Dealers, Advisers and Investment Fund Managers
On September 28, 2009, a new Canada-wide regime for registrants came into force. In Ontario, these reforms were introduced through a combination of amendments to the Securities Act (Ontario), National Instrument 31-103 Registration Requirements and Exemptions and amendments to related rules. On July 11, 2011, amendments to this regime for registrants came into force, including changing the name of National Instrument 31-103 Registration Requirements and Exemptions to National Instrument 31-103 Registration Requirements, Exemptions and Ongoing Registrant Obligations (NI 31-103). Transition periods apply to some of the requirements.
Registered firms are subject to many ongoing requirements under the new registration regime. For example, registered firms must:
- have an effective compliance system
- meet certain business conduct requirements
- meet financial reporting, working capital, insurance and bonding requirements
- notify us of updates to registration information
The OSC conducts compliance reviews to monitor whether firms are complying with securities law. For more information, see OSC Compliance Reviews.
In addition to securities law, registered firms and individuals are required to comply with the Criminal Code and any other legislation that is relevant to their business, such as money laundering prevention, the regulation of corporations, partnerships and trusts, and privacy rights.
All registered firms and international dealers and international advisers are required to comply with federal laws relating to terrorist financing and United Nations sanctions, and to file a report to this effect with their principal regulator. For more information, see CSA Staff Notice 31-317 Reporting Obligations Relating to Terrorist Financing for Registrants, Exempt International Dealers, and Exempt International Advisers.
A firm registered as an investment dealer or a mutual fund dealer is generally required to be a member of a self-regulatory organization (SRO). In general, a firm carrying on more than one type of activity requiring registration must register in each applicable category. The firm will have to comply with the requirements of all categories in which it is registered.
If a firm is registered in multiple categories, it must meet the most stringent of the proficiency requirements for the firm’s various categories of registration.
A firm that is a member of an SRO and its dealing representatives are exempt from certain requirements in NI 31-103. This is because the SRO has its own rules for these matters. For more information, see sections 3.16 and 9.3 of NI 31-103.
The Investment Industry Regulatory Organization of Canada (IIROC) works with the OSC to oversee investment dealers. Investment dealers should refer to the IIROC website for more information about the additional rules that apply to IIROC members.
The Mutual Fund Dealers Association of Canada (MFDA) works with the OSC to oversee mutual fund dealers. Mutual fund dealers should refer to the MFDA website for more information about the additional rules that apply to MFDA members.
For more information:
- National Instrument 31-103 Registration Requirements, Exemptions and Ongoing Registrant Obligations
- CSA Staff Notice 31-311 Proposed National Instrument 31-103 Registration Requirements and Exemptions – Transition into the New Registration Regime
- Omnibus orders, blanket orders and transitional relief relating to new registration regime
- United Nations Suppression of Terrorism & United Nations Act Sanctions Reporting Requirements and Forms