Notice, Proposed National Instrument and Proposed Companion Policy: NI - 31-101 - National Registration System
Notice, Proposed National Instrument and Proposed Companion Policy: NI - 31-101 - National Registration System
NOTICE OF PROPOSED NATIONAL INSTRUMENT 31-101MUTUAL RELIANCE REVIEW SYSTEM FOR REGISTRATION AND COMPANION POLICY 31-101CP
AND NOTICE OF PROPOSED AMENDMENT TO
RULE 31-501 REGISTRANT RELATIONSHIPS AND
RULE 31-504 APPLICATIONS FOR REGISTRATION
Substance and Purpose of the Proposed National Instrument and Companion Policy
The substance and purpose of the proposed National Instrument and Companion Policy are to establish a mutual reliance review system for applications forregistration, reinstatement of registration and renewal of registration. The National Instrument permits certain dealers and advisers that are registered or applyfor registration in more than one jurisdiction to maintain or obtain their registration, reinstatement of registration or renewal of registration by using the formsand meeting the initial conditions of obtaining registration or conditions for reinstatement or renewal of registration of Canadian securities legislation of only onejurisdiction, rather than those of all jurisdictions in which the dealer or adviser is registered or is applying for registration, reinstatement of registration or renewalof registration.
The National Instrument prescribes how a principal regulator will be determined. For a firm that has its head office in Canada, the Canadian regulator in thejurisdiction in which the firm maintains its head office will act as the principal regulator for the filer under the mutual reliance review system for registration. Foran individual filer that is a resident of Canada, the regulator in the jurisdiction in which the individual is resident will act as the principal regulator. Fornon-resident filers and filers that do not have their head office in Canada, the filer will request a regulator to act as its principal regulator. The mutual reliancereview system for registration is intended to reduce the time and cost associated with complying with the initial conditions of obtaining or maintainingregistration in other jurisdictions in which the filer applies for or maintains registration, and to reduce the amount of time necessary to complete a registration.
The ongoing registration requirements, other than renewal or annual delivery requirements, under Canadian securities legislation in each jurisdiction in which aperson or company registers will continue to be applicable.
In order to further streamline the mutual reliance review system for registration it is intended that Canadian securities legislation in all jurisdictions will beamended to provide for a permanent registration model. Under the mutual reliance review system for registration filers will be required to comply with the annualdelivery requirements of Canadian securities legislation in the filer's principal jurisdiction.
The proposed National Instrument is derived in part from draft National Policy Statement No.54 ("Draft NP54"), which was first published by the CanadianSecurities Administrators (the "CSA") for comment in April 1995. The proposed National Instrument is in part a new initiative of the CSA as it expands theproposed mutual reliance review system for registration under Draft NP54 to foreign based advisers and to dealers that are members of a self-regulatoryorganization (a "SRO") in each local jurisdiction in which they are applying for registration under the system.
Arrangements among the CSA with respect to a mutual reliance review system have been formulated as a Memorandum of Understanding (the "MOU"), amongthe CSA. The draft MOU is also being published for comment. The proposed MOU is to be made among all of the Canadian securities regulatory authorities. Itis intended to set out the roles and responsibilities assumed by the securities regulatory authorities in the mutual reliance review system generally. The NationalInstrument sets out requirements and the Companion Policy provides guidance on the mutual reliance review system for registration.
The proposed National Instrument implements, in part, the recommendation of the CSA Task Force on Operational Efficiencies that Canadian securitiesregulatory authorities extend the application of a designated jurisdiction concept by introducing the principal regulator concept for registrants.
The proposed Companion Policy provides an overview of the mutual reliance review system for registration including how the regulators will deal with oneanother for registrations, reinstatements of registration and renewals of registration under the system.
The Companion Policy provides information on the choice of principal regulators for filers that are resident in a foreign jurisdiction or whose head office is in aforeign jurisdiction. It also provides guidance on how a Canadian resident filer may apply for an exemption from the principal regulator requirements in theNational Instrument.
The Companion Policy provides that the CSA members involved in the system will accept registration materials in either of the official languages of Canada. Italso sets out a number of provisions relating to the MRRS Decision Document including its form, contents, and when it will be issued. The Companion Policyadvises filers on how conditions of registration will be dealt with on the initial registration and on an ongoing basis. It also provides for certain specified minimumproficiency for advisers who intend to register under the system. Finally, the Companion Policy advises registrants that there are other requirements either inCanadian securities legislation or Canadian securities directions of which they should be aware and that would apply to their registration.
Terms used and not defined in the proposed Companion Policy that are defined or interpreted in the National Instrument or a definition instrument in force in thejurisdiction should be read in accordance with the National Instrument or definition instrument, unless the context otherwise requires.
The proposed National Instrument and Companion Policy are initiatives of the CSA. The National Instrument is expected to be adopted as a rule in each ofBritish Columbia, Alberta, Ontario and Nova Scotia, as a Commission regulation in Saskatchewan and as a policy in each of the other jurisdictions representedby the CSA. The Companion Policy is expected to be adopted as a policy in all jurisdictions represented by the CSA.
Substance and Purpose of the Proposed Amendment to Rule 31-501 Registrant Relationships and Rule 31-504 Applications for Registration
The substance and purpose of the proposed amendment to Rule 31-501 Registrant Relationships and Rule 31-504 Applications for Registration are to make theprovisions of those rules that conflict with the proposed National Instrument 31-101 Mutual Reliance Review System for Registration subject to the provisionsof National Instrument 31-101 Mutual Reliance Review System for Registration.
Summary of Proposed National Instrument and Companion Policy
The proposed National Instrument establishes a mutual reliance review system for registration. The system is available to certain dealers and advisers that areregistered or are seeking registration in more than one jurisdiction. If a firm filer elects to use the system, all of its individual filers who are registered or seekregistration in more than one jurisdiction must also use the system. If a firm filer elects not to use the system, its individual filers may not use the system.
