Final Rule (effective June 17, 1997): OSC Rule - 46-501 - Self-Directed Registered Education Savings Plans

NOTICE OF FINAL RULE UNDER THE SECURITIES ACT
RULE 46-501
SELF-DIRECTED REGISTERED EDUCATION SAVINGS PLANS

On June 2, 1997 the Minister of Finance approved Rule 46-501: Self-Directed Registered Education Savings Plans (the "Rule").

The Rule came into force onJune 17, 1997.

The Rule is published in Chapter 5 of the Bulletin.

PART 1 DEFINITIONS

1.1 Definitions - In this Rule

"Minister of National Revenue" means the Minister of National Revenue for Canada;

"self-directed RESP" means an RESP

(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 ITA; and

"subscriber" means a person who signs an application form for a self-directed RESP and makes a contribution under that self-directed RESP.

PART 2 REGISTRATION AND PROSPECTUS EXEMPTIONS

2.1 Registration Exemption - Section 25 of the Act does not apply to a trade in a self-directed RESP if

(a) the trade is made by

(i) a mutual fund dealer or a person registered as a salesperson, partner or officer of a mutual fund dealer and who is acting on behalf of that mutual fund dealer,or

(ii) a financial intermediary or a person who is an officer, salesperson or employee of a financial intermediary and who is acting on behalf of that financialintermediary; and

(b) the self-directed RESP restricts its investments in securities to securities in which the person or company who traded the self-directed RESP is permitted totrade.

2.2 Prospectus Exemption - Section 53 of the Act does not apply to a trade in a self-directed RESP if the application form provided to a subscriber for purposesof establishing the self-directed RESP includes, or is accompanied by, a copy of the provisions of the self-directed RESP and any additional documentation thatmay be necessary to provide disclosure of the following:

1. The income tax consequences of investing in a self-directed RESP.

2. The responsibilities of the trustee under the self-directed RESP.

3. The refund provisions.

4. The types of investments in which the assets of the self-directed RESP may be invested or reinvested.

5. The persons who may be designated as, and the procedures for designation of, a beneficiary under the self-directed RESP.

6. The nature of any payments that may be made by the self-directed RESP to a beneficiary under the self-directed RESP.