-103 Registration Requirements and Exemptions (http://www.osc.gov.on.ca/en/27176.htm) , which was also published on February 26, 2010. The orders are summarized below.

Continuation of transition/grandfathering provisions for registrants adding jurisdiction

Each regulator issued an order that provides a person or company adding a jurisdiction to his, her or its registration, with the benefit of certain grandfathering and transition provisions provided under Part 16 of 31-103 in that additional jurisdiction. Specifically, those grandfathering and transition provisions that deal with proficiency, capital, insurance, relationship disclosure information, referral arrangements, dispute resolution service and client statement requirements were included in the order. To rely on the order, the registrant must: (i) have been continuously registered in a jurisdiction in Canada since the Effective Date; (ii) remain registered in that jurisdiction during its reliance on the order; (iii) be exempt under the relevant section of Part 16 in that jurisdiction; and (iv) register, after the Effective Date, in the same category of registration (and in the case of an individual, with the same sponsoring firm) in an additional jurisdiction.

Exemption from chief compliance officer proficiency requirements for portfolio manager adding a category

Under Part 3 of 31-103, an individual who satisfies the proficiency requirements for a chief compliance officer (CCO) of a portfolio manager (PM), also satisfies the proficiency requirements for a CCO of a mutual fund dealer (MFD), exempt market dealer (EMD) and investment fund manager (IFM). Each regulator issued an order providing a CCO of a PM whose proficiency is grandfathered under subsection 16.9(2) of 31-103 with an exemption from the proficiency requirements applicable to a CCO of an MFD, EMD or IFM where the firm was registered as a PM on the Effective Date and the individual was designated as the firm's CCO on the Effective Date and remains so registered.

Exemption from dealing representative proficiency requirements for portfolio manager adding mutual fund dealer or exempt market dealer category

Under Part 3 of 31-103, an individual who satisfies the proficiency requirements for an advising representative of a PM also satisfies the proficiency requirements for a dealing representative of an MFD and EMD. Each regulator issued an order providing an advising representative of a PM whose proficiency is grandfathered under subsection 16.10(1) of 31-103 with an exemption from the proficiency requirements applicable to a dealing representative of an MFD and EMD.

Exemption from time limits on examination requirements for certain dealing representatives

Pursuant to section 16.10 of 31-103, a dealing representative of a scholarship plan dealer (SPD) registered since the Effective Date and, in Ontario and Newfoundland and Labrador, a dealing representative of an EMD registered since the Effective Date, has until September 28, 2010 to meet applicable proficiency requirements under Part 3 of 31-103. Section 3.3 of 31-103 deems an individual to not have passed an examination or successfully completed a program unless such examination or program was passed or completed within a prescribed period of time prior to the individual applying for registration. Each regulator issued an order exempting dealing representatives of an SPD registered since the Effective Date and, in Ontario and Newfoundland and Labrador, dealing representatives of an EMD registered since the Effective Date, from the time limits under section 3.3 of 31-103.

Exemption from client notification requirements under section 14.5 of 31-103 for certain registrants with physical place of business in local jurisdiction

Section 14.5 of 31-103 requires a registrant with no head office in a local jurisdiction to provide its clients with prescribed written disclosure relating to the potential difficulty for the client to obtain civil remedies against the registrant in the local jurisdiction. Each regulator issued an order that exempts a registrant with a head office in Canada and a physical place of business in the local jurisdiction from the client disclosure requirements under section 14.5.

Exemption from requirement to establish whether client an insider under section 13.2 of 31-103 for mutual fund dealers

Subsection 13.2(2)(b) of 31-103 requires that a registrant take reasonable steps to establish whether a client is an insider of a reporting issuer or any other issuer whose securities are publicly traded. Each regulator issued an order exempting mutual fund dealers from this requirement.

Previously issued omnibus/blanket orders

Transitional relief for previously registered international dealers in respect of Canadian debt securities

On September 25, 2009, the Ontario Securities Commission (OSC) issued an order, effective in Ontario and Newfoundland and Labrador, providing certain transitional relief under 31-103 to dealers formerly registered as international dealers in Ontario and/or Newfoundland. The order permits dealers formerly registered as international dealers to continue to trade in Canadian debt securities outside of a distribution of the securities with designated institutions (as that term was defined prior to the Effective Date under section 204 of Ontario Regulation 1015) for a transition period of one year, expiring on September 28, 2010. The order also provides for a transition period of six months, expiring March 31, 2010 for dealers relying on the order to provide clients with prescribed written disclosure relating to clients' potential difficulty in obtaining civil remedies against the registrant in the local jurisdiction. To rely on the order, a dealer must: (i) have been formerly registered as an international dealer; (ii) have filed with the regulators a Form 31-103F2 Submission to Jurisdiction and Appointment of Agent for Service (http://www.osc.gov.on.ca/documents/en/Securities-Category3/31-103F2.pdf), together with an indication of its intention to rely on the order; and (iii) fulfill the conditions set out in subsection 8.18(3) (a) – (d) of 31-103.

Transitional relief for exempt market dealers in respect of financial reporting and client statements

On September 28, 2009, the OSC issued an order, effective in Ontario and Newfoundland and Labrador, providing certain transitional relief to former limited market dealers "mapped-over" to the EMD category. (There was an amendment to this order on February 19, 2010 to correct a drafting oversight). The order provides a transition period of one year, expiring on September 28, 2010, to former limited market dealers "mapped-over" to the EMD category from the financial reporting requirements under subsection 12.12(1) of 31-103. This transitional relief can only be relied upon if the EMD is not registered in any other category of registration in Ontario and Newfoundland and Labrador, other than a former international adviser "mapped-over" to the PM category. The order also provides a transition period of two years, expiring on September 28, 2011, to former limited market dealers "mapped-over" to the EMD category from the client statement requirements under section 14.14 of 31-103. This transitional relief can only be relied upon if the EMD is not registered in any other category of registration in Ontario and Newfoundland and Labrador, other than a "mapped-over" MFD, investment fund manager, or former international adviser "mapped-over" to the PM category.

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 Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
 
In association with
Related Topics
 
Related Articles
 
Related Video
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
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
Password
Confirm Password
Position
Mondaq Topics -- Select your Interests
 Accounting
 Anti-trust
 Commercial
 Compliance
 Consumer
 Criminal
 Employment
 Energy
 Environment
 Family
 Finance
 Government
 Healthcare
 Immigration
 Insolvency
 Insurance
 International
 IP
 Law Performance
 Law Practice
 Litigation
 Media & IT
 Privacy
 Real Estate
 Strategy
 Tax
 Technology
 Transport
 Wealth Mgt
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
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

Mondaq.com (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 www.mondaq.com

To Use Mondaq.com 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.

Disclaimer

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.

General

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