The mutual reliance review system for registration under the proposed National Instrument is available to all firm advisers provided that the firm adviser does nothold property on behalf of a client and provided the firm adviser is not seeking to register and is not required to register under securities legislation to advise oncommodity futures or exchange contracts.
The proposed National Instrument describes circumstances in which a firm adviser having access to client securities or money will not be considered to beholding securities or money on behalf of a client. In particular, a firm adviser will not be considered to be holding securities or money of its clients if the clientproperty held is cleared by the end of each day on which the adviser is open for business, solely because the firm adviser is giving directions to a custodian tosettle or to a dealer to execute a transaction on behalf of a client or, if the firm adviser qualifies as a custodian or subcustodian under section 6.02 of theproposed National Instrument 81-102 Mutual Funds, solely because the firm adviser holds the property in trust in that capacity.
The mutual reliance review system for registration is available on a limited basis to non-Canadian advisers. All CSA jurisdictions, except Quebec, are willing toconsider registering a non-Canadian adviser under the mutual reliance review system for registration if Ontario or British Columbia is the principal jurisdiction forthe adviser. Quebec is not prepared to register any non-residents. In British Columbia, international advisers and non-Canadian advisers are subject to localrequirements which typically include restrictions as to the clients whom they may advise.
The mutual reliance review system for registration under the proposed National Instrument is available to all eligible dealers and their dealer representatives.Eligible dealers are defined as members of SROs in all jurisdictions in which registration is sought. SROs are exchanges in Canada, the Investment DealersAssociation of Canada and a District Council of the Investment Dealers Association of Canada. The list of local SROs in each jurisdiction is a schedule to theNational Instrument.
The mutual reliance review system for registration established by the proposed National Instrument provides that the regulator in the jurisdiction in which aCanadian resident firm has its head office will be the principal regulator. For a Canadian resident individual filer, the regulator in the jurisdiction in which theindividual is resident will act as the principal regulator. For non-resident filers and filer's that do not have their head office in Canada, the filer will request aregulator to act as its principal regulator. The principal regulator for a firm's individual filers is not necessarily the principal regulator of the firm filer.
Under the system, the filer is required to send to its principal regulator all information necessary to complete its application for registration or reinstatement orrenewal of registration including its application form and the application forms for its individual filers. In addition, a firm adviser must provide application formsrequesting approval for a firm adviser's non-advising directors, partners, and officers and an eligible dealer must provide application forms requesting approvalfor an eligible dealer's non-trading directors, partners and officers. The filer is also required to send to its principal regulator a notice that it is participating in themutual reliance review system for registration, listing all non-principal regulators with which it and its individual filers are seeking registration or reinstatement orrenewal of registration.
The firm filer and all of its individual filers that seek registration in the principal jurisdiction are registered with the principal regulator and the firm filer'snon-advising or non-trading directors, partners and officers are approved by the principal regulator. An individual filer need not register with the principalregulator for his or her sponsoring firm but must register in all jurisdictions in which he or she will conduct registrable activities. The firm filer must includeinformation in its application materials relating to any registration requirements of the Canadian securities legislation in the jurisdiction in which its principalregulator is located for which it seeks an exemption. It is also required to send all application Materials to all of the non-principal regulators identified in itsnotice to the principal regulator. Applications to non-principal regulators must be sent contemporaneously with sending a completed application to the principalregulator. Fees are required to be paid in the usual manner. Consents to the sharing of information among regulators as well as to collection of personalinformation under freedom of information legislation must be sent to the regulator in each jurisdiction, if applicable.
Under the proposed National Instrument, the principal regulator is charged with reviewing the application Materials and advising the non-principal regulators ofits intention to register, reinstate or renew the applicant by providing to the non-principal regulators a draft of its MRRS Decision Document including theconditions, if any, that it is proposing to impose on the filer. Under the system, the non-principal regulators may respond on an opting out or an opting in basis. Ifa non-principal regulator elects to participate in the system on an opting out basis and to opt out of the mutual reliance review system for registration for aparticular application, it will within a period of seven (7) days after a draft MRRS Decision Document for a firm filer, or within a period of five (5) days after adraft of an MRRS Decision Document for an individual filer is sent by the principal regulator, send a written notice that the non-principal regulator has optedout. The notice must be sent to the filer and all other regulators to which the filer made application and provide reasons for the regulator opting out. Anon-principal regulator participating in the system on an opting out basis that does not so notify the principal regulator will be deemed to agree to be named inthe MRRS Decision Document. If a non-principal regulator chooses to participate in the mutual reliance review system for registration on an opting in basis anddecides to opt in for a particular application, it will within a period of seven (7) days after a draft MRRS Decision Document for a firm filer, or within a period offive (5) days after a draft MRRS Decision Document for an individual filer, is sent by the principal regulator, send a written notice that it has opted in. The noticemust be sent to the filer and all other regulators to which the filer made application. If a regulator elects not to opt in, the regulator must provide its reasons forrefusal to opt in to the other regulators to which the filer has applied for registration. A regulator participating in the system on an opting in basis will only benamed in the MRRS Decision Document if it opts in.
The mutual reliance review system for registration also applies in situations in which a filer is already registered in one or more jurisdictions. In this situation, thefirm filer seeking registration, reinstatement or renewal of registration for itself as a firm filer or on behalf of an individual filer will send to the new non-principalregulators all relevant documents that were sent to the principal regulator on an initial registration. In addition, it will send a copy of any MRRS DecisionDocument, if available, and the applicable current registration certificate issued by the principal regulator for itself and for each of its individual filers seekingregistration with that non-principal regulator. If any application form that was sent to the principal regulator is more than 36 months old, a new application formin the form prescribed by Canadian securities legislation in the jurisdiction in which the principal regulator is located must be completed and sent to thenon-principal regulator with whom registration is sought. Fees are required to be paid in the usual manner.
