Final Rule (effective September 4, 1997): OSC Rule - 31-501 - Registrant Relationships

 

RULE 31-501- REGISTRANT RELATIONSHIPS - NOTICE OF RULE UNDER THESECURITIES ACT

ONTARIO SECURITIES COMMISSION RULE 31-501

REGISTRANT RELATIONSHIPS

PART 1 REGISTRATION OF SALESPERSONS

1.1 Registration of Salespersons

(1) No person registered as a salesperson of a registrant shall act or be registered as a director, partner or officer of the registrantor as a salesperson, officer, partner or director of another registrant.

(2) Despite subsection (1) a person registered as a salesperson of a registrant may act as a director of the registrant if he or she

(a) is not involved in supervision or compliance functions of the registrant; or

(b) satisfies the proficiency requirements of securities legislation for registration as an officer or partner of the registrant.

PART 2 DISCLOSURE OF RELATED REGISTRANT

2.1 Principal Shareholder, Officer, Partner and Director

(1) A person or company that

(a) applies for registration or for renewal or reinstatement of registration or amends its registration; and

(b) has a principal shareholder, officer, partner or director that is a principal shareholder, officer, partner or director of anotherregistrant;

shall

(c) disclose in the application or amendment the details of the relationship and the business reasons for the relationship;

(d) adopt policies and procedures to minimize the potential for conflict of interest resulting from the relationship; and

(e) disclose to a customer in writing, before initially effecting a trade or providing advice to the customer and once in each calendaryear after that, the details of the relationship and the policies and procedures adopted to minimize the potential for conflict of interestresulting from the relationship.

(2) Despite paragraph (1)(c) new disclosure is not required to be made by the applicant to the Commission or customers if therehave been no changes to the disclosure previously provided to the Commission on an application or amendment by the applicant.

(3) Despite paragraph (1)(e) new disclosure is not required to be made to customers if there have been no changes to thedisclosure previously provided to the customer.

2.2 Associates

(1) An individual who

(a) applies for registration, or for renewal or reinstatement of registration, other than as a salesperson or amends his or herregistration; and

(b) is an associate of another individual who is a registrant or a principal shareholder, officer, partner or director of a registrant

shall disclose in the application or amendment the details of the relationship.

(2) Despite subsection (1) new disclosure is not required to be made by the applicant to the Commission if there have been nochanges to the disclosure previously provided to the Commission on an application or amendment by the applicant.

PART 3 EXEMPTION

3.1 Exemption - The Director may grant an exemption to this Rule, in whole or in part, subject to such conditions or restrictions asmay be imposed in the exemption.