Alberta Gazette, Part I — Tuesday, September 15, 2009
Tuesday, September 15, 2009
Alberta — Gazette
The Alberta Gazette
Part I
Vol. 105 Edmonton, Tuesday, September 15, 2009 No. 17
GOVERNMENT NOTICES
Agriculture and Rural Development
Form 15
(Irrigation Districts Act)
(Section 88)
Notice to Irrigation Secretariat:
Change of Area of an Irrigation District
On behalf of the Western Irrigation District, I hereby request that the Irrigation
Secretariat forward a certified copy of this notice to the Registrar for Land Titles for
the purposes of registration under
section 22 of the Land Titles Act and arrange for
notice to be published in the Alberta Gazette.
The following parcels of land should be added to the irrigation district and the
notation added to the certificate of title:
LINC Number
Short Legal Description as shown on title
Title Number
0022 142 079
4;21;22;8;NW
081 003 663
0022 142 087
4;21;22;8;SW
081 003 663
I certify the procedures required under
part 4 of the Irrigation Districts Act have been
completed and the area of the Western Irrigation District should be changed
according to the above list.
Rebecca Fast, Office Administrator,
Irrigation Secretariat.
______________
On behalf of the Western Irrigation District, I hereby request that the Irrigation
Secretariat forward a certified copy of this notice to the Registrar for Land Titles for
the purposes of registration under
section 22 of the Land Titles Act and arrange for
notice to be published in the Alberta Gazette.
The following parcels of land should be removed from the irrigation district and the
notation removed from the certificate of title:
LINC Number
Short Legal Description as shown on title
Title Number
0022 075 940
4;22;22;7;NE
041 418 086
0026 648 345
4;22;22;8;NW,SW,NE
041 418 086 + 2
I certify the procedures required under
part 4 of the Irrigation Districts Act have been
completed and the area of the Western Irrigation District should be changed
according to the above list.
Rebecca Fast, Office Administrator,
Irrigation Secretariat.
Culture and Community Spirit
Hosting Expenses Exceeding $600.00
For the Period April 1, 2009 to June 30, 2009
Function: Alberta Foundation for the Arts (AFA) Reception and Board Chair
Farewell
Date: May 14, 2009
Amount: $4,314.00
Purpose: For AFA board members to meet with the arts community and to host a
farewell for the AFA Chair,
Location: Hotel Arts, Calgary, AB
BU #: 027
Function: Media Launch for Alberta Arts Days
Date: June 2, 2009
Amount: $1,953.00
Purpose: To promote and raise awareness of September 18-20, 2009 Arts Days.
Location: Legislature Grounds, Edmonton, AB
BU #: 022
Function: History Road
Date: June 13 and 14, 2009
Amount: $1,168.14
Purpose: To provide refreshments for the volunteers assisting with the 2009 History
Road event.
Location: Reynolds-Alberta Museum, Wetaskiwin, AB
BU #: 024
Order Designating Provincial Historic Resource
(Historical Resources Act)
File: Des. 2269
MO 50/09
I, Lindsay Blackett, Minister of Culture and Community Spirit pursuant to
section 20
(1) of the Historical Resources Act, RSA 2000 cH-9, hereby:
1. Designate the site known as the:
Markerville Lutheran Church, together with the land legally described as:
Plan RN21 (XXI), Block 5, Lot 1A, excepting thereout all mines and minerals
and municipally located Markerville, Alberta
as a Provincial Historic Resource,
2. Give notice that pursuant to
section 20, subsection (9) of that Act, no person shall
destroy, disturb, alter, restore, or repair any Provincial Historic Resource or
remove any historic object from a Provincial Historic Resource without the
written approval of the Minister.
3. Further give notice that the following provisions of
section 20, subsections
(11) and (12) of that Act now apply in case of sale or inheritance of the above
mentioned resource:
(11) the owner of an historic resource that is subject to an order under
subsection (1) shall, at least 30 days before any sale or other disposition of
the historic resource, serve notice of the proposed sale or other disposition
on the Minister,
(12) when a person inherits an historic resource that is subject to an order
under subsection (1), that person shall notify the Minister of the
inheritance within 15 days after the historic resource is transferred to the
person.
Signed at Edmonton, August 26, 2009.
Lindsay Blackett, Minister.
Finance and Enterprise
Insurance Notice
(Insurance Act)
Notice is hereby given that effective July 21, 2009 the Alberta license for
Washington National Insurance Company has been cancelled pursuant to
section
51 of the Insurance Act.
Arthur Hagan, FCIP, CRM
Deputy Superintendent of Insurance.
_______________
Effective June 26, 2009, Zurich Insurance Company changed its name to Zurich
Insurance Company Ltd.
Arthur Hagan, FCIP, CRM
Deputy Superintendent of Insurance.
International and Intergovernmental Relations
Hosting Expenses Exceeding $600.00
For the first quarter ending June 30, 2009
Date: March 16, 2009
Purpose: Networking event with Seoul Metropolitan Office of Education to promote
Alberta education.
Amount: $959.37
Location: Seoul, South Korea
Date: April 26, 2009
Purpose: Dinner for participants of the Pacific North West Economic Region
(PNWER) legislators visit to Alberta
Amount: $971.41
Location: Edmonton, Alberta
Date: April 28, 2009
Purpose: Reception at the annual CAPC - Alberta Petroleum Centre board meeting.
Amount: $1,088.90
Location: Hangzhou, China
Justice and Attorney General
Office of the Public Trustee
Property being held by the Public Trustee for a period of Ten
(10) Years
(Public Trustee Act)
Section 11 (2)(
b) Name of Person Entitled to Money (if known):
Unknown
Description of Property held and its value or
estimated value:
Cash on hand
$14,809.00
If property was part of deceased person's
estate,
Deceased's Name
Judicial District
Court File Number
Estate of Jacques Paquette
Calgary
If Property was held under court order,
Judicial District
Court File Number
Additional Information that the Public Trustee
considers appropriate
Safety Codes Council
Agency Accreditation
(Safety Codes Act)
Pursuant to
section 30 of the Safety Codes Act it is hereby ordered that
Rocky View County, Accreditation No. A000840, Order No. 2707
provide services under the Safety Codes Act for Building
Consisting of all parts of the Alberta Building Code, including applicable Alberta
amendments and regulations.
Accredited Date: August 25, 2009 Issued Date: August 25, 2009.
Pursuant to
section 30 of the Safety Codes Act it is hereby ordered that
Rocky View County, Accreditation No. A000840, Order No. 2708
provide services under the Safety Codes Act for Electrical
Consisting of all parts of the Canadian Electrical Code, Code for Electrical
Installations at Oil & Gas Facilities and Alberta Electrical Utility Code.
Accredited Date: August 25, 2009 Issued Date: August 25, 2009.
_______________
Pursuant to
section 30 of the Safety Codes Act it is hereby ordered that
Rocky View County, Accreditation No. A000840, Order No. 2709
provide services under the Safety Codes Act for Gas
Consisting of all parts of the Natural Gas and Propane Installation Code and Propane
Storage and Handling Code including applicable Alberta amendments and
regulations.
Accredited Date: August 25, 2009 Issued Date: August 25, 2009.
_______________
Pursuant to
section 30 of the Safety Codes Act it is hereby ordered that
Rocky View County, Accreditation No. A000840, Order No. 2710
provide services under the Safety Codes Act for Plumbing
Consisting of all parts of the National Plumbing Code and Alberta Private Sewage
Systems Standard of Practice including applicable Alberta amendments and
regulations.
Accredited Date: August 25, 2009 Issued Date: August 25, 2009.
_______________
Pursuant to
section 30 of the Safety Codes Act it is hereby ordered that
Dynamysk Automation, Accreditation No. A000841, Order No. 2711
provide services under the Safety Codes Act for Electrical
Consisting of all parts of the Canadian Electrical Code, Code for Electrical
Installations at Oil & Gas Facilities and Alberta Electrical Utility Code. Including
applicable Alberta amendments and regulations.
Accredited Date: August 28, 2009 Issued Date: August 31, 2009.
Alberta Securities Commission
NATIONAL INSTRUMENT 31-103
REGISTRATION REQUIREMENTS AND EXEMPTIONS
(Securities Act)
Made as a rule by the Alberta Securities Commission on July 8, 2009 pursuant to
sections 223 and 224 of the Securities Act.
TABLE OF CONTENTS
PART TITLE
PART 1 -
INTERPRETATION
1.1
Definitions of terms used throughout this Instrument
1.2
Interpretation of "securities" in Alberta, British Columbia,
New Brunswick and Saskatchewan
1.3 Information may be given to the Principal Regulator
Individual
Registration
PART 2 - CATEGORIES OF REGISTRATION FOR
INDIVIDUALS
2.1 Individual Categories
2.2 Client Mobility Exemption - Individuals
2.3 Individuals Acting for Investment Fund Managers
PART 3 - REGISTRATION REQUIREMENTS -
INDIVIDUALS
Division 1 General Proficiency Requirements
3.1
Definitions
3.2 U.S. Equivalency
3.3 Time Limits on Examination Requirements
Division 2 Education and experience requirements
3.4 Proficiency - Initial and Ongoing
3.5 Mutual Fund Dealer - Dealing Representative
3.6 Mutual Fund Dealer - Chief Compliance Officer
3.7 Scholarship Plan Dealer - Dealing Representative
3.8 Scholarship Plan Dealer - Chief Compliance Officer
3.9 Exempt Market Dealer - Dealing Representative
3.10 Exempt Market Dealer - Chief Compliance Officer
3.11 Portfolio Manager - Advising Representative
3.12 Portfolio Manager - Associate Advising Representative
3.13 Portfolio Manager - Chief Compliance Officer
3.14 Investment Fund Manager - Chief Compliance Officer
Division 3 Membership in a Self-Regulatory Organization
3.15 Who must be Approved by an SRO before Registration
3.16 Exemptions from Certain Requirements for SRO-Approved
Persons
PART 4 - RESTRICTIONS ON REGISTERED
INDIVIDUALS
4.1 Restriction on Acting for another Registered Firm
4.2 Associate Advising Representatives - Pre-Approval of Advice
PART 5 - ULTIMATE DESIGNATED PERSON AND
CHIEF COMPLIANCE OFFICER
5.1 Responsibilities of the Ultimate Designated Person
5.2 Responsibilities of the Chief Compliance Officer
PART 6 - SUSPENSION AND REVOCATION OF
REGISTRATION - INDIVIDUALS
6.1 If Individual Ceases to have Authority to Act for Firm
6.2 If IIROC Approval is Revoked or Suspended
6.3 If MFDA Approval is Revoked or Suspended
6.4 If Sponsoring Firm is Suspended
6.5 Dealing and Advising Activities Suspended
6.6 Revocation of a Suspended Registration - Individual
6.7 Exception for Individuals Involved in a Hearing
6.8 Application of
Part 6 in Ontario
Firm
Registration
PART 7 - CATEGORIES OF REGISTRATION FOR FIRMS
7.1 Dealer Categories
7.2 Adviser Categories
7.3 Investment Fund Manager Category
PART 8 - EXEMPTIONS FROM THE REQUIREMENT TO
REGISTER
Division 1 Exemptions from Dealer and Underwriter
Registration
8.1
Interpretation of "trade" in Qu‚bec
8.2 Definition of "securities" in Alberta, British Columbia, New
Brunswick and Saskatchewan
8.3
Interpretation - Exemption from Underwriter Registration
Requirement
8.4 Person or Company not in the business of Trading in British
Columbia, Manitoba and New Brunswick
8.5 Trades Through or to a Registered Dealer
8.6 Adviser - Non-Prospectus Qualified Investment Fund
8.7 Investment Fund Reinvestment
8.8 Additional Investment in Investment Funds
8.9 Additional Investment in Investment Funds if Initial Purchase
before September 14, 2005
8.10 Private Investment Club
8.11 Private Investment Fund - Loan and Trust Pools
8.12 Mortgages
8.13 Personal Property Security Legislation
8.14 Variable Insurance Contract
8.15
Schedule III Banks and Cooperative Associations - Evidence
of Deposit
8.16 Plan Administrator
8.17 Reinvestment Plan
8.18 International Dealer
8.19 Self-Directed Registered Education Savings Plan
8.20 Exchange Contract - Alberta, British Columbia, New
Brunswick and Saskatchewan
8.21 Specified Debt
8.22 Small Security Holder Selling and Purchase Arrangements
Division 2 Exemptions from Adviser Registration
8.23 Dealer Without Discretionary Authority
8.24 IIROC Members with Discretionary Authority
8.25 Advising Generally
8.26 International Adviser
Division 3 Exemptions from Investment Fund Manager Registration
8.27 Private Investment Club
8.28 Capital Accumulation Plan Exemption
8.29 Private Investment Fund - Loan and Trust Pools
Division 4 Mobility Exemption - Firms
8.30 Client Mobility Exemption - Firms
PART 9 - MEMBERSHIP IN A SELF-REGULATORY
ORGANIZATION
9.1 IIROC Membership for Investment Dealers
9.2 MFDA Membership for Mutual Fund Dealers
9.3 Exemptions from Certain Requirements for SRO Members
PART 10 - SUSPENSION AND REVOCATION OF
REGISTRATION - FIRMS
Division 1 When a Firm's Registration is Suspended