The proposed National Instrument assumes that all jurisdictions will modify their renewal processes and adopt a permanent registration system. Adopting apermanent registration system in most jurisdictions will require separate local implementing instruments or amendments to regulations to change existing renewalrequirements. In the Northwest Territories a legislative amendment is required and the timing of the amendment is not certain. Until the local implementinginstruments, regulation or legislative changes are implemented in each jurisdiction, the renewal date for filers that use the mutual reliance review system forregistration will be uniform in all jurisdictions, except the Northwest Territories if the Northwest Territories is not the principal jurisdiction. The renewal date willbe the date that is 90 days after the firm filer's fiscal year end, unless the Northwest Territories is the principal jurisdiction, in which case the renewal date will beMarch 31. In Quebec, Canadian securities legislation does not provide for annual renewals of registration. However, there is an annual filing requirement thatmust be completed within 90 days after a firm filer's year end.
The proposed National Instrument does not deal with amendments and a filer must follow the amendment procedures and requirements of Canadian securitieslegislation in each local jurisdiction in which it is registered.
The proposed Companion Policy provides an overview of the mutual reliance review system for registration including how the regulators will deal with oneanother for registrations, reinstatements and renewals of registration under the system.
The Companion Policy provides information on the choice of a principal regulator for a filer that is resident in a foreign jurisdiction or that has its head office in aforeign jurisdiction. It also provides guidance on how a Canadian resident filer may apply for an exemption from the principal regulator requirements in theNational Instrument.
The Companion Policy provides that the CSA members involved in the system will accept Materials in either of the official languages of Canada. It also sets outa number of provisions relating to the MRRS Decision Document including its form, content, and when it will be issued. The Companion Policy advises filers onhow conditions of registration will be dealt with on the initial registration and on an ongoing basis. It also provides for certain specified minimum proficiency foradvisers who intend to register under the system. The Companion Policy advises registrants that there are other requirements either in Canadian securitieslegislation or Canadian securities directions of which they should be aware and that would apply to their registration. Finally, the proposed Companion Policyprovides a concordance of equivalent registration categories in each jurisdiction.
The proposed MOU explains the scope of the mutual reliance review system generally. It also advises as to the review process to be used by the principalregulator under the system.
Summary of Proposed Amendment to Rule 31-501 Registrant Relationships and Rule 31-504 Applications for Registration
The proposed amendment to Rule 31-501 Registrant Relationships and Rule 31-504 Applications for Registration make the provisions of those rules that conflictwith proposed National Instrument 31-101 Mutual Reliance Review System for Registration subject to the provisions contained in National Instrument 31-101Mutual Reliance Review System for Registration.
Authority for Proposed National Instrument, Proposed Amendment to Rule 31-501 Registrant Relationships and Proposed Amendment to Rule31-504 Applications for Registration
In those jurisdictions in which the National Instrument is to be adopted as a rule or a regulation, the securities legislation in each of those jurisdictions providesthe securities regulatory authority with rule-making or regulation-making authority in respect of the subject matter of the proposed National Instrument.
In Ontario, the Securities Act (Ontario) (the "Ontario Act") provides the Ontario Securities Commission (the "Ontario Commission") with rule-making authorityin respect of the subject matter of the proposed amendment to Rule 31-501 Registrant Relationships and Rule 31-504 Applications for Registration.
In Ontario, the following sections of the Ontario Act provide the Ontario Commission with authority to make the proposed National Instrument and to amendRule 31-501 Registrant Relationships and Rule 31-504 Applications for Registration. Paragraph 143(1)1 of the Ontario Act authorizes the Ontario Commissionto make rules prescribing requirements in respect of applications for registration and the renewal, amendment, expiration or surrender of registration. Paragraph143(1)2 of the Ontario Act authorizes the Ontario Commission to make rules prescribing conditions of registration or other requirements for registrants or anycategory or subcategory of registrant.
Unpublished Materials
In proposing the National Instrument, the CSA have not relied on any significant unpublished study, report or other written materials.
In proposing the amendment to Rule 31-501 Registrant Relationships and Rule 31-504 Applications for Registration, the Ontario Commission has not relied onany significant unpublished study, report or other written materials.
Alternatives Considered
In developing the National Instrument, the CSA considered repeating Draft NP54, but decided to adopt a new initiative in developing a mutual reliance reviewsystem for registration of registrants that are either dealers that are members of SROs or advisers.
The Ontario Commission did not consider any alternatives to the proposed amendment to Rule 31-501 Registrant Relationships and Rule 31-504 Applicationsfor Registration.
Anticipated Costs and Benefits
The proposed National Instrument and amendment to Rule 31-501 Registrant Relationships and Rule 31-504 Applications for Registration will reduce the timeand costs associated with making separate application to and dealing separately with several regulators in Canada in connection with an application forregistration, reinstatement of registration or renewal of registration of a registrant that is eligible to use the system.
The proposed National Instrument and amendment to Rule 31-501 Registrant Relationships and Rule 31-504 Applications for Registration will also reduce thecosts of compliance for registrants who use the system, as they will have only one set of initial conditions of obtaining registration, which will apply on anongoing basis, with which to comply, being those of the principal regulator. The other ongoing conditions of maintaining registration will be the localrequirements in each jurisdiction of which the registrant is registered.
Related Instruments
The proposed National Instrument and MOU are related. The proposed National Instrument, Rule 31-501 Registrant Relationships and Rule 31-504Applications for Registration are related.
Regulations To Be Amended
In Ontario, the Ontario Commission will amend the following provisions of the Ontario Regulation to refer to the proposed National Instrument in order tocreate an exemption to the requirements contained in those provisions:
1. subsection 107(1);
2. subsection 107(2);
3. subsection 107(3);
4. subsection 108(1);
5. subsection 108(2);
6. subsection 108(3);
7. subsection 108(4);
8. subsection 108(5);
9. section 111;
10. subsection 127(1);
11. section 129;
12. subsection 130(1);
13. subsection 130(2);
14. subsection 130(3);
15. subsection 131(1);
16. subsection 132(1);
17. subsection 132(2);
18. subsection 133(1);
19. subsection 133(2);
20. section 139;
21. section 140;
22. section 141;
23. section 142;
24. section 144;
25. subsection 145(1);
26. section 146; and
27. subsection 147(1).
