Securities Law & Instruments
ONTARIO SECURITIES COMMISSION RULE 33-502
MUTUAL FUND SECURITIES
PART 1 DEFINITIONS 1
1.1 Definitions 1
PART 2 STATEMENT OF CONFLICT POLICIES NOT REQUIRED 2
2.1 Statement of Conflict Policies Not Required 2
PART 3 DISTRIBUTIONS OF MUTUAL FUND SECURITIES 2
3.1 Distributions of Mutual Fund Securities 2
PART 4 CONFIRMATION OF TRADES, ADVERTISING ANDRECOMMENDATIONS 2
4.1 Notice and Disclosure 2
4.2 Objection 3
MUTUAL FUND SECURITIES
PART 1 DEFINITIONS
1.1 Definitions - In this Rule
"associated mutual fund securities" for a registrant means securitiesissued by a dealer managed mutual fund if the registrant is, or is anaffiliate of, the dealer manager of the mutual fund issuer;
"dealer managed mutual fund" means a mutual fund the portfolioadviser of which is a dealer manager;
"dealer manager" means
(a) a dealer, other than a mutual fund dealer or limited marketdealer, that acts as a portfolio adviser,
(b) a portfolio adviser in which a dealer, other than a mutualfund dealer or limited market dealer, or a partner, director,officer, salesperson or principal shareholder of a dealer,other than a mutual fund dealer or limited market dealer,directly or indirectly owns of record or beneficially, orexercises control or direction over, securities carrying morethan 10 percent of the total votes attaching to securities ofthe portfolio adviser, or
(c) a partner, director or officer of a portfolio adviser referred toin paragraph (b); and
"portfolio adviser" means a person or company that provides investmentadvice or portfolio management services under a contract with a mutualfund or with the manager of the mutual fund.
PART 2 STATEMENT OF CONFLICT POLICIES NOT REQUIRED
2.1 Statement of Conflict Policies Not Required - A fully registered dealeris not required to comply with section 223 of the Regulation for associatedmutual fund securities.
PART 3 DISTRIBUTIONS OF MUTUAL FUND SECURITIES
3.1 Distributions of Mutual Fund Securities
(1) A registrant is not subject to the prohibition in subsection 224(1) ofthe Regulation from acting as an underwriter or selling groupmember for a distribution of mutual fund securities.
(2) Subsection (1) ceases to be effective on the date subsection224(1) of the Regulation is revoked.
PART 4 CONFIRMATION OF TRADES, ADVERTISING ANDRECOMMENDATIONS
4.1 Notice and Disclosure
(1) If a fully registered dealer delivers to the Director a written notice ofits intention to rely on this Part and the Director does not inform itof the Director's objection within 15 days after receipt of the notice,the dealer
(a) is not required, for associated mutual fund securities, tocomply with section 226 of the Regulation; and
(b) may recommend, or co-operate with any other person orcompany in making a recommendation, that associatedmutual fund securities be purchased, sold or held.
(2) Despite paragraph (1)(b), a fully registered dealer may, in anymedium of communication, recommend, or co-operate with anyother person or company in making a recommendation, thatassociated mutual fund securities be purchased, sold or heldwithout delivering a notice to the Director if the dealer'srelationship with the issuer of the associated mutual fund securitiesis disclosed in the communication.
(3) The notice referred to in subsection (1) shall set out the name ofthe fully registered dealer and the name of the issuer of theassociated mutual fund securities.
4.2 Objection - The Director shall only object to reliance on section 4.1 ofthis Rule if the name of the fully registered dealer and the name of theissuer of the associated mutual fund securities are not sufficiently similarto disclose the relationship between the fully registered dealer and theissuer of the associated mutual fund securities.