10.1 Failure to Pay Fees
10.2 If IIROC Membership is Revoked or Suspended
10.3 If MFDA Membership is Revoked or Suspended
10.4 Activities not Permitted while a Firm's Registration is
Suspended
Division 2 Revoking a Firm's Registration
10.5 Revocation of a Suspended Registration - Firm
10.6 Exception for Firms Involved in a Hearing
10.7 Application of
Part 10 in Ontario
Business
Operations
PART 11 - INTERNAL CONTROLS AND SYSTEMS
Division 1 Compliance
11.1 Compliance System
11.2 Designating an Ultimate Designated Person
11.3 Designating a Chief Compliance Officer
11.4 Providing Access to Board
Division 2 Books and Records
11.5 General Requirements for Records
Division 3 Certain Business Transactions
11.7 Tied Settling of Securities Transactions
11.8 Tied Selling
11.9 Registrant Acquiring a Registered Firm's Securities or Assets
11.10 Registered Firm whose Securities are Acquired
PART 12 - FINANCIAL CONDITION
Division 1 Working Capital
12.1 Capital Requirements
12.2 Notifying the Regulator of a Subordination Agreement
Division 2 Insurance
12.3 Insurance - Dealer
12.4 Insurance - Adviser
12.5 Insurance - Investment Fund Manager
12.6 Global Bonding or Insurance
12.7 Notifying the Regulator of a Change, Claim or Cancellation
Division 3 Audits
12.8 Direction by a Regulator to Conduct an Audit or Review
12.9 Co-operating with the Auditor
Division 4 Financial Reporting
12.10 Annual Financial Statements
12.11 Interim Financial Information
12.12 Delivering Financial Information - Dealer
12.13 Delivering Financial Information - Adviser
12.14 Delivering Financial Information - Investment Fund Manager
Client
Relationships
PART 13 - DEALING WITH CLIENTS - INDIVIDUALS
AND FIRMS
Division 1 Know your Client and Suitability
13.1 Investment Fund Managers Exempt from this Division
13.2 Know your Client
13.3 Suitability
Division 2 Conflicts of Interest
13.4 Identifying and Responding to Conflicts of Interest
13.5 Restrictions on Certain Managed Account Transactions
13.6 Disclosure when Recommending Related or Connected
Securities
Division 3 Referral Arrangements
13.7
Definitions - Referral Arrangements
13.8 Permitted Referral Arrangements
13.9 Verifying the Qualifications of the Person or Company
Receiving the Referral
13.10 Disclosing Referral Arrangements to Clients
13.11 Referral Arrangements before this Instrument came into Force
Division 4 Loans and Margin
13.12 Restriction on Lending to Clients
13.13 Disclosure when Recommending the use of Borrowed Money
Division 5 Complaints
13.14 Application of this Division
13.15 Handling Complaints
13.16 Dispute Resolution Service
PART 14 - HANDLING CLIENT ACCOUNTS - FIRMS
Division 1 Exemption for Investment Fund Managers
14.1 Investment Fund Managers Exempt from
Part 14
Division 2 Disclosure to clients
14.2 Relationship Disclosure Information
14.3 Disclosure to Clients about the Fair Allocation of Investment
Opportunities
14.4 When the Firm has a Relationship with a Financial Institution
14.5 Notice to Clients by Non-Resident Registrants
Division 3 Client assets
14.6 Holding Client Assets in Trust
14.7 Holding Client Assets - Non-Resident Registrants
14.8 Securities Subject to a Safekeeping Agreement
14.9 Securities Not Subject to a Safekeeping Agreement
Division 4 Client Accounts
14.10 Allocating Investment Opportunities Fairly
14.11 Selling or Assigning Client Accounts
Division 5 Account Activity Reporting
14.12 Content and Delivery of Trade Confirmation
14.13 Semi-Annual Confirmations for Certain Automatic Plans
14.14 Client Statements
Exemption
from this
Instrument
PART 15 - GRANTING AN EXEMPTION
15.1 Who can Grant an Exemption
Transition
and Timing
PART 16 - TRANSITION
16.1 Change of Registration Categories - Individuals
16.2 Change of Registration Categories - Firms
16.3 Change of Registration Categories - Limited Market Dealers
16.4 Registration for Investment Fund Managers Active when this
Instrument comes into Force
16.5 Temporary Exemption for Canadian Investment Fund
Manager Registered in its Principal Jurisdiction
16.6 Temporary Exemption for Foreign Investment Fund Managers
16.7 Registration of Exempt Market Dealers
16.8 Registration of Ultimate Designated Persons
16.9 Registration of Chief Compliance Officers
16.10 Proficiency for Dealing and Advising Representatives
16.11 Capital Requirements
16.12 Continuation of Existing Discretionary Relief
16.13 Insurance Requirements
16.14 Relationship Disclosure Information
16.15 Referral Arrangements
16.16 Complaint Handling
16.17 Client Statements - Mutual Fund Dealers
16.18 Transition to Exemption - International Dealers
16.19 Transition to Exemption - International Advisers
16.20 Transition to Exemption - Portfolio Manager & Investment Council (Foreign)
PART 17 - WHEN THIS INSTRUMENT COMES INTO
FORCE
17.1 Effective Date
Forms
FORM 31-103F1 - CALCULATION OF EXCESS WORKING
CAPITAL
FORM 31-103F2 - SUBMISSION TO JURISDICTION AND
APPOINTMENT OF AGENT FOR
SERVICE
FORM 31-103F3 - USE OF MOBILITY EXEMPTION
Appendices
APPENDIX A - BONDING AND INSURANCE CLAUSES
APPENDIX B - SUBORDINATION AGREEMENT
APPENDIX C - NEW CATEGORY NAMES -
INDIVIDUALS
APPENDIX D - NEW CATEGORY NAMES - FIRMS
APPENDIX E - NON-HARMONIZED CAPITAL
REQUIREMENTS
APPENDIX F - NON-HARMONIZED INSURANCE
REQUIREMENTS
NATIONAL INSTRUMENT 31-103
REGISTRATION REQUIREMENTS AND EXEMPTIONS
PART 1 -
INTERPRETATION
1.1
Definitions of terms used throughout this Instrument
In this Instrument
"Canadian financial institution" has the same meaning as in
section 1.1 of NI
45-106;
"connected issuer" has the same meaning as in
section 1.1 of National
Instrument 33-105 Underwriting Conflicts;
"debt security" has the same meaning as in
section 1.1 of NI 45-106;
"eligible client" means a client of a person or company if any of the following
apply:
(
a) the client is an individual and was a client of the person or
company immediately before becoming resident in the local
jurisdiction;
(
b) the client is the spouse or a child of a client referred to in
paragraph (a);
(
c) except in Ontario, the client is a client of the person or company
on September 27, 2009 pursuant to the person or company's
reliance on an exemption from the registration requirement under
Part 5 of Multilateral Instrument 11-101 Principal Regulator
System on that date;
"exempt market dealer" means a person or company registered in the category
of exempt market dealer;
"IIROC" means the Investment Industry Regulatory Organization of Canada;
"investment dealer" means a person or company registered in the category of
investment dealer;
"managed account" means an account of a client for which a person or
company makes the investment decisions if that person or company has
discretion to trade in securities for the account without requiring the client's
express consent to a transaction;
"marketplace" has the same meaning as in
section 1.1 of National Instrument
21-101 Marketplace Operation;
"MFDA" means the Mutual Fund Dealers Association of Canada;
"mutual fund dealer" means a person or company registered in the category of
mutual fund dealer;
"NI 45-106" means National Instrument 45-106 Prospectus and Registration
Exemptions;
"permitted client" means any of the following:
(
a) a Canadian financial institution or a
Schedule III bank;
(
b) the Business Development Bank of Canada incorporated under
the Business Development Bank of Canada Act (Canada);
(
c) a subsidiary of any person or company referred to in paragraph
(
a) or (b), if the person or company owns all of the voting
securities of the subsidiary, except the voting securities required
by law to be owned by directors of the subsidiary;
(
d) a person or company registered under the securities legislation of
a jurisdiction of Canada as an adviser or dealer, other than as a
scholarship plan dealer or a restricted dealer;
(
e) a pension fund that is regulated by either the federal Office of the
Superintendent of Financial Institutions or a pension commission
or similar regulatory authority of a jurisdiction of Canada or a
wholly-owned subsidiary of such a pension fund;
(
f) an entity organized in a foreign jurisdiction that is analogous to
any of the entities referred to in paragraphs (
a) to (e);
Crown corporation, agency or wholly-owned entity of the
(
h) any national, federal, state, provincial, territorial or municipal
government of or in any foreign jurisdiction, or any agency of
that government;
(
i) a municipality, public board or commission in Canada and a
metropolitan community, school board, the Comit‚ de gestion de
la taxe scolaire de l'Œle de Montr‚al or an intermunicipal
management board in Qu‚bec;
(
j) a trust company or trust corporation registered or authorized to
carry on business under the Trust and Loan Companies Act
(Canada) or under comparable legislation in a jurisdiction of
Canada or a foreign jurisdiction, acting on behalf of a managed
account managed by the trust company or trust corporation, as
the case may be;
(
k) a person or company acting on behalf of a managed account
managed by the person or company, if the person or company is
registered or authorized to carry on business as an adviser or the
equivalent under the securities legislation of a jurisdiction of
Canada or a foreign jurisdiction;
(
l) an investment fund if one or both of the following apply:
(
i) the fund is managed by a person or company registered
as an investment fund manager under the securities
legislation of a jurisdiction of Canada;
(ii) the fund is advised by a person or company authorized
to act as an adviser under the securities legislation of a
jurisdiction of Canada;
(
m) in respect of a dealer, a registered charity under the Income Tax
Act (Canada) that obtains advice on the securities to be traded
from an eligibility adviser, as defined in
section 1.1 of NI 45-
106, or an adviser registered under the securities legislation of
the jurisdiction of the registered charity;
(
n) in respect of an adviser, a registered charity under the Income
Tax Act (Canada) that is advised by an eligibility adviser, as
defined in
section 1.1 of NI 45-106, or an adviser registered
under the securities legislation of the jurisdiction of the
registered charity;
(
o) an individual who beneficially owns financial assets, as defined
section 1.1 of NI 45-106, having an aggregate realizable value
that, before taxes but net of any related liabilities, exceeds $5
million;
(
p) a person or company that is entirely owned by an individual or
individuals referred to in paragraph (o), who holds the beneficial
ownership interest in the person or company directly or through a
trust, the trustee of which is a trust company or trust corporation
registered or authorized to carry on business under the Trust and
Loan Companies Act (Canada) or under comparable legislation
in a jurisdiction of Canada or a foreign jurisdiction;
(
q) a person or company, other than an individual or an investment
fund, that has net assets of at least $25 million as shown on its
most recently prepared financial statements;
(
r) a person or company that distributes securities of its own issue in
Canada only to persons or companies referred to in paragraphs
(
a) to (q);
"portfolio manager" means a person or company registered in the category of
portfolio manager;
"principal jurisdiction" means
(
a) for a person or company other than an individual, the jurisdiction
of Canada in which the person or company's head office is
located, and
(
b) for an individual, the jurisdiction of Canada in which the
individual's working office is located;
"registered firm" means a registered dealer, a registered adviser, or a registered
investment fund manager;
"registered individual" means an individual who is registered
(
a) in a category that authorizes the individual to act as a dealer or
an adviser on behalf of a registered firm,
(
b) as ultimate designated person, or
(
c) as chief compliance officer;
"related issuer" has the same meaning as in
section 1.1 of National Instrument
33-105 Underwriting Conflicts;
"restricted dealer" means a person or company registered in the category of
restricted dealer;
"restricted portfolio manager" means a person or company registered in the
category of restricted portfolio manager;
"Schedule III bank" means an authorized foreign bank named in
Schedule III
of the Bank Act (Canada);
"scholarship plan dealer" means a person or company registered in the category
of scholarship plan dealer;
"sponsoring firm" means the registered firm on whose behalf an individual acts
as a dealer, an underwriter, an adviser, a chief compliance officer or an
ultimate designated person;
"subsidiary" has the same meaning as in
section 1.1 of NI 45-106;
"working office" means the office of the sponsoring firm where an individual
does most of his or her business.