Rules to be Amended
The Ontario Commission is proposing to amend Rule 31-501 Registrant Relationships and Rule 31-504 Applications for Registration to make them subject tothe provisions of the proposed National Instrument.
Comments
Interested parties are invited to make written submissions with respect to the proposed National Instrument and amendment to Rule 31-501 RegistrantRelationships and Rule 31-504 Applications for Registration. Submissions received by September 18, 1998 will be considered.
Submissions in respect of the proposed National Instrument and Companion Policy should be sent to all of the Canadian securities regulatory authorities listedbelow in care of the Ontario Commission in duplicate, as indicated below.
Submissions should also be addressed to the Commission des Valeurs Mobilières du Québec as follows:
Submissions in respect of the proposed amendment to Rule 31-501 Registrant Relationships and Rule 31-504 Applications for Registration should be sent to:
Randee B. Pavalow
Policy Coordinator? Advisor and
Manager of Advisory Services
Ontario Securities Commission
(416) 593-8257
Susan Greenglass
Legal Counsel
Ontario Securities Commission
(416) 593-8140
A diskette containing the submissions (in DOS or Windows format, preferably WordPerfect) should also be submitted. As securities legislation in certainprovinces requires that a summary of written comments received during the comment period be published, confidentiality of submissions cannot be maintained.
Questions may be referred to any of the following:
Text of Proposed National Instrument and Companion Policy, Proposed Amendment to Rule 31-501 Registrant Relationships and ProposedAmendment to Rule 31-504 Applications for Registration
The text of the proposed National Instrument, Companion Policy and amendment to Rule 31-501 Registrant Relationships and Rule 31-504 Applications forRegistration follow, together, in respect of the National Instrument, with footnotes that are not part of the National Instrument but have been included to providebackground and explanation.
Text of Proposed Amendment to Rule 31-501 Registrant Relationships
Rule 31-501 Registrant Relationships is amended by adding the following clause to the beginning of each of subsections 1.1(1), 2.1(1) and 2.2(1):
"Except as provided in National Instrument 31-101 Mutual Reliance Review System for Registration,".
Text of Proposed Amendment to Rule 31-504 Applications for Registration
Rule 31-504 Applications for Registration is amended by adding the following clause to the beginning of section 1.1:
"Except as provided in National Instrument 31-101 Mutual Reliance Review System for Registration,".
DATED: June 19, 1998.
MUTUAL RELIANCE REVIEW SYSTEM FOR REGISTRATION
PART TITLE
PART 1 DEFINITIONS AND INTERPRETATION
1.1 Definitions
1.2 Copies
PART 2 APPLICATION
2.1 Eligibility
2.2 Exclusion
2.3 Interpretation
2.4 Exception Non-Canadian Advisers
2.5 Residency Quebec
2.6 Notice of Withdrawal
2.7 Individual Filers
PART 3 PRINCIPAL REGULATOR
3.1 Principal Regulator
PART 4 INITIAL REGISTRATION
4.1 Registration of a Filer not Registered in any Jurisdiction
4.2 Registration with a Non-Principal Regulator of a Filer Registered with the Principal Regulator
PART 5 ANNUAL DELIVERIES
5.1 Annual Delivery Requirements
PART 6 REINSTATEMENT OF REGISTRATION
6.1 Reinstatement of Registration
PART 7 MRRS DECISION DOCUMENT
7.1 MRRS Decision Document
PART 8 TRANSITION
8.1 Transition
8.2 Northwest Territories
8.3 Election to Participate
PART 9 EXEMPTION
9.1 Exemption
9.2 Evidence of Approval of Regulator
APPENDIX A
LIST OF SROs
NATIONAL INSTRUMENT 31-101
MUTUAL RELIANCE REVIEW SYSTEM FOR REGISTRATION(1)
PART 1 DEFINITIONS AND INTERPRETATION(2)
1.1 Definitions - In this Instrument
"annual delivery date" means the date prescribed by Canadian securities legislation(3) in the principal jurisdiction by which a filer must send annual deliverydocuments to the regulator(4) or on which registration of a filer is suspended or expires if the filer does not comply with the annual delivery requirementsapplicable to the filer;
"annual delivery documents" means the documents and information, other than financial statements, required under securities legislation(5) to be sent to theregulator by a filer on an annual basis or required under securities legislation to be sent to the regulator by a filer on an application to renew the filer'sregistration;
"approved person" means an individual who is a director, partner or officer
(a) of a firm adviser, and who does not act as an adviser on the firm adviser's behalf, or
(b) of an eligible dealer, and who does not engage in trading securities on the eligible dealer's behalf;
"dealer representative" means an individual who is a salesperson, partner, director or officer of a registered eligible dealer and trades in securities on behalf of thedealer;
"eligible dealer" means a person or company, other than a dealer representative, that is a member of an SRO(6) set out in Appendix A opposite the name of theregulator;
"filer" means any of the following who is applying for registration or reinstatement of registration, or is registered under, the mutual reliance review system forregistration:
1. An eligible dealer.
2. A dealer representative.
3. A firm adviser.
4. An individual adviser;
"firm adviser" means a person or company, other than an individual adviser and a person or company that is required to be registered under securities legislationfor the purpose of advising on commodity futures or exchange contracts(7), that is required to be registered as an adviser;
"firm filer" means a filer that is an eligible dealer or a firm adviser;
"individual adviser" means an individual who is a director, partner, officer or employee of a firm adviser and who acts as an adviser on the firm adviser's behalf;
"individual filer" means a filer that is an individual adviser or a dealer representative;
"initial registration requirements" means the requirements for registrants contained in securities legislation relating to the following subject matters:
1. Application forms for registration, reinstatement of registration or approval, and contents of those application forms.
