Impact on Canadian Registered and International Exempt Firms Effective January 11, 2015

The Canadian Securities Administrators (CSA) recently finalized amendments to National Instrument 31-103 Registration Requirements, Exemptions and Ongoing Registrant Obligations (NI 31-103) and its Companion Policy, as well as to certain related instruments, that were first published for comment in December 20131. The amendment package, published on October 16, 2014 [available here], makes technical adjustments as well as more substantive changes intended to establish the regulatory approaches on long-standing issues, resolve ambiguities and clarify regulatory intentions. The CSA made some welcome changes (primarily to provide additional clarity) to the final amendments in response to well over one hundred commentators, including comments submitted by Borden Ladner Gervais LLP.

In addition to amending NI 31-103, the CSA also amended National Instrument 33-109 Registration Information (NI 33-109) and its Companion Policy, as well as National Instrument 52-107 Acceptable Accounting Principles and Auditing Standards and its Companion Policy. 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.

Subject to governmental approvals, the amendments will be effective on January 11, 2015, although certain provisions have a six-month transition period.

  • Exempt market dealers will be limited in the activities that they may conduct. These restrictions will be effective July 11, 2015.
  • CCOs of all categories of registered dealer (except investment dealers) must have at least 12 months' of relevant experience.
  • International portfolio managers will be able to rely on a new nationally-consistent sub-adviser exemption.
  • A short-term debt exemption will be available to certain financial institutions, effective July 11, 2015.
  • Investment fund managers will need to report NAV adjustments using a new detailed 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 and any conflicts of interest raised by these activities must be managed.
  • Registrants must give notice in certain circumstances of acquisitions of securities of another registrant – including firms registered in "foreign jurisdictions". This latter addition is new.
  • 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 amendments to the Companion Policy, which provide greater clarity on regulatory expectations, and in some cases, enhance the base requirements of rules.

To read this article in full, please click here.


1. See Just in Time for the Holidays – Another Round of Significant Amendments Proposed for National Instrument 31-103 Investment Management Bulletin December 2013 Borden Ladner Gervais LLP.

About BLG

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.