1.2
Interpretation of "securities" in Alberta, British Columbia, New
Brunswick and Saskatchewan
In Alberta, British Columbia, New Brunswick and Saskatchewan, a reference
to "securities" in this Instrument includes "exchange contracts", unless the
context otherwise requires.
1.3 Information may be given to the Principal Regulator
(1) In this section, "principal regulator" means
(
a) for a registered firm whose head office is in a jurisdiction of
Canada, the securities regulatory authority or regulator of that
jurisdiction, and
(
b) for a registered firm whose head office is not in Canada, the
securities regulatory authority or regulator of,
(
i) if the firm has not completed its first financial year
since being registered, the jurisdiction of Canada in
which the firm expects most of its clients to be resident
at the end of its current financial year, and
(ii) in all other circumstances, the jurisdiction of Canada in
which most of the firm's clients were resident at the
end of its most recently completed financial year.
(2) Except under the following sections, for the purpose of a requirement in
this Instrument to notify the regulator or the securities regulatory
authority, the person or company may notify the regulator or the
securities regulatory authority by notifying the person or company's
principal regulator:
(
a) section 8.18 [international dealer];
(
b) section 8.26 [international adviser];
(
c) section 11.9 [registrant acquiring a registered firm's securities
or assets];
(
d) section 11.10 [registered firm whose securities are acquired].
(3) For the purpose of a requirement in this Instrument to deliver or submit a
document to the regulator or the securities regulatory authority, the
person or company may deliver or submit the document by delivering or
submitting it to the person or company's principal regulator.
PART 2 - CATEGORIES OF REGISTRATION FOR INDIVIDUALS
2.1 Individual Categories
(1) The following are the categories of registration for an individual who is
required, under securities legislation, to be registered to act on behalf of
a registered firm:
(
a) dealing representative;
(
b) advising representative;
(
c) associate advising representative;
(
d) ultimate designated person;
(
e) chief compliance officer.
(2) An individual registered in the category of
(
a) dealing representative may act as a dealer or an underwriter in
respect of a security that the individual's sponsoring firm is
permitted to trade or underwrite,
(
b) advising representative may act as an adviser in respect of a
security that the individual's sponsoring firm is permitted to
advise on,
(
c) associate advising representative may act as an adviser in respect
of a security that the individual's sponsoring firm is permitted to
advise on if the advice has been approved under subsection
4.2(1) [associate advising representatives - pre-approval of
advice],
(
d) ultimate designated person must perform the functions set out in
section 5.1 [responsibilities of the ultimate designated person],
and
(
e) chief compliance officer must perform the functions set out in
section 5.2 [responsibilities of the chief compliance officer].
(3) Subsection (1) does not apply in Ontario.
Note: In Ontario, the same categories of registration for individuals as in
subsection 2.1(1) are set out under
section 25 of the Securities Act (Ontario).
2.2 Client Mobility Exemption - Individuals
(1) The registration requirement does not apply to an individual if all of the
following apply:
(
a) the individual is registered as a dealing, advising or associate
advising representative in the individual's principal jurisdiction;
(
b) the individual's sponsoring firm is registered in the firm's
principal jurisdiction;
(
c) the individual does not act as a dealer, underwriter or adviser in
the local jurisdiction other than as he or she is permitted to in his
or her principal jurisdiction according to the individual's
registration in that jurisdiction;
(
d) the individual does not act as a dealer, underwriter or adviser in
the local jurisdiction other than for 5 or fewer eligible clients;
(
e) the individual complies with
Part 13 [dealing with clients -
individuals and firms];
(
f) the individual deals fairly, honestly and in good faith in the
course of his or her dealings with an eligible client;
(
g) before first acting as a dealer or adviser for an eligible client, the
individual's sponsoring firm has disclosed to the client that the
individual, and if the firm is relying on
section 8.30 [client
mobility exemption - firms], the firm,
(
i) is exempt from registration in the local jurisdiction, and
(ii) is not subject to requirements otherwise applicable
under local securities legislation.
(2) If an individual relies on the exemption in this section, the individual's
sponsoring firm must submit a completed Form 31-103F3 Use of
Mobility Exemption to the securities regulatory authority of the local
jurisdiction as soon as possible after the individual first relies on this
section.
2.3 Individuals Acting for Investment Fund Managers
The investment fund manager registration requirement does not apply to an
individual acting on behalf of a registered investment fund manager.
PART 3 - REGISTRATION REQUIREMENTS - INDIVIDUALS
Division 1 General Proficiency Requirements
3.1
Definitions
In this Part
"Branch Manager Proficiency Exam" means the examination prepared and
administered by the RESP Dealers Association of Canada and so named on the
day this Instrument comes into force, and every examination that preceded that
examination, or succeeded that examination, that does not have a significantly
reduced scope and content when compared to the scope and content of the first-
mentioned examination;
"Canadian Investment Funds Exam" means the examination prepared and
administered by the Investment Funds Institute of Canada and so named on the
day this Instrument comes into force, and every examination that preceded that
examination, or succeeded that examination, that does not have a significantly
reduced scope and content when compared to the scope and content of the first-
mentioned examination;
"Canadian Investment Manager designation" means the designation earned
through the Canadian investment manager program prepared and administered
by CSI Global Education Inc. and so named on the day this Instrument comes
into force, and every program that preceded that program, or succeeded that
program, that does not have a significantly reduced scope and content when
compared to the scope and content of the first-mentioned program;
"Canadian Securities Course Exam" means the examination prepared and
administered by CSI Global Education Inc. and so named on the day this
Instrument comes into force, and every examination that preceded that
examination, or succeeded that examination, that does not have a significantly
reduced scope and content when compared to the scope and content of the first-
mentioned examination;
"CFA Charter" means the charter earned through the Chartered Financial
Analyst program prepared and administered by the CFA Institute and so named
on the day this Instrument comes into force, and every program that preceded
that program, or succeeded that program, that does not have a significantly
reduced scope and content when compared to the scope and content of the first-
mentioned program;
"Exempt Market Products Exam" means the examination prepared and
administered by the IFSE Institute and so named on the day this Instrument
comes into force, and every examination that preceded that examination, or
succeeded that examination, that does not have a significantly reduced scope
and content when compared to the scope and content of the first-mentioned
examination;
"Investment Funds in Canada Course Exam" means the examination prepared
and administered by CSI Global Education Inc. and so named on the day this
Instrument comes into force, and every examination that preceded that
examination, or succeeded that examination, that does not have a significantly
reduced scope and content when compared to the scope and content of the first-
mentioned examination;
"Mutual Fund Dealers Compliance Exam" means the examination prepared
and administered by the IFSE Institute and so named on the day this Instrument
comes into force, and every examination that preceded that examination, or
succeeded that examination, that does not have a significantly reduced scope
and content when compared to the scope and content of the first-mentioned
examination;
"New Entrants Course Exam" means the examination prepared and
administered by CSI Global Education Inc. and so named on the day this
Instrument comes into force, and every examination that preceded that
examination, or succeeded that examination, that does not have a significantly
reduced scope and content when compared to the scope and content of the first-
mentioned examination;
"PDO Exam" means
(
a) the Officers', Partners' and Directors' Exam prepared and
administered by the Investment Funds Institute of Canada and so
named on the day this Instrument comes into force, and every
examination that preceded that examination, or succeeded that
examination, that does not have a significantly reduced scope
and content when compared to the scope and content of the first-
mentioned examination, or
(
b) the Partners, Directors and Senior Officers Course Exam
prepared and administered by CSI Global Education Inc. and so
named on the day this Instrument comes into force, and every
examination that preceded that examination, or succeeded that
examination, that does not have a significantly reduced scope
and content when compared to the scope and content of the first-
mentioned examination;
"Sales Representative Proficiency Exam" means the examination prepared and
administered by the RESP Dealers Association of Canada and so named on the
day this Instrument comes into force, and every examination that preceded that
examination, or succeeded that examination, that does not have a significantly
reduced scope and content when compared to the scope and content of the first-
mentioned examination;
"Series 7 Exam" means the examination prepared and administered by the
Financial Industry Regulatory Authority in the United States of America and so
named on the day this Instrument comes into force, and every examination that
preceded that examination, or succeeded that examination, that does not have a
significantly reduced scope and content when compared to the scope and
content of the first-mentioned examination.
3.2 U.S. Equivalency
In this Part, an individual is not required to have passed the Canadian
Securities Course Exam if the individual has passed the Series 7 Exam and the
New Entrants Course Exam.
3.3 Time Limits on Examination Requirements
(1) For the purposes of this Part, an individual is deemed to have not passed
an examination, and is deemed to have not successfully completed a
program, unless the individual passed the examination or successfully
completed the program within 36 months before the date the individual
applied for registration.
(2) Subsection (1) does not apply if the individual passed the examination or
successfully completed the program more than 36 months before the
date the individual applied for registration and one or both of the
following apply:
(
a) for any 12 months during the 36-month period before the date
the individual applied for registration in a category, the
individual was registered in the same category in a jurisdiction of
Canada;
(
b) the individual gained 12 months of relevant securities industry
experience during the 36-month period before the date the
individual applied for registration.
(3) In Qu‚bec, the examinations provided for in subsections (4) and (6) of
section 45 of Policy Q-9 Dealers, Advisers and Representatives, as it
read on September 27, 2009, are deemed to be relevant examinations for
purposes of subsection (2).
Division 2 Education and experience requirements
3.4 Proficiency - Initial and Ongoing
(1) An individual must not perform an activity that requires registration
unless the individual has the education, training and experience that a
reasonable person would consider necessary to perform the activity
competently.
(2) A chief compliance officer must not perform an activity set out in
section 5.2 [responsibilities of the chief compliance officer] unless the
individual has the education, training and experience that a reasonable
person would consider necessary to perform the activity competently.
3.5 Mutual Fund Dealer - Dealing Representative
A dealing representative of a mutual fund dealer must not act as a dealer on
behalf of the mutual fund dealer unless one or both of the following apply:
(
a) the representative has passed the Canadian Investment Funds
Exam, the Canadian Securities Course Exam or the Investment
Funds in Canada Course Exam;
(
b) the representative has met the requirements of
section 3.11
[portfolio manager - advising representative].
3.6 Mutual Fund Dealer - Chief Compliance Officer
A mutual fund dealer must not designate an individual as its chief compliance
officer under subsection 11.3(1) [designating a chief compliance officer] unless
any of the following apply:
(
a) the individual has passed
(
i) the Canadian Investment Funds Exam, the Canadian
Securities Course Exam or the Investment Funds in
Canada Course Exam, and
(ii) the PDO Exam or the Mutual Fund Dealers
Compliance Exam;
(
b) the individual has met the requirements of
section 3.13 [portfolio
manager - chief compliance officer].
3.7 Scholarship Plan Dealer - Dealing Representative
A dealing representative of a scholarship plan dealer must not act as a dealer on
behalf of the scholarship plan dealer unless the representative has passed the
Sales Representative Proficiency Exam.
3.8 Scholarship Plan Dealer - Chief Compliance Officer
A scholarship plan dealer must not designate an individual as its chief
compliance officer under subsection 11.3(1) [designating a chief compliance
officer] unless the individual has passed all of the following:
(
a) the Sales Representative Proficiency Exam;
(
b) the Branch Manager Proficiency Exam;
(
c) the PDO Exam.
3.9 Exempt Market Dealer - Dealing Representative
A dealing representative of an exempt market dealer must not act as a dealer on
behalf of the exempt market dealer unless any of the following apply:
(
a) the individual has passed the Canadian Securities Course Exam;
(
b) the individual has passed the Exempt Market Products Exam;
(
c) the individual satisfies the conditions set out in
section 3.11
[portfolio manager - advising representative].
3.10 Exempt Market Dealer - Chief Compliance Officer
An exempt market dealer must not designate an individual as its chief
compliance officer under subsection 11.3(1) [designating a chief compliance
officer] unless any of the following apply:
(
a) the individual has passed the PDO Exam and any of the
following:
(
i) the Canadian Securities Course Exam;
(ii) the Exempt Market Products Exam;
(
b) the individual has met the requirements of
section 3.13 [portfolio
manager - chief compliance officer].
3.11 Portfolio Manager - Advising Representative
An advising representative of a portfolio manager must not act as an adviser on
behalf of the portfolio manager unless any of the following apply:
(
a) the representative has earned a CFA Charter and has 12 months
of relevant investment management experience in the 36-month
period before applying for registration;
(
b) the representative has received the Canadian Investment
Manager designation and has 48 months of relevant investment
management experience, 12 months of which was in the 36-
month period before applying for registration.
3.12 Portfolio Manager - Associate Advising Representative
An associate advising representative of a portfolio manager must not act as an
adviser on behalf of the portfolio manager unless any of the following apply:
(
a) the representative has completed Level 1 of the Chartered
Financial Analyst program and has 24 months of relevant
investment management experience;
(
b) the representative has received the Canadian Investment
Manager designation and has 24 months of relevant investment
management experience.