2. Regulatory capital.
3. Insurance.
4. Bonding.
5. Membership in or payments to contingency or investor protection funds.
6. Proficiency.
7. Financial reporting.
8. Residency of individual filers.
9. Residency of firm filers;
"MRRS Decision Document" means a mutual reliance review system decision document issued under this Instrument evidencing registration of a filer;
"mutual reliance review system for registration" or "the system" means the system described in this Instrument for the review of registration, reinstatement orrenewal of registration applications and annual delivery documents of filers;
"non-Canadian adviser" means a firm adviser that does not have an office in Canada;
"non-principal regulator" means a regulator with whom a filer has applied for registration or is registered, other than the principal regulator;
"principal jurisdiction" means the jurisdiction in which the principal regulator is located; and
"principal regulator" means a regulator determined in accordance with section 3.1 or, if the filer is registered in only one jurisdiction, the regulator in thatjurisdiction.
1.2 Copies - A requirement of this Instrument that a person or company send a copy of a document shall be satisfied if the copy sent is
(a) manually signed; or
(b) certified to be a true copy of the original document by a director, partner or officer of the person or company or by the person's or company's legal counsel.
PART 2 APPLICATION(8)
2.1 Eligibility - Except as set out in this Part, a filer may use the mutual reliance review system for registration.
2.2 Exclusion - The mutual reliance review system for registration is not available to a firm adviser that holds securities or money on behalf of a client.
2.3 Interpretation - For the purposes of section 2.2 a firm adviser does not hold securities or money on behalf of a client if the adviser
(a) clears all securities and money of its clients out of its office by the end of each day that the adviser is open for business;
(b) holds securities or money solely as a result of the adviser giving directions to a custodian to settle or to a dealer to execute transactions on behalf of its clientsfor whom securities or money is held; or
(c) qualifies as a custodian or sub-custodian under Part 6 of National Instrument 81-102 Mutual Funds(9), solely as a result of the adviser holding the securities ormoney on behalf of its clients in trust in that capacity.
2.4 Exception Non-Canadian Advisers - A non-Canadian adviser may not register under the mutual reliance review system for registration unless Ontario orBritish Columbia is the principal jurisdiction for the firm adviser.
2.5 Residency Quebec - In Quebec, a filer that is not resident in Quebec is not permitted to be registered under the mutual reliance review system forregistration.
2.6 Notice of Withdrawal - If a filer elects to withdraw from the system, it shall give written notice of withdrawal to the regulator, if the regulator is theprincipal regulator or a non-principal regulator.
2.7 Individual Filers
(1) If an eligible dealer or firm adviser does not participate in the system, none of its individual advisers or dealer representatives may apply for registration orreinstatement or renewal of registration under the system.
(2) A firm filer's individual advisers and dealer representatives that are applying for registration or reinstatement or renewal of registration in more than onejurisdiction shall apply for registration or reinstatement or renewal of registration using the system.
(3) In each of Alberta, Ontario, Nova Scotia and Newfoundland, an individual adviser is not permitted to be registered under the mutual reliance review systemfor registration unless the individual adviser is a partner or officer of a firm adviser.
PART 3 PRINCIPAL REGULATOR
3.1 Principal Regulator
(1) The principal regulator for a firm filer, other than a non-Canadian adviser and a firm filer that does not have an office in Canada, is the regulator in thejurisdiction in which the firm filer's head office is located.
(2) The principal regulator for an individual filer that is resident in Canada is the regulator in the jurisdiction in which the individual is resident.
(3) Each of the following filers shall send a written notice to the regulator, identifying the regulator that the filer requests to act as the filer's principal regulator,before sending an application for registration under the system:
(a) a firm filer that does not have an office in Canada;
(b) a firm filer that has its head office in a foreign jurisdiction(10); and
(c) an individual filer that is resident in a foreign jurisdiction.
(4) If the regulator requested by the filer in the notice referred to in subsection (3) refuses to act as the filer's principal regulator, the filer shall, by written noticeto the regulator, request another regulator to act as the filer's principal regulator before sending an application for registration under the system.
(5) A filer sending a notice under subsection (3) or (4) shall set out in the notice the following information:
(a) the number or percentage of clients resident or the number or percentage of clients expected to be resident in each jurisdiction; and
(b) the volume or percentage of business generated or volume or percentage of business expected to be generated in each jurisdiction.(11)
(6) A filer that sends a notice under subsection (3) or (4) shall not send an application for registration under the system unless it has received a writtenconfirmation from the regulator requested by the filer to act as the filer's principal regulator in the notice referred to in subsection (3) or (4) that the regulator willact as the principal regulator for the filer.
PART 4 INITIAL REGISTRATION
4.1 Registration of a Filer not Registered in any Jurisdiction
(1) If a firm filer is not registered in any jurisdiction and seeks registration in more than one jurisdiction, the filer shall do the following:
1. For the application, follow the registration procedures and comply with the initial registration requirements in the principal jurisdiction.
2. If the regulator is the principal regulator, send to the regulator the following:(12)
(a) completed application forms for registration of the firm filer and each of the firm filer's individual filers resident in the principal jurisdiction;
(b) completed application forms requesting approval by the regulator of the firm filer's approved persons(13);
(c) a written notice
(i) stating that the firm filer is participating in the mutual reliance review system for registration,
(ii) listing the non-principal regulators and the category of registration sought with each non-principal regulator,
(iii) listing the firm filer's approved persons, and
(iv) describing any initial registration requirements under Canadian securities legislation in the principal jurisdiction for which the firm filer seeks or any of thefirm filer's individual filers seek a waiver or exemption;
(d) the fees prescribed by securities legislation;
(e) a consent executed by the appropriate person or company to the exchange of information about the person or company between the principal regulator andthe non-principal regulators for the firm filer and each of the firm filer's individual filers and approved persons; and
(f) if consent is required by freedom of information legislation in the principal jurisdiction, a consent executed by the appropriate person or company to theregulator collecting personal information about the firm filer and each of the firm filer's individual filers and approved persons.
