Notice and Proposed Changes to Rule: OSC Rule - 31-502 - Proficiency Requirements for Registrants

 

NOTICE OF MINISTER OF FINANCE REQUEST FOR
FURTHER CONSIDERATION
RULE 31-502
PROFICIENCY REQUIREMENTS FOR REGISTRANTS

On October 13, 1998, the Commission delivered Rule 31-502 Proficiency Requirementsfor Registrants (the "Rule") to the Minister of Finance for approval pursuant to section143.3 of the Securities Act. On December 1, 1998 the Minister of Finance returned theRule to the Commission for further consideration. The Commission is publishing thisnotice in accordance with section 143.6 of the Securities Act.

The Commission intends to amend the Rule to remove the notion of restricted licenceswithin full service dealers and then move to make the amended Rule final.

The Commission understands that since the January 1998 publication of the Rulecontaining these provisions, the IDA has registered mutual fund salespersons as restrictedrepresentatives of IDA member firms. The Commission did not object to the IDAregistering these sales people.

The Commission does not wish to unduly prejudice the IDA members and representativeswho acted in good faith in this regard, so rather than requiring all affected representativesto immediately meet the full service representative standards, the Commission is preparedto make the following accommodation:

1. Salespersons currently registered as mutual fund sales representatives of IDAmember firms will be grandfathered from having to meet the full service proficiencyrequirements while they remain employed by their current member firm. Shouldthey transfer to another full service dealer, they will be obliged to qualify as fullrepresentatives before being registered, as though they were new entrants; that is,pass the Canadian Securities Course, the Conduct and Practises Handbookexamination and take the 3 month training course.

2. The Commission also understands that some offers of employment have beenmade by full service dealers to various mutual fund salespeople on the strength ofthe draft Rule. The Commission is prepared to allow the IDA to register salesrepresentatives in the restricted mutual fund sales category, if those applicantshave been hired by member firms before December 31, 1998. Each person'sregistration would be subject to the condition that he or she qualify and beregistered as a full representative within nine months of the date he or she isregistered as a mutual fund salesperson with the member firm. If any time withinthat nine months, a sales representative moves to another full service dealer, heor she will be treated as a new entrant as above.

Reference:

Randee Pavalow
Market Regulation
Ontario Securities Commission
(416) 593-8257

Dirk de Lint
Market Regulation
Ontario Securities Commission
(416) 593-8090