3.13 Portfolio Manager - Chief Compliance Officer
A portfolio manager must not designate an individual as its chief compliance
officer under subsection 11.3(1) [designating a chief compliance officer] unless
any of the following apply:
(
a) the individual has
(
i) earned a CFA Charter or a professional designation as a
lawyer, Chartered Accountant, Certified General
Accountant or Certified Management Accountant in a
jurisdiction of Canada, a notary in Qu‚bec, or the
equivalent in a foreign jurisdiction,
(ii) passed the Canadian Securities Course Exam and the
PDO Exam, and
(iii) either
A) gained 36 months of relevant securities
experience while working at an investment
dealer, a registered adviser or an investment
fund manager, or
B) provided professional services in the
securities industry for 36 months and worked
at a registered dealer, a registered adviser or
an investment fund manager for 12 months;
(
b) the individual has passed the Canadian Securities Course Exam
and the PDO Exam and any of the following apply:
(
i) the individual has worked at an investment dealer or a
registered adviser for 5 years, including for 36 months
in a compliance capacity;
(ii) the individual has worked for 5 years at a Canadian
financial institution in a compliance capacity relating to
portfolio management and worked at a registered dealer
or a registered adviser for 12 months;
(
c) the individual has passed the PDO Exam and has met the
requirements of
section 3.11 [portfolio manager - advising
representative].
3.14 Investment Fund Manager - Chief Compliance Officer
An investment fund manager must not designate an individual as its chief
compliance officer under subsection 11.3(1) [designating a chief compliance
officer] unless any of the following apply:
(
a) the individual has
(
i) earned a CFA Charter or a professional designation as a
lawyer, Chartered Accountant, Certified General
Accountant or Certified Management Accountant in a
jurisdiction of Canada, a notary in Qu‚bec, or the
equivalent in a foreign jurisdiction,
(ii) passed the Canadian Securities Course Exam and the
PDO Exam, and
(iii) either
A) gained 36 months of relevant securities
experience while working at a registered
dealer, a registered adviser or an investment
fund manager, or
B) provided professional services in the
securities industry for 36 months and worked
in a relevant capacity at an investment fund
manager for 12 months;
(
b) the individual has
(
i) passed the Canadian Investment Funds Exam, the
Canadian Securities Course Exam, or the Investment
Funds in Canada Course Exam,
(ii) passed the PDO Exam, and
(iii) gained 5 years of relevant securities experience while
working at a registered dealer, registered adviser or an
investment fund manager, including 36 months in a
compliance capacity.
(
c) the individual has met the requirements of
section 3.13 [portfolio
manager - chief compliance officer].
Division 3 Membership in a Self-Regulatory Organization
3.15 Who must be Approved by an SRO before Registration
(1) A dealing representative of an investment dealer must be an "approved
person" as defined under the rules of IIROC.
(2) Except in Qu‚bec, a dealing representative of a mutual fund dealer must
be an "approved person" as defined under the rules of the MFDA.
3.16 Exemptions from Certain Requirements for SRO-Approved Persons
(1) The following sections do not apply to a registered individual who is a
dealing representative of a member of IIROC:
(
a) subsection 13.2(3) [know your client];
(
b) section 13.3 [suitability];
(
c) section 13.13 [disclosure when recommending the use of
borrowed money].
(2) The following sections do not apply to a registered individual who is a
dealing representative of a member of the MFDA:
(
a) section 13.3 [suitability];
(
b) section 13.13 [disclosure when recommending the use of
borrowed money].
(3) In Qu‚bec, the requirements listed in subsection (2) do not apply to a
registered individual who is a dealing representative of a mutual fund
dealer if the registered individual complies with the applicable
regulations on mutual fund dealers in Qu‚bec.
PART 4 - RESTRICTIONS ON REGISTERED INDIVIDUALS
4.1 Restriction on Acting for another Registered Firm
An individual registered as a dealing, advising or associate advising
representative of a registered firm must not act as an officer, partner or director
of another registered firm that is not an affiliate of the first-mentioned
registered firm.
4.2 Associate Advising Representatives - Pre-Approval of Advice
(1) An associate advising representative of a registered adviser must not
advise on securities unless, before giving the advice, the advice has been
approved by an individual designated by the registered firm under
subsection (2).
(2) A registered adviser must designate, for an associate advising
representative, an advising representative to review the advice of the
associate advising representative.
(3) No later than the 7th day following the date of a designation under
subsection (2), a registered adviser must provide the regulator with the
names of the advising representative and the associate advising
representative who are the subject of the designation.
PART 5 - ULTIMATE DESIGNATED PERSON AND CHIEF COMPLIANCE
OFFICER
5.1 Responsibilities of the Ultimate Designated Person
The ultimate designated person of a registered firm must do all of the
following:
(
a) supervise the activities of the firm that are directed towards
ensuring compliance with securities legislation by the firm and
each individual acting on the firm's behalf;
(
b) promote compliance by the firm, and individuals acting on its
behalf, with securities legislation.
5.2 Responsibilities of the Chief Compliance Officer
The chief compliance officer of a registered firm must do all of the following:
(
a) establish and maintain policies and procedures for assessing
compliance by the firm, and individuals acting on its behalf, with
securities legislation;
(
b) monitor and assess compliance by the firm, and individuals
acting on its behalf, with securities legislation;
(
c) report to the ultimate designated person of the firm as soon as
possible if the chief compliance officer becomes aware of any
circumstances indicating that the firm, or any individual acting
on its behalf, may be in non-compliance with securities
legislation and any of the following apply:
(
i) the non-compliance creates, in the opinion of a
reasonable person, a risk of harm to a client;
(ii) the non-compliance creates, in the opinion of a
reasonable person, a risk of harm to the capital markets;
(iii) the non-compliance is part of a pattern of non-
compliance;
(
d) submit an annual report to the firm's board of directors, or
individuals acting in a similar capacity for the firm, for the
purpose of assessing compliance by the firm, and individuals
acting on its behalf, with securities legislation.
PART 6 - SUSPENSION AND REVOCATION OF REGISTRATION -
INDIVIDUALS
6.1 If Individual Ceases to have Authority to Act for Firm
If a registered individual ceases to have authority to act as a registered
individual on behalf of his or her sponsoring firm because of the end of, or a
change in, the individual's employment, partnership, or agency relationship
with the firm, the individual's registration with the firm is suspended until
reinstated or revoked under securities legislation.
6.2 If IIROC Approval is Revoked or Suspended
If IIROC revokes or suspends a registered individual's approval in respect of
an investment dealer, the individual's registration as a dealing representative of
the investment dealer is suspended until reinstated or revoked under securities
legislation.
6.3 If MFDA Approval is Revoked or Suspended
Except in Qu‚bec, if the MFDA revokes or suspends a registered individual's
approval in respect of a mutual fund dealer, the individual's registration as a
dealing representative of the mutual fund dealer is suspended until reinstated or
revoked under securities legislation.
6.4 If Sponsoring Firm is Suspended
If a registered firm's registration in a category is suspended, the registration of
each registered dealing, advising or associate advising representative acting on
behalf of the firm in that category is suspended until reinstated or revoked
under securities legislation.
6.5 Dealing and Advising Activities Suspended
If an individual's registration in a category is suspended, the individual must
not act as a dealer, an underwriter or an adviser, as the case may be, under that
category.
6.6 Revocation of a Suspended Registration - Individual
If a registration of an individual has been suspended under this Part and it has
not been reinstated, the registration is revoked on the 2nd anniversary of the
suspension.
6.7 Exception for Individuals Involved in a Hearing
Despite
section 6.6, if a hearing concerning a suspended registrant is
commenced under securities legislation or a proceeding concerning the
registrant is commenced under the rules of an SRO, the registrant's registration
remains suspended.
6.8 Application of
Part 6 in Ontario
Other than
section 6.5 [dealing and advising activities suspended], this Part
does not apply in Ontario.
Note: In Ontario, measures governing suspension in
section 29 of the
Securities Act (Ontario) are similar to those in Parts 6 and 10.
PART 7 - CATEGORIES OF REGISTRATION FOR FIRMS
7.1 Dealer Categories
(1) The following are the categories of registration for a person or company
that is required, under securities legislation, to be registered as a dealer:
(
a) investment dealer;
(
b) mutual fund dealer;
(
c) scholarship plan dealer;
(
d) exempt market dealer;
(
e) restricted dealer.
(2) A person or company registered in the category of
(
a) investment dealer may act as a dealer or an underwriter in
respect of any security,
(
b) mutual fund dealer may act as a dealer in respect of any security
(
i) a mutual fund, or
(ii) except in Qu‚bec, an investment fund that is a labour-
sponsored investment fund corporation or labour-
sponsored venture capital corporation under legislation
of a jurisdiction of Canada,
(
c) scholarship plan dealer may act as a dealer in respect of a
security of a scholarship plan, an educational plan or an
educational trust,
(
d) exempt market dealer may
(
i) act as a dealer by trading a security that is distributed
under an exemption from the prospectus requirement,
whether or not a prospectus was filed in respect of the
distribution,
(ii) act as a dealer by trading a security that, if the trade
were a distribution, would be exempt from the
prospectus requirement,
(iii) receive an order from a client to sell a security that was
acquired by the client in a circumstance described in
subparagraph (
i) or (ii), and may act or solicit in
furtherance of receiving such an order, and
(iv) act as an underwriter in respect of a distribution of
securities that is made under an exemption from the
prospectus requirement;
(
e) restricted dealer may act as a dealer or an underwriter in
accordance with the terms, conditions, restrictions or
requirements applied to its registration.
(3) Despite paragraph (2)(b), in British Columbia a mutual fund dealer may
also act as a dealer in respect of securities of any of the following:
(
a) scholarship plans;
(
b) educational plans;
(
c) educational trusts.
(4) Subsection (1) does not apply in Ontario.
Note: In Ontario, the same categories of registration for firms acting as dealers
as in subsection 7.1(1) are set out under subsection 26(2) of the Securities Act
(Ontario).
7.2 Adviser Categories
(1) The following are the categories of registration for a person or company
that is required, under securities legislation, to be registered as an
adviser:
(
a) portfolio manager;
(
b) restricted portfolio manager.
(2) A person or company registered in the category of
(
a) portfolio manager may act as an adviser in respect of any
security, and
(
b) restricted portfolio manager may act as an adviser in respect of
any security in accordance with the terms, conditions, restrictions
or requirements applied to its registration.
(3) Subsection (1) does not apply in Ontario.
Note: In Ontario, the same categories of registration for firms acting as
advisers as in subsection 7.2(1) are set out under subsection 26(6) of the
Securities Act (Ontario).
7.3 Investment Fund Manager Category
The category of registration for a person or company that is required, under
securities legislation, to be registered as an investment fund manager is
"investment fund manager".
PART 8 - EXEMPTIONS FROM THE REQUIREMENT TO REGISTER
Division 1 Exemptions from Dealer and Underwriter Registration
8.1
Interpretation of "trade" in Qu‚bec
In this Part, in Qu‚bec, "trade" refers to any of the following activities:
(
a) the activities described in the definition of "dealer" in
section 5
of the Securities Act (R.S.Q., c. V-1.1), including the following
activities:
(
i) the sale or disposition of a security by onerous title,
whether the terms of payment are on margin,
installment or otherwise, but does not include a transfer
or the giving in guarantee of securities in connection
with a debt or the purchase of a security, except as
provided in paragraph (b);
(ii) participation as a trader in any transaction in a security
through the facilities of an exchange or a quotation and
trade reporting system;
(iii) the receipt by a registrant of an order to buy or sell a
security;
(
b) a transfer or the giving in guarantee of securities of an issuer
from the holdings of a control person in connection with a debt.
8.2 Definition of "securities" in Alberta, British Columbia, New Brunswick
and Saskatchewan
Despite
section 1.2, in Alberta, British Columbia, New Brunswick and
Saskatchewan, a reference to "securities" in this Division excludes "exchange
contracts".
8.3
Interpretation - Exemption from Underwriter Registration Requirement
In this Division, an exemption from the dealer registration requirement is an
exemption from the underwriter registration requirement.
8.4 Person or Company not in the business of Trading in British Columbia,
Manitoba and New Brunswick
(1) In British Columbia and New Brunswick, a person or company is
exempt from the dealer registration requirement if the person or
company
(
a) is not engaged in the business of trading in securities or
exchange contracts as a principal or agent, and
(
b) does not hold himself, herself or itself out as engaging in the
business of trading in securities or exchange contracts as a
principal or agent.
(2) In Manitoba, a person or company is exempt from the dealer registration
requirement if the person or company
(
a) is not engaged in the business of trading in securities as a
principal or agent, and
(
b) does not hold himself, herself or itself out as engaging in the
business of trading in securities as a principal or agent.