3. If the regulator is a non-principal regulator, on the same day that the applicant sends the material referred to in paragraph 2. to the principal regulator, send tothe regulator
(a) a copy of the notice required under subparagraph 2.(c);
(b) the fees prescribed by securities legislation;(14)
(c) copies of the application forms and other documents sent to the principal regulator for the firm filer, each of the firm filer's individual filers who seekregistration with the regulator and the firm filer's approved persons;
(d) a consent to the exchange of information about the person or company between the regulator, the principal regulator and the other non-principal regulatorsfor the firm filer, each of the firm filer's individual filers who seek registration with the regulator and the firm filer's approved persons, executed by theappropriate person or company; and
(e) if consent is required by freedom of information legislation in the jurisdiction in which the regulator is located, a consent to the regulator collecting personalinformation about the firm filer, each of the firm filer's individual filers who seek registration with the regulator and the firm filer's approved persons, executed bythe appropriate person or company.
4. If the regulator is a non-principal regulator, on the same day that the firm filer sends to the principal regulator a response to any deficiency letter, send to theregulator a copy of the deficiency letter and the response.
(2) An individual filer that seeks registration under the system shall comply with paragraph (1) 1., subparagraphs (1)2.(a), (d), (e), (f) and (1)3.(b), (c), (d) and(e) and sub-subparagraphs (1)2.(c)(ii) and (iv) to the extent that they relate to the application for registration of the individual filer.
4.2 Registration with a Non-Principal Regulator of a Filer Registered with the Principal Regulator
(1) If the regulator is a non-principal regulator and if a filer is registered with the principal regulator and seeks registration under the system with the regulatorfor itself as a firm filer or on behalf of an individual filer, the filer shall send to the regulator the following:
1. A copy of any MRRS Decision Document and the current certificate of registration issued by the principal regulator for the filer and each of the firm filer'sindividual filers on whose behalf it seeks registration.
2. A written notice listing the firm filer's approved persons.
3. A copy of each application form and all other documents sent to the principal regulator relating to the application for registration or any amendments toregistration for the filer and each of the firm filer's individual filers who seek registration in the jurisdiction, unless an application form is dated more thanthirty-six months before the date sent to the regulator, in which case the applicant shall complete and send a new application form in the form required byCanadian securities legislation of the principal jurisdiction dated not less than sixty days before the date sent to the regulator.
4. Unless a new application form is sent under paragraph 3., a copy of the most recent annual delivery documents sent to the principal regulator within thethirty-six month period ending immediately before the date of the application is sent to the non-principal regulator by or on behalf of each of the firm filer, thefirm filer's individual filers for whom it seeks registration in the jurisdiction and the firm filer's approved persons.
5. A written notice describing any registration requirements of Canadian securities legislation in the principal jurisdiction for which the firm filer or any of thefirm filer's individual filers were granted a waiver or exemption by the principal regulator.
6. The fees prescribed by securities legislation.
7. A consent to the exchange of information about the person or company between the regulator, the principal regulator and the other non-principal regulatorsfor the firm filer and each of the firm filer's individual filers and approved persons, executed by the appropriate person or company.
8. If consent is required by freedom of information legislation in the jurisdiction in which the regulator is located, a consent to the regulator collecting personalinformation about the firm filer and each of the firm filer's individual filers who seek registration with the regulator and the firm filer's approved persons, executedby the appropriate person or company.
(2) An individual filer that is registered with the principal regulator and that seeks registration under the system with the regulator shall comply with paragraphs1., 3., 5., 6., 7. and 8. of subsection (1) to the extent that they relate to the application for registration of the individual filer.
(3) If the regulator is the principal regulator, the filer shall send to the regulator, on the same day as the filer sends the material under subsection (1) or (2) to anyother regulator, a written notice specifying the other jurisdiction in which the application is made and on whose behalf it was made.
PART 5 ANNUAL DELIVERIES
5.1 Annual Delivery Requirements
(1) A filer shall send to the regulator by the annual delivery date the following:
(a) the financial statements for the most recently completed financial year of the filer; and
(b) the fees prescribed by securities legislation.(15),(16)
(2) If the regulator is a principal regulator or non-principal regulator, a firm filer shall send to the regulator at least forty-five days before its annual delivery date:
(a) a written notice listing
(i) the regulators to which the firm filer is applying for renewal of registration, and
(ii) the firm's individual filers who seek renewal of registration and those regulators from which each is seeking renewal of registration; and
(b) annual delivery documents required to be sent by the filer to the principal regulator under Canadian securities legislation in the principal jurisdiction.
(3) Despite subsections (1) and (2), in the Northwest Territories the filer must comply with annual renewal requirements(17) in the Securities Act, R.S.N.W.T.1988, cS-5, as amended.
PART 6 REINSTATEMENT OF REGISTRATION
6.1 Reinstatement of Registration
(1) A filer that has been issued an MRRS Decision Document but whose registration has been suspended or has expired shall follow the reinstatement ofregistration procedures under Canadian securities legislation in the filer's principal jurisdiction.
(2) A filer applying for reinstatement of registration shall, at the same time it sends an application for reinstatement of registration to its principal regulator, sendto the regulator the materials sent to the filer's principal regulator.
PART 7 MRRS DECISION DOCUMENT
7.1 MRRS Decision Document - An MRRS Decision Document is evidence that registration or reinstatement of registration is granted by each regulator listedin the MRRS Decision Document.
PART 8 TRANSITION
8.1 Transition
(1) For the year in which a filer elects to participate in the system, the registration for a firm filer and each of the firm filer's individual filers is suspended orexpires on the date that is ninety days after the date on which the firm filer's next financial year ends, if the firm filer is registered with the principal regulator andwith a non-principal regulator on the date this Instrument came into force in the local jurisdiction.
(2) A filer may not elect to participate in the mutual reliance review system for registration if the filer's registration has expired or is suspended.(18)
8.2 Northwest Territories - In the Northwest Territories, Section 8.1 does not apply if the Northwest Territories is not the principal jurisdiction(19).
