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National Instrument 31-103 Registration Requirements, Exemptions and Ongoing Registrant Obligations (NI 31-103) and its Companion Policy are facing the fifth round of amendments since implementation in September 2009. The Canadian Securities Administrators published proposed amendments to NI 31-103 and related instruments on December 5, 2013 [available here] which range from technical adjustments to more substantive measures intended to establish the regulatory approaches on long-standing issues, resolve ambiguities and clarify regulatory intentions.
In addition to proposed amendments to NI 31-103, the CSA also propose amendments to National Instrument 33-109 Registration Information (NI 33-109) and its Companion Policy and National Instrument 52-107 Acceptable Accounting Principles and Auditing Standards and its Companion Policy. Proposed amendments to OSC Rule 33-506 (Commodity Futures Act) Registration Information and its Companion Policy mirror the amendments to the various registration related forms in NI 33-109.
The comment period on this latest package of proposed amendments ends March 5, 2014.
There is something for everyone in the proposed amendments.
- Exempt market dealers will be particularly impacted by the proposal to significantly limit the activities that they may conduct.
- CCOs of all categories of registered dealer (except investment dealers) will be subject to enhanced proficiency requirements.
- International portfolio managers will be able to rely on a new nationally-consistent "sub-adviser" exemption.
- Exempt international firms (international advisers and international dealers) will not be able to register in one province, while relying on the applicable registration exemptions in other jurisdictions.
- A short-term debt exemption will be available to certain financial institutions.
- Investment fund managers will need to report NAV adjustments using a new form.
- Firm representatives who serve on the boards of reporting issuers or have outside business activities, including "positions of influence", will have enhanced disclosure obligations, as well as expectations on management of the conflicts of interest raised by these activities.
- All registrants will use updated registration-related forms to provide information to the regulators.
As with the existing iteration of NI 31-103, it is particularly important to review the new proposed provisions of the Companion Policy, which provide greater clarity on regulatory expectations, and in some cases, enhance the base requirements of rules.
BLG's latest Investment Management Bulletin Just in Time for the Holidays - Another Round of Significant Amendments Proposed for National Instrument 31-103 [ available here] provides more detail on the new proposals and describes the expected impact on market participants.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