8.5 Trades Through or to a Registered Dealer
The dealer registration requirement does not apply to a person or company in
respect of a trade by the person or company if one of the following applies:
(
a) the trade is made solely through an agent who is a registered
dealer, if the dealer is registered in a category that permits the
trade;
(
b) the trade is made to a registered dealer who is purchasing as
principal, if the dealer is registered in a category that permits the
trade.
8.6 Adviser - Non-Prospectus Qualified Investment Fund
(1) The dealer registration requirement does not apply to a registered
adviser, or an adviser that is exempt from registration under
section 8.26
[international adviser], in respect of a trade in a security of a non-
prospectus qualified investment fund if both of the following apply:
(
a) the adviser acts as the fund's adviser and investment fund
manager;
(
b) the trade is to a managed account of a client of the adviser.
(2) The exemption in subsection (1) is not available if the managed account
or non-prospectus qualified investment fund was created or is used
primarily for the purpose of qualifying for the exemption.
(3) An adviser that relies on subsection (1) must provide written notice to
the regulator that it is relying on the exemption within 7 days of its first
use of the exemption.
8.7 Investment Fund Reinvestment
(1) Subject to subsections (2), (3), (4) and (5), the dealer registration
requirement does not apply to an investment fund, or the investment
fund manager of the fund, in respect of a trade in a security with a
security holder of the investment fund if the trade is permitted by a plan
of the investment fund and is in a security of the investment fund's own
issue and if any of the following apply:
(
a) a dividend or distribution out of earnings, surplus, capital or
other sources payable in respect of the investment fund's
securities is applied to the purchase of the security that is of the
same class or series as the securities to which the dividends or
distributions are attributable;
(
b) the security holder makes an optional cash payment to purchase
the security of the investment fund and both of the following
apply:
(
i) the security is of the same class or series of securities
described in paragraph (
a) that trade on a marketplace;
(ii) the aggregate number of securities issued under the
optional cash payment does not exceed, in the financial
year of the investment fund during which the trade
takes place, 2 per cent of the issued and outstanding
securities of the class to which the plan relates as at the
beginning of the financial year.
(2) The exemption in subsection (1) is not available unless the plan that
permits the trade is available to every security holder in Canada to which
the dividend or distribution is available.
(3) The exemption in subsection (1) is not available if a sales charge is
payable on a trade described in the subsection.
(4) At the time of the trade, if the investment fund is a reporting issuer and
in continuous distribution, the investment fund must have set out in the
prospectus under which the distribution is made
(
a) details of any deferred or contingent sales charge or redemption
fee that is payable at the time of the redemption of the security,
and
(
b) any right that the security holder has to elect to receive cash
instead of securities on the payment of a dividend or making of a
distribution by the investment fund and instructions on how the
right can be exercised.
(5) At the time of the trade, if the investment fund is a reporting issuer and
is not in continuous distribution, the investment fund must provide the
information required by subsection (4) in its prospectus, annual
information form or a material change report.
8.8 Additional Investment in Investment Funds
The dealer registration requirement does not apply to an investment fund, or
the investment fund manager of the fund, in respect of a trade in a security of
the investment fund's own issue with a security holder of the investment fund
if all of the following apply:
(
a) the security holder initially acquired securities of the investment
fund as principal for an acquisition cost of not less than $150,000
paid in cash at the time of the acquisition;
(
b) the trade is in respect of a security of the same class or series as
the securities initially acquired, as described in paragraph (a);
(
c) the security holder, as at the date of the trade, holds securities of
the investment fund and one or both of the following apply:
(
i) the acquisition cost of the securities being held was not
less than $150,000;
(ii) the net asset value of the securities being held is not
less than $150,000.
8.9 Additional Investment in Investment Funds if Initial Purchase before
September 14, 2005
The dealer registration requirement does not apply in respect of a trade by an
investment fund in a security of its own issue to a purchaser that initially
acquired a security of the same class as principal before September 14, 2005 if
all of the following apply:
(
a) the security was initially acquired under any of the following
provisions:
(
i) in Alberta, sections 86(
e) and 131(1)(
d) of the
Securities Act (Alberta) as they existed prior to their
repeal by sections 9(
a) and 13 of the Securities
Amendment Act (Alberta), 2003 SA c.32 and sections
66.2 and 122.2 of the Alberta Securities Commission
Rules (General);
(ii) in British Columbia, sections 45(2) (5) and (22), and
74(2) (4) and (19) of the Securities Act (British
Columbia);
(iii) in Manitoba, sections 19(3) and 58(1)(
a) of the
Securities Act (Manitoba) and
section 90 of the
Securities Regulation MR 491/88R;
(iv) in New Brunswick,
section 2.8 of Local Rule 45-501
Prospectus and Registration Exemptions;
(
v) in Newfoundland and Labrador, sections 36(1)(
e) and
73(1)(
d) of the Securities Act (Newfoundland and
Labrador);
(vi) in Nova Scotia, sections 41(1)(
e) and 77(1)(
d) of the
Securities Act (Nova Scotia);
(vii) in Northwest Territories,
section 3(
c) and (
z) of Blanket
Order No. 1;
(viii) in Nunavut,
section 3(
c) and (
z) of Blanket Order No.
(ix) in Ontario, sections 35(1)5 and 72(1)(
d) of the
Securities Act (Ontario) and
section 2.12 of Ontario
Securities Commission Rule 45-501 Exempt
Distributions that came into force on January 12, 2004;
(
x) in Prince Edward Island,
section 2(3)(
d) of the former
Securities Act (Prince Edward Island) and Prince
Edward Island Local Rule 45-512 Exempt Distributions
- Exemption for Purchase of Mutual Fund Securities;
(xi) in Qu‚bec, former sections 51 and 155.1(2) of the
Securities Act (Qu‚bec);
(xii) in Saskatchewan, sections 39(1)(
e) and 81(1)(
d) of The
Securities Act, 1988 (Saskatchewan);
(
b) the trade is for a security of the same class or series as the initial
trade;
(
c) the security holder, as at the date of the trade, holds securities of
the investment fund that have one or both of the following
characteristics:
(
i) an acquisition cost of not less than the minimum
amount prescribed by securities legislation referred to
in paragraph (
a) under which the initial trade was
conducted;
(ii) a net asset value of not less than the minimum amount
prescribed by securities legislation referred to in
paragraph (
a) under which the initial trade was
conducted.
8.10 Private Investment Club
The dealer registration requirement does not apply in respect of a trade in a
security of an investment fund if all of the following apply:
(
a) the fund has no more than 50 beneficial security holders;
(
b) the fund does not seek and has never sought to borrow money
from the public;
(
c) the fund does not distribute and has never distributed its
securities to the public;
(
d) the fund does not pay or give any remuneration for investment
management or administration advice in respect of trades in
securities, except normal brokerage fees;
(
e) the fund, for the purpose of financing its operations, requires
security holders to make contributions in proportion to the value
of the securities held by them.
8.11 Private Investment Fund - Loan and Trust Pools
(1) The dealer registration requirement does not apply in respect of a trade
in a security of an investment fund if all of the following apply:
(
a) the fund is administered by a trust company or trust corporation
that is registered or authorized by an enactment of Canada or a
jurisdiction of Canada to carry on business in Canada or a
jurisdiction of Canada;
(
b) the fund has no promoter or investment fund manager other than
the trust company or trust corporation referred to in paragraph
(a);
(
c) the fund commingles the money of different estates and trusts for
the purpose of facilitating investment.
(2) Despite subsection (1), a trust company or trust corporation registered
under the laws of Prince Edward Island that is not registered under the
Trust and Loan Companies Act (Canada) or under comparable
legislation in another jurisdiction of Canada is not a trust company or
trust corporation for the purpose of paragraph (1)(a).
8.12 Mortgages
(1) In this section, "syndicated mortgage" means a mortgage in which two
or more persons or companies participate, directly or indirectly, as
lenders in the debt obligation that is secured by the mortgage.
(2) Subject to subsection (3), the dealer registration requirement does not
apply in respect of a trade in a mortgage on real property in a
jurisdiction of Canada by a person or company who is registered or
licensed, or exempted from registration or licensing, under mortgage
brokerage or mortgage dealer legislation of that jurisdiction.
(3) In Alberta, British Columbia, Manitoba, Qu‚bec and Saskatchewan,
subsection (2) does not apply in respect of a trade in a syndicated
mortgage.
(4) This
section does not apply in Ontario.
Note: In Ontario a similar exemption from the dealer registration requirement
is provided under subsection 35(4) of the Securities Act (Ontario).
8.13 Personal Property Security Legislation
(1) The dealer registration requirement does not apply in respect of a trade
to a person or company, other than an individual in a security evidencing
indebtedness secured by or under a security agreement, secured in
accordance with personal property security legislation of a jurisdiction
of Canada that provides for the granting of security in personal property.
(2) This
section does not apply in Ontario.
Note: In Ontario a similar exemption from the dealer registration requirement
is provided under subsection 35(2) of the Securities Act (Ontario).
8.14 Variable Insurance Contract
(1) In this
section
"contract", "group insurance", "insurance company", "life insurance"
and "policy" have the respective meanings assigned to them in the
legislation referenced opposite the name of the local jurisdiction in
Appendix A of NI 45-106;
"variable insurance contract" means a contract of life insurance under
which the interest of the purchaser is valued for purposes of conversion
or surrender by reference to the value of a proportionate interest in a
specified portfolio of assets.
(2) The dealer registration requirement does not apply in respect of a trade
in a variable insurance contract by an insurance company if the variable
insurance contract is
(
a) a contract of group insurance,
(
b) a whole life insurance contract providing for the payment at
maturity of an amount not less than 75% of the premium paid up
to age 75 years for a benefit payable at maturity,
(
c) an arrangement for the investment of policy dividends and policy
proceeds in a separate and distinct fund to which contributions
are made only from policy dividends and policy proceeds, or
(
d) a variable life annuity.
8.15
Schedule III Banks and Cooperative Associations - Evidence of Deposit
(1) The dealer registration requirement does not apply in respect of a trade
in an evidence of deposit issued by a
Schedule III bank or an association
governed by the Cooperative Credit Associations Act (Canada).
(2) This
section does not apply in Ontario.
Note: In Ontario, subsection 8.15(1) is not required because the security
described in the exemption is excluded from the definition of "security" in
subsection 1(1) of the Securities Act (Ontario).
8.16 Plan Administrator
(1) In this
section
"consultant" has the same meaning as in
section 2.22 of NI 45-106;
"control person" has the same meaning as in
section 1.1 of NI 45-106;
"executive officer" has the same meaning as in
section 1.1 of NI 45-
106;
"permitted assign" has the same meaning as in
section 2.22 of NI 45-
106;
"plan" means a plan or program established or maintained by an issuer
providing for the acquisition of securities of the issuer by employees,
executive officers, directors or consultants of the issuer or of a related
entity of the issuer;
"plan administrator" means a trustee, custodian, or administrator, acting
on behalf of, or for the benefit of, employees, executive officers,
directors or consultants of an issuer or of a related entity of an issuer;
"related entity" has the same meaning as in
section 2.22 of NI 45-106.
(2) The dealer registration requirement does not apply in respect of a trade
made pursuant to a plan of the issuer in a security of an issuer, or an
option to acquire a security of the issuer, made by the issuer, a control
person of the issuer, a related entity of the issuer, or a plan administrator
of the issuer with any of the following:
(
a) the issuer;
(
b) a current or former employee, executive officer, director or
consultant of the issuer or a related entity of the issuer;
(
c) a permitted assign of a person or company referred to in
paragraph (b).
(3) The dealer registration requirement does not apply in respect of a trade
in a security of an issuer, or an option to acquire a security of the issuer,
made by a plan administrator of the issuer if
(
a) the trade is pursuant to a plan of the issuer, and
(
b) the conditions in
section 2.14 of National Instrument 45-102
Resale of Securities are satisfied.
8.17 Reinvestment Plan
(1) Subject to subsections (3), (4) and (5), the dealer registration
requirement does not apply in respect of the following trades by an
issuer, or by a trustee, custodian or administrator acting for or on behalf
of the issuer, to a security holder of the issuer if the trades are permitted
by a plan of the issuer:
(
a) a trade in a security of the issuer's own issue if a dividend or
distribution out of earnings, surplus, capital or other sources
payable in respect of the issuer's securities is applied to the
purchase of the security;
(
b) subject to subsection (2), a trade in a security of the issuer's own
issue if the security holder makes an optional cash payment to
purchase the security of the issuer that trades on a marketplace.
(2) The aggregate number of securities issued under the optional cash
payment referred to in subsection (1)(
b) must not exceed, in any
financial year of the issuer during which the trade takes place, 2% of the
issued and outstanding securities of the class to which the plan relates as
at the beginning of the financial year.