8.3 Election to Participate
(1) A firm filer that is registered with its principal regulator or the regulator that the firm filer is requesting to act as its principal regulator and with anon-principal regulator may elect to participate in the mutual reliance review system for registration by giving a written notice to that effect to the principalregulator or the requested principal regulator and each non-principal regulator with which the firm filer is registered.
(2) The notice referred to in subsection (1) shall
(a) be accompanied by the firm filer's current registration certificates; and
(b) set out the date on which the firm filer's registration with the principal regulator or requested principal regulator expires or will be suspended if the firm filerfails to send the annual delivery documents required under Canadian securities legislation in the principal jurisdiction.
PART 9 EXEMPTION
9.1 Exemption - The regulator may grant an exemption to this Instrument, in whole or in part, subject to such conditions or restrictions as may be imposed inthe exemption.
9.2 Evidence of Approval of Regulator - Without limiting the manner in which an exemption under section 9.1 may be evidenced, the issuance by the regulatorof an MRRS Decision Document or the listing of the regulator's jurisdiction in an MRRS Decision Document is evidence of the granting of an exemption underthis Instrument or from a condition of obtaining registration if:
(a) the filer that sought the exemption sent to the principal regulator on or before the date the application for registration or reinstatement of registration for thefiler was sent to the principal regulator, a letter or memorandum describing the matters relating to the exemption application, and indicating why considerationshould be given to the granting of the exemption; and
(b) the principal regulator or the regulator has not sent written notice to the filer to the contrary before or concurrently with the issuance of the MRRS DecisionDocument by the principal regulator.
NATIONAL INSTRUMENT 31-101
MUTUAL RELIANCE REVIEW SYSTEM FOR REGISTRATION
APPENDIX A
LIST OF SROs
British Columbia - Pacific District of the Investment Dealers Association of Canada
Vancouver Stock Exchange
Alberta - Alberta District of the Investment Dealers Association of Canada
Alberta Stock Exchange
Saskatchewan - Saskatchewan District of the Investment Dealers Association of Canada
Vancouver Stock Exchange
Alberta Stock Exchange
The Toronto Stock Exchange
The Montreal Exchange
Manitoba - Manitoba District of the Investment Dealers Association of Canada
Winnipeg Stock Exchange
Ontario - Ontario District of the Investment Dealers Association of Canada
Quebec - Any District of the Investment Dealers Association of Canada
The Montreal Exchange
Vancouver Stock Exchange
Alberta Stock Exchange
The Toronto Stock Exchange
New Brunswick - N/A
P.E.I. - N/A
Nova Scotia - Nova Scotia District of the Investment Dealers Association of Canada
Newfoundland - Any District of the Investment Dealers Association of Canada
Vancouver Stock Exchange
Alberta Stock Exchange
The Toronto Stock Exchange
The Montreal Exchange
Yukon - N/A
Northwest Territories - N/A
COMPANION POLICY 31-101CP
MUTUAL RELIANCE REVIEW SYSTEM FOR REGISTRATION
TABLE OF CONTENTS
PART TITLE
PART 1 INTERPRETATION
1.1 Overview and Application
1.2 Definition
1.3 Interpretation
PART 2 CHOICE OF PRINCIPAL REGULATION
2.1 Exemption from Principal Regulator Requirement
2.2 Principal Regulators
2.3 Non-Resident Filers' Choice of Principal Regulator
PART 3 LANGUAGE OF APPLICATIONS
3.1 Language of Applications
PART 4 MRRS DECISION DOCUMENT
4.1 Form
4.2 Local Decision Document
4.3 MRRS Decision Document
4.4 Registration Categories
4.5 Conditions of Registration
4.6 Date of Issuance
4.7 Coordination of Registration
4.8 Opting Out After Registration
PART 5 PROFICIENCY
5.1 Proficiency
PART 6 OPTING IN OR OPTING OUT
6.1 Opting In or Opting Out
6.2 Opting Out
6.3 Opting In
PART 7 OTHER REQUIREMENTS
7.1 Other Regulatory Requirements
7.2 Local Requirements
7.3 British Columbia Non-Canadian Advisers
7.4 British Columbia Registration as Underwriter
PART 8 PRINCIPAL REGULATOR REFUSAL
8.1 Refusal by Principal Regulator to Register, Reinstate or Renew
8.2 Opportunity to be Heard on a Refusal
APPENDIX A
MUTUAL RELIANCE REVIEW DECISION DOCUMENT
APPENDIX BEQUIVALENT CATEGORIES OF REGISTRATION FOR FILERS
COMPANION POLICY 31-101CP
MUTUAL RELIANCE REVIEW SYSTEM FOR REGISTRATION
PART 1 INTERPRETATION
1.1 Overview and Application
(1) This Policy describes the practical application of mutual reliance concepts set out in the Mutual Reliance Review System Memorandum of Understandingamong the Canadian Securities Administrators dated , relating to the filing and review of Materials.
(2) Under the mutual reliance review system for registration a designated regulator acts as the principal regulator for all Materials relating to a filer.
(3) A filer will generally deal only with its principal regulator for the Materials it is required to send under the mutual reliance review system for registration.
(4) The principal regulator is responsible for reviewing the Materials in accordance with Canadian securities legislation and Canadian securities directions in itsjurisdiction and will apply its review procedures, analysis and precedents. The non-principal regulators may conduct a review intended to identify any materialconcerns about the Materials. If a non-principal regulator has identified material issues with Materials sent to it under the mutual reliance review system forregistration that, if left unresolved, would cause the non-principal regulator to opt out or not exercise its right to opt in for the particular filer of the Materials, itwill advise the principal regulator of the issues.
(5) If an SRO is acting as an agent of a regulator, it may make decisions on registration including opting in and opting out of the mutual reliance review systemfor registration on behalf of that regulator. The SRO may also communicate these decisions directly to the filers and other regulators.
1.2 Definition - In this Policy "Materials" means applications for registration, reinstatement of registration and renewal of registration and annual deliverydocuments.