(3) A plan that permits the trades described in subsection (1) must be
available to every security holder in Canada to which the dividend or
distribution out of earnings, surplus, capital or other sources is available.
(4) This
section is not available in respect of a trade in a security of an
investment fund.
(5) Subject to
section 8.3.1 [transition - reinvestment plan] of NI 45-106, if
the security traded under a plan described in subsection (1) is of a
different class or series than the class or series of the security to which
the dividend or distribution is attributable, the issuer or the trustee,
custodian or administrator must have provided to each participant that is
eligible to receive a security under the plan either a description of the
material attributes and characteristics of the security traded under the
plan or notice of a source from which the participant can obtain the
information without charge.
8.18 International Dealer
(1) In this section, "foreign security" means
(
a) a security issued by an issuer incorporated, formed or created
under the laws of a foreign jurisdiction, or
(
b) a security issued by a government of a foreign jurisdiction.
(2) Subject to subsections (3) and (4), the dealer registration requirement
does not apply in respect of the following:
(
a) an activity, other than a sale of a security, that is reasonably
necessary to facilitate a distribution of securities that are offered
primarily in a foreign jurisdiction;
(
b) a trade in a debt security with a permitted client during the
security's distribution, if the debt security is offered primarily in
a foreign jurisdiction and a prospectus has not been filed with a
Canadian securities regulatory authority for the distribution;
(
c) a trade in a debt security that is a foreign security with a
permitted client, other than during the security's distribution;
(
d) a trade in a foreign security with a permitted client, unless the
trade is made during the security's distribution under a
prospectus that has been filed with a Canadian securities
regulatory authority;
(
e) a trade in a foreign security with an investment dealer;
(
f) a trade in any security with an investment dealer that is acting as
principal.
(3) The exemptions under subsection (2) are not available to a person or
company unless all of the following apply:
(
a) the head office or principal place of business of the person or
company is in a foreign jurisdiction;
(
b) the person or company is registered under the securities
legislation of the foreign jurisdiction in which its head office or
principal place of business is located in a category of registration
that permits it to carry on the activities in that jurisdiction that
registration as a dealer would permit it to carry on in the local
jurisdiction;
(
c) the person or company engages in the business of a dealer in the
foreign jurisdiction in which its head office or principal place of
business is located;
(
d) the person or company is acting as principal or as agent for the
issuer of the securities, for a permitted client, or for a person or
company that is not a resident of Canada;
(
e) the person or company has submitted to the securities regulatory
authority a completed Form 31-103F2 Submission to Jurisdiction
and Appointment of Agent for Service.
(4) The exemptions under subsection (2) are not available to a person or
company in respect of a trade with a permitted client unless one of the
following applies:
(
a) the permitted client is a person or company registered under the
securities legislation of a jurisdiction of Canada as an adviser or
dealer;
(
b) the person or company has notified the permitted client of all of
the following:
(
i) the person or company is not registered in Canada;
(ii) the person or company's jurisdiction of residence;
(iii) the name and address of the agent for service of process
of the person or company in the local jurisdiction;
(iv) there may be difficulty enforcing legal rights against
the person or company because it is resident outside
Canada and all or substantially all of its assets may be
situated outside of Canada.
(5) A person or company relying on subsection (2) must notify the regulator
12 months after it first submits a Form 31-103F2 under paragraph (3)(e),
and each year thereafter, if it continues to rely on subsection (2).
(6) In Ontario, subsection (5) does not apply to a person or company that
complies with the filing and fee payment requirements applicable to an
unregistered exempt international firm under Ontario Securities
Commission Rule 13-502 Fees.
8.19 Self-Directed Registered Education Savings Plan
(1) In this
section
"self-directed RESP" means an educational savings plan registered
under the Income Tax Act (Canada)
(
a) that is structured so that contributions by a subscriber to the plan
are deposited directly into an account in the name of the
subscriber, and
(
b) under which the subscriber maintains control and direction over
the plan that enables the subscriber to direct how the assets of the
plan are to be held, invested or reinvested subject to compliance
with the Income Tax Act (Canada).
(2) The dealer registration requirement does not apply in respect of a trade
in a self-directed RESP to a subscriber if both of the following apply:
(
a) the trade is made by any of the following:
(
i) a dealing representative of a mutual fund dealer who is
acting on behalf of the mutual fund dealer;
(ii) a Canadian financial institution;
(iii) in Ontario, a financial intermediary;
(
b) the self-directed RESP restricts its investments in securities to
securities in which the person or company who trades the self-
directed RESP is permitted to trade.
8.20 Exchange Contract - Alberta, British Columbia, New Brunswick and
Saskatchewan
(1) In Alberta, British Columbia and New Brunswick, the dealer registration
requirement does not apply in respect of the following trades in
exchange contracts:
(
a) a trade by a person or company made
(
i) solely through an agent who is a registered dealer, if the
dealer is registered in a category that permits the trade,
(ii) to a registered dealer who is purchasing as principal, if
the dealer is registered in a category that permits the
trade;
(
b) subject to subsection (2), a trade resulting from an unsolicited
order placed with an individual who is not a resident of, and does
not carry on business in, the local jurisdiction.
(2) An individual referred to in subsection (1)(
b) must not do any of the
following:
(
a) advertise or engage in promotional activity that is directed to
persons or companies in the local jurisdiction during the 6
months preceding the trade;
(
b) pay any commission or finder's fee to any person or company in
the local jurisdiction in connection with the trade.
(3) In Saskatchewan, the dealer registration requirement does not apply in
respect of either of the following:
(
a) a trade in an exchange contract made solely through an agent
who is a registered dealer, if the dealer is registered in a category
that permits the trade;
(
b) a trade in an exchange contract made to a registered dealer who
is purchasing as principal, if the dealer is registered in a category
that permits the trade.
8.21 Specified Debt
(1) In this
section
"approved credit rating" has the same meaning as in National
Instrument 81-102 Mutual Funds;
"approved credit rating organization" has the same meaning as in
National Instrument 81-102 Mutual Funds;
"permitted supranational agency" means any of the following:
(
a) the African Development Bank, established by the Agreement
Establishing the African Development Bank which came into
force on September 10, 1964, that Canada became a member of
on December 30, 1982;
(
b) the Asian Development Bank, established under a resolution
adopted by the United Nations Economic and Social
Commission for Asia and the Pacific in 1965;
(
c) the Caribbean Development Bank, established by the Agreement
Establishing the Caribbean Development Bank which came into
force on January 26, 1970, as amended, that Canada is a
founding member of;
(
d) the European Bank for Reconstruction and Development,
established by the Agreement Establishing the European Bank
for Reconstruction and Development and approved by the
European Bank for Reconstruction and Development Agreement
Act (Canada), that Canada is a founding member of;
(
e) the Inter-American Development Bank, established by the
Agreement establishing the Inter-American Development Bank
which became effective December 30, 1959, as amended from
time to time, that Canada is a member of;
(
f) the International Bank for Reconstruction and Development,
established by the Agreement for an International Bank for
Reconstruction and Development approved by the Bretton
Woods and Related Agreements Act (Canada);
(
g) the International Finance Corporation, established by Articles of
Agreement approved by the Bretton Woods and Related
Agreements Act (Canada).
(2) The dealer registration requirement does not apply in respect of a trade
in any of the following:
(
a) a debt security issued by or guaranteed by the Government of
Canada or the government of a jurisdiction of Canada;
(
b) a debt security issued by or guaranteed by a government of a
foreign jurisdiction if the debt security has an approved credit
rating from an approved credit rating organization;
(
c) a debt security issued by or guaranteed by a municipal
corporation in Canada;
(
d) a debt security secured by or payable out of rates or taxes levied
under the law of a jurisdiction of Canada on property in the
jurisdiction and collectible by or through the municipality in
which the property is situated;
(
e) a debt security issued by or guaranteed by a Canadian financial
institution or a
Schedule III bank, other than debt securities that
are subordinate in right of payment to deposits held by the issuer
or guarantor of those debt securities;
(
f) a debt security issued by the Comit‚ de gestion de la taxe
scolaire de l'Œle de Montr‚al;
(
g) a debt security issued by or guaranteed by a permitted
supranational agency if the debt securities are payable in the
currency of Canada or the United States of America.
(3) Paragraphs (2)(a), (
c) and (
d) do not apply in Ontario.
Note: In Ontario, exemptions from the dealer registration requirement similar
to those in paragraphs 8.21(a), (
c) and (
d) are provided under paragraph 2 of
subsection 35(1) of the Securities Act (Ontario).
8.22 Small Security Holder Selling and Purchase Arrangements
(1) In this
section
"exchange" means
(
a) TSX Inc.,
(
b) TSX Venture Exchange Inc., or
(
c) an exchange that
(
i) has a policy that is substantially similar to the policy of
the TSX Inc., and
(ii) is designated by the securities regulatory authority for
the purpose of this section;
"policy" means,
(
a) in the case of TSX Inc., sections 638 and 639 [Odd lot selling
and purchase arrangements] of the TSX Company Manual, as
amended from time to time,
(
b) in the case of the TSX Venture Exchange Inc., Policy 5.7 Small
Shareholder Selling and Purchase Arrangements, as amended
from time to time, or
(
c) in the case of an exchange referred to in paragraph (
c) of the
definition of "exchange", the rule, policy or other similar
instrument of the exchange on small shareholder selling and
purchase arrangements.
(2) The dealer registration requirement does not apply in respect of a trade
by an issuer or its agent, in securities of the issuer that are listed on an
exchange, if all of the following apply:
(
a) the trade is
an act in furtherance of participation by the holders of
the securities in an arrangement that is in accordance with the
policy of that exchange;
(
b) the issuer and its agent do not provide advice to a security holder
about the security holder's participation in the arrangement
referred to in paragraph (a), other than a description of the
arrangement's operation, procedures for participation in the
arrangement, or both;
(
c) the trade is made in accordance with the policy of that exchange,
without resort to an exemption from, or variation of, the
significant subject matter of the policy;
(
d) at the time of the trade after giving effect to a purchase under the
arrangement, the market value of the maximum number of
securities that a security holder is permitted to hold in order to be
eligible to participate in the arrangement is not more than
$25 000.
(3) For the purposes of subsection (2)(c), an exemption from, or variation
of, the maximum number of securities that a security holder is permitted
to hold under a policy in order to be eligible to participate in the
arrangement provided for in the policy is not an exemption from, or
variation of, the significant subject matter of the policy.
Division 2 Exemptions from Adviser Registration
8.23 Dealer Without Discretionary Authority
The adviser registration requirement does not apply to a registered dealer, or a
dealing representative acting on behalf of the dealer, that provides advice to a
client if the advice is
(
a) in connection with a trade in a security that the dealer and the
representative are permitted to make under his, her or its
registration,
(
b) provided by the representative, and
(
c) not in respect of a managed account of the client.
8.24 IIROC Members with Discretionary Authority
The adviser registration requirement does not apply to a registered dealer, or a
dealing representative acting on behalf of the dealer, that acts as an adviser in
respect of a client's managed account if the registered dealer is a member of
IIROC and the advising activities are conducted in accordance with the rules of
IIROC.
8.25 Advising Generally
(1) For the purposes of subsections (3) and (4), "financial or other interest"
includes the following:
(
a) ownership, beneficial or otherwise, in the security or in another
security issued by the same issuer;
(
b) an option in respect of the security or another security issued by
the same issuer;
(
c) a commission or other compensation received, or expected to be
received, from any person or company in connection with the
trade in the security;
(
d) a financial arrangement regarding the security with any person or
company;
(
e) a financial arrangement with any underwriter or other person or
company who has any interest in the security.
(2) The adviser registration requirement does not apply to a person or
company that acts as an adviser if the advice the person or company
provides does not purport to be tailored to the needs of the person or
company receiving the advice.
(3) If a person or company that is exempt under subsection (2) recommends
buying, selling or holding a specified security, a class of securities or the
securities of a class of issuers in which any of the following has a
financial or other interest, the person or company must disclose the
interest concurrently with providing the advice:
(
a) the person or company;
(
b) any partner, director or officer of the person or company;
(
c) any other person or company that would be an insider of the
first-mentioned person or company if the first-mentioned person
or company were a reporting issuer.
(4) If the financial or other interest of the person or company includes an
interest in an option described in paragraph (
b) of the definition of
"financial or other interest" in subsection (1), the disclosure required by
subsection (3) must include a description of the terms of the option.
(5) This
section does not apply in Ontario.
Note: In Ontario, measures similar to those in
section 7.24 are in
section 34 of
the Securities Act (Ontario).
8.26 International Adviser
(1) Despite
section 1.2, in Alberta, British Columbia, New Brunswick and
Saskatchewan, a reference to "securities" in this
section excludes
"exchange contracts".
(2) In this
section
"aggregate consolidated gross revenue" does not include the gross
revenue of an affiliate of the adviser if the affiliate is registered in a
jurisdiction of Canada;
"foreign security" means
(
a) a security issued by an issuer incorporated, formed or created
under the laws of a foreign jurisdiction, and
(
b) a security issued by a government of a foreign jurisdiction;
"permitted client" has the meaning given to the term in
section 1.1
[definitions] except that it excludes a person or company registered
under the securities legislation of a jurisdiction of Canada as an adviser
or dealer.
(3) The adviser registration requirement does not apply to a person or
company in respect of its acting as an adviser to a permitted client if the
adviser does not advise in Canada on securities of Canadian issuers,
unless providing that advice is incidental to its providing advice on a
foreign security.
(4) The exemption under subsection (3) is not available unless all of the
following apply:
(
a) the adviser's head office or principal place of business is in a
foreign jurisdiction;
(
b) the adviser is registered, or operates under an exemption from
registration, under the securities legislation of the foreign
jurisdiction in which its head office or principal place of business
is located, in a category of registration that permits it to carry on
the activities in that jurisdiction that registration as an adviser
would permit it to carry on in the local jurisdiction;
(
c) the adviser engages in the business of an adviser in the foreign
jurisdiction in which its head office or principal place of business
is located;
(
d) during its most recently completed financial year, not more than
10% of the aggregate consolidated gross revenue of the adviser,
its affiliates and its affiliated partnerships was derived from the
portfolio management activities of the adviser, its affiliates and
its affiliated partnerships in Canada;
(
e) before advising a client, the adviser notifies the client of all of
the following:
(
i) the adviser is not registered in Canada;
(ii) the jurisdiction of residence of the adviser;
(iii) the name and address of the adviser's agent for service
of process in the local jurisdiction;
(iv) that there may be difficulty enforcing legal rights
against the adviser because it is resident outside Canada
and all or substantially all of its assets may be situated
outside of Canada;
(
f) the adviser has submitted to the securities regulatory authority a
completed Form 31-103F2 Submission to Jurisdiction and
Appointment of Agent for Service.
(5) A person or company relying on subsection (3) must notify the regulator
12 months after it first submits a Form 31-103F2 under paragraph (4)(f),
and each year thereafter, if it continues to rely on subsection (3).
(6) In Ontario, subsection (5) does not apply to a person or company that
complies with the filing and fee payment requirements applicable to an
unregistered exempt international firm under Ontario Securities
Commission Rule 13-502 Fees.
Division 3 Exemptions from Investment Fund Manager
Registration
8.27 Private Investment Club
The investment fund manager registration requirement does not apply to a
person or company in respect of its acting as an investment fund manager for
an investment fund if all of the following apply:
(
a) the fund has no more than 50 beneficial security holders;
(
b) the fund does not seek and has never sought to borrow money
from the public;
(
c) the fund does not distribute and has never distributed its
securities to the public;
(
d) the fund does not pay or give any remuneration for investment
management or administration advice in respect of trades in
securities, except normal brokerage fees;
(
e) the fund, for the purpose of financing its operations, requires
security holders to make contributions in proportion to the value
of the securities held by them.
8.28 Capital Accumulation Plan Exemption
(1) In this section, "capital accumulation plan" means a tax assisted
investment or savings plan, including a defined contribution registered
pension plan, a group registered retirement savings plan, a group
registered education savings plan, or a deferred profit-sharing plan,
established by a plan sponsor that permits a member to make investment
decisions among two or more investment options offered within the
plan, and in Quebec and Manitoba, includes a simplified pension plan.
(2) The investment fund manager registration requirement does not apply to
a person or company that acts as an investment fund manager for an
investment fund if the person or company is only required to be
registered as an investment fund manager because the investment fund is
an investment option in a capital accumulation plan.
8.29 Private Investment Fund - Loan and Trust Pools
(1) The investment fund manager registration requirement does not apply to
a trust company or trust corporation that administers an investment fund
if all of the following apply:
(
a) the trust company or trust corporation is registered or authorized
by an enactment of Canada or a jurisdiction of Canada to carry
on business in Canada or a jurisdiction of Canada;
(
b) the fund has no promoter or investment fund manager other than
the trust company or trust corporation;
(
c) the fund commingles the money of different estates and trusts for
the purpose of facilitating investment.
(2) The exemption in subsection (1) is not available to a trust company or
trust corporation registered under the laws of Prince Edward Island
unless it is also registered under the Trust and Loan Companies Act
(Canada) or under comparable legislation in another jurisdiction of
Canada.
Division 4 Mobility Exemption - Firms
8.30 Client Mobility Exemption - Firms
The dealer registration requirement and the adviser registration requirement do
not apply to a person or company if all of the following apply:
(
a) the person or company is registered as a dealer or adviser in its
principal jurisdiction;
(
b) the person or company does not act as a dealer, underwriter or
adviser in the local jurisdiction other than as it is permitted to in
its principal jurisdiction according to its registration;
(
c) the person or company does not act as a dealer, underwriter or
adviser in the local jurisdiction other than in respect of 10 or
fewer eligible clients;
(
d) the person or company complies with Parts 13 [dealing with
clients - individuals and firms] and 14 [handling client accounts
- firms];
(
e) the person or company deals fairly, honestly and in good faith in
the course of its dealings with an eligible client.
PART 9 - MEMBERSHIP IN A SELF-REGULATORY ORGANIZATION
9.1 IIROC Membership for Investment Dealers
An investment dealer must not act as a dealer unless the investment dealer is a
"Dealer Member", as defined under the rules of IIROC.
9.2 MFDA Membership for Mutual Fund Dealers
Except in Qu‚bec, a mutual fund dealer must not act as a dealer unless the
mutual fund dealer is a "member", as defined under the rules of the MFDA.
9.3 Exemptions from Certain Requirements for SRO Members
(1) An investment dealer that is a member of IIROC is exempt from the
following requirements to the extent the provisions apply to the activities
of an investment dealer:
(
a) section 12.1 [capital requirements];
(
b) section 12.2 [notifying the regulator of a subordination
agreement];
(
c) section 12.3 [insurance - dealer];
(
d) section 12.6 [global bonding or insurance];
(
e) section 12.7 [notifying the regulator of a change, claim or
cancellation];
(
f) section 12.10 [annual financial statements];
(
g) section 12.11 [interim financial information];
(
h) section 12.12 [delivering financial information - dealer];
(
i) subsection 13.2(3) [know your client];
(
j) section 13.3 [suitability];
(
k) section 13.12 [restriction on lending to clients];
(
l) section 13.13 [disclosure when recommending the use of
borrowed money];
(
m) subsection 14.2(2) [relationship disclosure information];
(
n) section 14.6 [holding client assets in trust];
(
o) section 14.8 [securities subject to a safekeeping agreement];
(
p) section 14.9 [securities not subject to a safekeeping agreement];
(
q) section 14.12 [content and delivery of trade confirmation].
(2) Despite subsection (1), if a registered firm is a member of IIROC and is
registered as an investment fund manager, the firm is not exempt from
the following requirements:
(
a) section 12.1 [capital requirements];
(
b) section 12.2 [notifying the regulator of a subordination
agreement];
(
c) section 12.7 [notifying the regulator of a change, claim or
cancellation];
(
d) section 12.10 [annual financial statements];
(
e) section 12.11 [interim financial information].
(3) A registered firm that is a member of the MFDA is exempt from each
requirement listed in subsection (1) that applies to a mutual fund dealer
other than the following:
(
a) subsection 13.2(3) [know your client];
(
b) section 13.12 [restriction on lending to clients].
(4) Despite subsection (3), if a registered firm is a member of the MFDA
and is registered as an investment fund manager, the firm is not exempt
from the following requirements:
(
a) section 12.1 [capital requirements];
(
b) section 12.2 [notifying the regulator of a subordination
agreement];
(
c) section 12.7 [notifying the regulator of a change, claim or
cancellation];
(
d) section 12.10 [annual financial statements];
(
e) section 12.11 [interim financial information].
(5) Subsection (3) does not apply in Qu‚bec.
(6) In Qu‚bec, the requirements listed in subsection (1), other than
subsection 13.2(3) [know your client] and
section 13.12 [restriction on
lending to clients] do not apply to a mutual fund dealer if the registrant
complies with the applicable regulations on mutual fund dealer in
Qu‚bec.
PART 10 - SUSPENSION AND REVOCATION OF REGISTRATION - FIRMS
Division 1 When a Firm's Registration is Suspended
10.1 Failure to Pay Fees
(1) In this section, "annual fees" means
(
a) in Alberta, the fees required under
section 2.1 of the
Schedule -
Fees in Alta. Reg. 115/95 - Securities Regulation,
(
b) in British Columbia, the annual fees required under
section 22 of
the Securities Regulation, B.C. Reg. 196/97,
(
c) in Manitoba, the fees required under paragraph 1.(2)(
a) of the
Manitoba Fee Regulation, M.R 491\88R,
(
d) in New Brunswick, the fees required under
section 2.2 (
c) of
Local Rule 11-501 Fees,
(
e) in Newfoundland and Labrador, the fees required under
section
143 of the Securities Act,
(
f) in Nova Scotia, the fees required under
Part XIV of the
Regulations,
(
g) in Northwest Territories, the fees required under sections 1(
c) and 1(
e) of the Securities Fee regulations, R-066-2008;
(
h) in Nunavut, the fees required under
section 1(
a) of the
Schedule
to R-003-2003 to the Securities Fee regulation, R.R.N.W.T.
1990, c.20,
(
i) in Prince Edward Island, the fees required under
section 175 of
the Securities Act R.S.P.E.I., Cap. S-3.1,
(
j) in Qu‚bec, the fees required under
section 271.5 of the Qu‚bec
Securities Regulation,
(
k) in Saskatchewan, the annual registration fees required to be paid
by a registrant under
section 176 of The Securities Regulations
(Saskatchewan), and
(
l) in Yukon, the fees required under O.I.C. 2009\66, pursuant to
section 168 of the Securities Act.
(2) If a registered firm has not paid the annual fees by the 30th day after the
date the annual fees were due, the registration of the firm is suspended
until reinstated or revoked under securities legislation.
10.2 If IIROC Membership is Revoked or Suspended
If IIROC revokes or suspends a registered firm's membership, the firm's
registration in the category of investment dealer is suspended until reinstated or
revoked under securities legislation.
10.3 If MFDA Membership is Revoked or Suspended
Except in Qu‚bec, if the MFDA revokes or suspends a registered firm's
membership, the firm's registration in the category of mutual fund dealer is
suspended until reinstated or revoked under securities legislation.
10.4 Activities not Permitted while a Firm's Registration is Suspended
If a registered firm's registration in a category is suspended, the firm must not
act as a dealer, an underwriter, an adviser, or an investment fund manager, as
the case may be, under that category.
Division 2 Revoking a Firm's Registration
10.5 Revocation of a Suspended Registration - Firm
If a registration has been suspended under this Part and it has not been
reinstated, the registration is revoked on the 2nd anniversary of the suspension.
10.6 Exception for Firms Involved in a Hearing
Despite
section 10.5, if a hearing concerning a suspended registrant is
commenced under securities legislation or under the rules of an SRO, the
registrant's registration remains suspended.
10.7 Application of
Part 10 in Ontario
Other than
section 10.4 [activities not permitted while a firm's registration is
suspended], this Part does not apply in Ontario.
Note: In Ontario, measures governing suspension in
section 29 of the
Securities Act (Ontario) are similar to those in Parts 6 and 10.
PART 11 - INTERNAL CONTROLS AND SYSTEMS
Division 1 Compliance
11.1 Compliance System
A registered firm must establish, maintain and apply policies and procedures
that establish a system of controls and supervision sufficient to
(
a) provide reasonable assurance that the firm and each individual
acting on its behalf complies with securities legislation, and
(
b) manage the risks associated with its business in accordance with
prudent business practices.
11.2 Designating an Ultimate Designated Person
(1) A registered firm must designate an individual who is registered under
securities legislation in the category of ultimate designated person to
perform the functions described in
section 5.1 [responsibilities of the
ultimate designated person].
(2) A registered firm must not designate an individual to act as the firm's
ultimate designated person unless the individual is one of the following:
(
a) the chief executive officer or sole proprietor of the registered
firm;
(
b) an officer in charge of a division of the registered firm, if the
activity that requires the firm to register occurs only within the
division;
(
c) an individual acting in a capacity similar to that of an officer
described in paragraph (
a) or (b).
(3) If an individual who is registered as a registered firm's ultimate
designated person ceases to meet any of the conditions listed in
subsection (2), the registered firm must designate another individual to
act as its ultimate designated person.
11.3 Designating a Chief Compliance Officer
(1) A registered firm must designate an individual who is registered under
securities legislation in the category of chief compliance officer to
perform the functions described in
section 5.2 [responsibilities of the
chief compliance officer].
(2) A registered firm must not designate an individual to act as the firm's
chief compliance officer unless the individual has satisfied the
applicable conditions in
Part 3 [registration requirements - individuals]
and the individual is one of the following:
(
a) an officer or partner of the registered firm;
(
b) the sole proprietor of the registered firm.
(3) If an individual who is registered as a registered firm's chief compliance
officer ceases to meet any of the conditions listed in subsection (2), the
registered firm must designate another individual to act as its chief
compliance officer.
11.4 Providing Access to Board
A registered firm must permit its ultimate designated person and its chief
compliance officer to directly access the firm's board of directors, or
individuals acting in a similar capacity for the firm, at such times as the
ultimate designated person or the chief compliance officer may consider
necessary or advisable in view of his or her responsibilities.
Division 2 Books and Records
11.5 General Requirements for Records
(1) A registered firm must maintain records to
(
a) accurately record its business activities, financial affairs, and
client transactions, and
(
b) demonstrate the extent of the firm's compliance with applicable
requirements of securities legislation.
(2) The records required under subsection (1) include, but are not limited to,
records that do the following:
(
a) permit timely creation and audit of financial statements and other
financial information required to be filed or delivered to the
securities regulatory authority;
(
b) permit determination of the registered firm's capital position;
(
c) demonstrate compliance with the registered firm's capital and
insurance requirements;
(
d) demonstrate compliance with internal control procedures;
(
e) demonstrate compliance with the firm's policies and procedures;
(
f) permit the identification and segregation of client cash,
securities, and other property;
(
g) identify all transactions conducted on behalf of the registered
firm and each of its clients, including the parties to the
transaction and the terms of the purchase or sale;
(
h) provide an audit trail for
(
i) client instructions and orders, and
(ii) each trade transmitted or executed for a client or by the
registered firm on its own behalf;
(
i) permit the generation of account activity reports for clients;
(
j) provide securities pricing as may be required by securities
legislation;
(
k) document the opening of client accounts, including any
agreements with clients;
(
l) demonstrate compliance with sections 13.2 [know your client]
and 13.3 [suitability];
(
m) demonstrate compliance with complaint-handling requirements;
(
n) document correspondence with clients;
(
o) document compliance and supervision actions taken by the firm.
(1) A registered firm must keep a record that it is required to keep under
securities legislation
(
a) for 7 years from the date the record is created,
(
b) in a safe location and in a durable form, and
(
c) in a manner that permits it to be provided to the regulator or the
securities regulatory authority in a reasonable period of time.
(2) A record required to be provided to the regulator or the securities
regulatory authority must be provided in a format that is capable of
being read by the regulator or the securities regulatory authority.
(3) Paragraph (1)(
c) does not apply in Ontario.
Note: In Ontario, how quickly a registered firm is required to provide
information to the regulator is addressed in subsection 19(3) of the Securities
Act (Ontario).
Division 3 Certain Business Transactions
11.7 Tied Settling of Securities Transactions
A registered firm must not require a person or company to settle that person's
or company's transaction with the registered firm through that person's or
company's account at a Canadian financial institution as a condition, or on
terms that would appear to a reasonable person to be a condition, of supplying
a product or service, unless this method of settlement would be, to a reasonable
person, necessary to provide the specific product or service that the person or
company has requested.
11.8 Tied Selling
A dealer, adviser or investment fund manager must not require another person
or company
(
a) to buy, sell or hold a security as a condition, or on terms that
would appear to a reasonable person to be a condition, of
supplying or continuing to supply a product or service, or
(
b) to buy, sell or use a product or service as a condition, or on terms
that would appear to a reasonable person to be a condition, of
buying or selling a security.
11.9 Registrant Acquiring a Registered Firm's Securities or Assets
(1) A registrant must give the regulator written notice in accordance with
subsection (2) if it proposes to acquire any of the following:
(
a) beneficial ownership of, or direct or indirect control or direction
over, a security of a registered firm;
(
b) beneficial ownership of, or direct or indirect control or direction
over, a security of a person or company of which a registered
firm is a subsidiary;
(
c) all or a substantial part of the assets of a registered firm.
(2) The notice required under subsection (1) must be delivered to the
regulator at least 30 days before the proposed acquisition and must
include all relevant facts regarding the acquisition sufficient to enable
the regulator to determine if the acquisition is
(
a) likely to give rise to a conflict of interest,
(
b) likely to hinder the registered firm in complying with securities
legislation,
(
c) inconsistent with an adequate level of investor protection, or
(
d) otherwise prejudicial to the public interest.
(3) Subsection (1) does not apply to the following:
(
a) a proposed acquisition in connection with an amalgamation,
merger, arrangement, reorganization or treasury issue if the
beneficial ownership of, or direct or indirect control or direction
over, the person or company whose security is to be acquired
will not change;
(
b) a registrant who, alone or in combination with any other person
or company, proposes to acquire securities that, together with the
securities already beneficially owned, or over which direct or
indirect control or direction is already exercised, do not exceed
more than 10% of any class or series of securities that are listed
and posted for trading on an exchange.
(4) Except in Ontario and British Columbia, if, within 30 days of the
regulator's receipt of a notice under subsection (1), the regulator notifies
the registrant making the acquisition that the regulator objects to the
acquisition, the acquisition must not occur until the regulator approves
it.
(5) In Ontario, if, within 30 days of the regulator's receipt of a notice under
subsection (1)(
a) or (c), the regulator notifies the registrant making the
acquisition that the regulator objects to the acquisition, the acquisition
must not occur until the regulator approves it.
(6) Following receipt of a notice of objection under subsection (4) or (5), the
person or company who submitted the notice to the regulator may
request an opportunity to be heard on the matter.
11.10 Registered Firm whose Securities are Acquired
(1) A registered firm must give the regulator written notice in accordance
with subsection (2) if it knows or has reason to believe that any person
or company, alone or in combination with any other person or company,
is about to acquire, or has acquired, beneficial ownership of, or direct or
indirect control or direction over, 10% or more of any class or series of
voting securities of any of the following:
(
a) the registered firm;
(
b) a person or company of which the registered firm is a subsidiary.
(2) The notice required under subsection (1) must,
(
a) be delivered to the regulator as soon as possible,
(
b) include the name of each person or company involved in the
acquisition, and
(
c) after the registered firm has applied reasonable efforts to gather
all relevant facts, include facts regarding the acquisition
sufficient to enable the regulator to determine if the acquisition is
(
i) likely to give rise to a conflict of interest,
(ii) likely to hinder the registered firm in complying with
securities legislation,
(iii) inconsistent with an adequate level of investor
protection, or
(iv) otherwise prejudicial to the public interest.
(3) This
section does not apply to an amalgamation, merger, arrangement,
reorganization or treasury issue in which the beneficial ownership of a
registered firm does not change.
(4) This
section does not apply if notice of the transaction was provided
under
section 11.9 [registrant acquiring a registered firm's securities or
assets].
(5) Except in British Columbia and Ontario, if, within 30 days of the
regulator's receipt of a notice under subsection (1), the regulator notifies
the person or company making the acquisition that the regulator objects
to the acquisition, the acquisition must not occur until the regulator
approves it.
(6) In Ontario, if, within 30 days of the regulator's receipt of a notice under
subsection (1)(a), the regulator notifies the person or company making
the acquisition that the regulator objects to the acquisition, the
acquisition must not occur until the regulator approves it.
(7) Following receipt of a notice of objection under subsection (5) or (6), the
person or company proposing to make the acquisition may request an
opportunity to be heard on the matter.
PART 12 - FINANCIAL CONDITION
Division 1 Working Capital
12.1 Capital Requirements
(1) If, at any time, the excess working capital of a registered firm, as
calculated using Form 31-103F1 Calculation of Excess Working Capital,
is less than zero, the registered firm must notify the regulator as soon as
possible.
(2) A registered firm must ensure that its excess working capital, as
calculated using Form 31-103F1 Calculation of Excess Working Capital,
is not less than zero for 2 consecutive days.
(3) For the purpose of completing Form 31-103F1 Calculation of Excess
Working Capital, the minimum capital is
(a) $25,000, for a registered adviser that is not also a registered
dealer or a registered investment fund manager,
(b) $50,000, for a registered dealer that is not also a registered
investment fund manager, and
(c) $100,000, for a registered investment fund manager.
(4) Paragraph (3)(
c) does not apply to a registered investment fund manager
that is exempt from the dealer registration requirement under
section 8.6
[adviser - non-prospectus qualified investment fund] in respect of all
investment funds for which it acts as adviser.
12.2 Notifying the Regulator of a Subordination Agreement
If a registered firm has executed a subordination agreement, the effect of which
is to exclude an amount from its long-term related party debt as calculated on
Form 31-103F1 Calculation of Excess Working Capital, the firm must notify
the regulator 5 days before it
(
a) repays the loan or any part of the loan, or
(
b) terminates the agreement.
Division 2 Insurance
12.3 Insurance - Dealer
(1) A registered dealer must maintain bonding or insurance
(
a) that contains the clauses set out in Appendix A [bonding and
insurance clauses], and
(
b) that provides for a double aggregate limit or a full reinstatement
of coverage.
(2) A registered dealer must maintain bonding or insurance in respect of
each clause set out in Appendix A and in the highest of the following
amounts for each clause:
(a) $50,000 per employee, agent and dealing representative or
$200,000, whichever is less;
(
b) one per cent of the total client assets that the dealer holds or has
access to, as calculated using the dealer's most recent financial
records, or $25,000,000, whichever is less;
(
c) one per cent of the dealer's total assets, as calculated using the
dealer's most recent financial records, or $25,000,000,
whichever is less;
(
d) the amount determined to be appropriate by a resolution of the
dealer's board of directors, or individuals acting in a similar
capacity for the firm.
(3) In Qu‚bec, this
section does not apply to a scholarship plan dealer or a
mutual fund dealer registered only in Qu‚bec.
12.4 Insurance - Adviser
(1) A registered adviser must maintain bonding or insurance
(
a) that contains the clauses set out in Appendix A [bonding and
insurance clauses], and
(
b) that provides for a double aggregate limit or a full reinstatement
of coverage.
(2) A registered adviser that does not hold or have access to client assets
must maintain bonding or insurance in respect of each clause set out in
Appendix A and in the amount of $50,000 for each clause.
(3) A registered adviser that holds or has access to client assets must
maintain bonding or insurance in respect of each clause set out in
Appendix A and in the highest of the following amounts for each clause:
(
a) one per cent of assets under management that the adviser holds
or has access to, as calculated using the adviser's most recent
financial records, or $25,000,000, whichever is less;
(
b) one per cent of the adviser's total assets, as calculated using the
adviser's most recent financial records, or $25,000,000,
whichever is less;
(c) $200,000;
(
d) the amount determined to be appropriate by a resolution of the
adviser's board of directors or individuals acting in a similar
capacity for the firm.
12.5 Insurance - Investment Fund Manager
(1) A registered investment fund manager must maintain bonding or
insurance
(
a) that contains the clauses set out in Appendix A [bonding and
insurance clauses], and
(
b) that provides for a double aggregate limit or a full reinstatement
of coverage.
(2) A registered investment fund manager must maintain bonding or
insurance in respect of each clause set out in Appendix A and in the
highest of the following amounts for each clause:
(
a) one per cent of assets under management, as calculated using the
investment fund manager's most recent financial records, or
$25,000,000, whichever is less;
(
b) one per cent of the investment fund manager's total assets, as
calculated using the investment fund manager's most recent
financial records, or $25,000,000, whichever is less;
(c) $200,000;
(
d) the amount determined to be appropriate by a resolution of the
investment fund manager's board of directors or individuals
acting in a similar capacity for the firm.
12.6 Global Bonding or Insurance
A registered firm may not maintain bonding or insurance under this Division
that benefits, or names as an insured, another person or company unless the
bond provides, without regard to the claims, experience or any other factor
referable to that other person or company, the following:
(
a) the registered firm has the right to claim directly against the
insurer in respect of losses, and any payment or satisfaction of
those losses must be made directly to the registered firm;
(
b) the individual or aggregate limits under the policy may only be
affected by claims made by or on behalf of
(
i) the registered firm, or
(ii) a subsidiary of the registered firm whose
financial results are consolidated with those of
the registered firm.
12.7 Notifying the Regulator of a Change, Claim or Cancellation
A registered firm must, as soon as possible, notify the regulator in writing of
any change in, claim made under, or cancellation of any insurance policy
required under this Division.
Division 3 Audits
12.8 Direction by a Regulator to Conduct an Audit or Review
A registered firm must direct its auditor in writing to conduct any audit or
review required by the regulator during its registration and must submit a copy
of the direction to the regulator
(
a) with its application for registration, and
(
b) no later than the 7th day after the registered firm changes its
auditor.