1.3 Interpretation - National Instrument 31-101 (the "Instrument") uses the terminology "send" throughout. The use of the word "send" is intentional by theregulators as it is generic. Canadian securities legislation in certain jurisdictions distinguishes between information that is filed with, and information that isdelivered to, the Canadian securities regulatory authorities or regulators. Generally, a document that is filed is available on the public record and a document thatis delivered is not available on the public record. Since the use of file and deliver in Canadian securities legislation is not yet harmonized, the Instrument uses thegeneric term "send" and Canadian securities legislation in the local jurisdiction will determine whether the Materials are to be filed or delivered.
PART 2 CHOICE OF PRINCIPAL REGULATOR
2.1 Exemption from Principal Regulator Requirement - Part 3 of the Instrument sets out how the principal regulator for filers will be determined. Filers whowish to request that a particular regulator act as its principal regulator may apply for an exemption from these requirements. Application should be made to theregulator that would be the principal regulator under the Instrument and the regulator that the filer wishes to act as its principal regulator. The application shouldset out information relating to the principal place of business and head office of the filer, if a firm filer, and, for both a firm filer and an individual filer,information relating to the number or percentage of clients resident or the number or percentage of clients expected to be resident in each jurisdiction, the volumeor percentage of business generated or volume or percentage of business expected to be generated in each jurisdiction and other information the filer considersrelevant. The regulator will consider these and other relevant factors in reviewing the application for exemption.
2.2 Principal Regulators - Each of the regulators has agreed to act as a principal regulator for filers under the mutual reliance review system for registration.
2.3 Non-Resident Filers' Choice of Principal Regulator - The Instrument provides that a filer that is resident in a foreign jurisdiction or that has its head officein a foreign jurisdiction must provide a notice requesting a regulator to act as its principal regulator. It also requires that the filer provide in its notice requesting aregulator to act as the principal regulator information relating to the number or percentage of clients resident or the number or percentage of clients expected tobe resident in each jurisdiction and the volume or percentage of business generated or volume or percentage of business expected to be generated in eachjurisdiction. The regulators have determined that they will consider these and other relevant factors in determining whether to act as principal regulator for a filerand to grant relief from the requirements of the Instrument.
PART 3 LANGUAGE OF APPLICATIONS
3.1 Language of Applications - Each of the regulators will accept registration materials that are sent to it in either of the official languages of Canada.
PART 4 MRRS DECISION DOCUMENT
4.1 Form - An MRRS Decision Document will contain the information set out in the form attached as Appendix A to this policy.
4.2 Local Decision Document - Despite the issuance of an MRRS Decision Document, certain non-principal regulators will issue concurrently their owndecision documents for a registration or reinstatement or renewal of registration of a filer. It is not necessary for a filer to obtain a copy of the local decisiondocument prior to commencing trading or advising business.
4.3 MRRS Decision Document - An MRRS Decision Document will be issued by the principal regulator once it is satisfied that a filer has met the initialregistration requirements. The principal regulator will first send a draft MRRS Decision Document to all non-principal regulators. The draft MRRS DecisionDocument will contain proposed conditions on the registration of a filer if the principal regulator is of the view that conditions are required.
4.4 Registration Categories - An MRRS Decision Document will specify the category of registration for the registrant. The equivalent categories of registrationin each jurisdiction are set out in Appendix B to this Policy.
4.5 Conditions of Registration - Canadian securities legislation in certain jurisdictions provides a filer with an opportunity to be heard prior to conditions beingimposed on the filer's registration. If the filer agrees to a condition being imposed, a regulator generally requires that a written consent to the condition and awaiver of an opportunity to be heard be provided to the regulator by the filer prior to granting registration with the condition attached. To expedite the issuanceof an MRRS Decision Document, filers that have agreed to conditions of registration proposed by the principal regulator should provide the principal regulatorwith a letter confirming consent to the condition and a waiver of an opportunity to be heard addressed to all non-principal regulators and the principal regulator.
4.6 Date of Issuance - A principal regulator will not issue an MRRS Decision Document before the seventh day after a draft MRRS Decision Document for afirm filer, or before the fifth day after a draft MRRS Decision Document for an individual filer, is sent to the non-principal regulators.
4.7 Coordination of Registration - Each of the regulators has agreed that if an individual filer has a different principal regulator than his or her sponsoring firm,each of the firm's principal regulator and the individual's principal regulator will coordinate its registration processing to ensure that the individual's registration isnot granted before the granting of the sponsoring firm's registration.
4.8 Opting Out After Registration - If, after an MRRS Decision Document has been issued by a principal regulator, a regulator with which a filer is registereddetermines to remove or add a condition of registration on the filer's registration, the regulator will notify in writing all other regulators with which the filer isregistered. The notice will include the form of the condition to be removed or added and the reasons of the regulator for the proposed removal or addition of thecondition. Each non-principal regulator so advised will advise the principal regulator in writing within five days after receipt of the notice if it intends to affect thefiler's registration in the manner proposed by the regulator. If there is not unanimity by all regulators with which the filer is registered, the regulators proposing toeffect the change to registration will opt out of the system in relation to the filer and the principal regulator will issue a new MRRS Decision Document that doesnot name those jurisdictions in which the opting out regulators are situate.
PART 5 PROFICIENCY
5.1 Proficiency - Each regulator, when acting as principal regulator, will require, as a minimum, successful completion of the following courses or anypredecessors or successor courses to the following courses for all individual advisers registered under the mutual reliance review system for registration:
(a) the Canadian Securities Course;
(b) the Canadian Investment Management Course; and
(c) the first year of the Chartered Financial Analyst Examination Program.
PART 6 OPTING IN OR OPTING OUT
6.1 Opting In or Opting Out - Each of the regulators has agreed that its participation in the mutual reliance review system for registration may be on an optingin or opting out basis. Each regulator will choose as to how its participation in the system will be based. Each regulator may opt out of the system in relation to aparticular filer at any time after registration is granted.
6.2 Opting Out - If a non-principal regulator elects to participate on an opting out basis in the mutual reliance review system for registration and elects to optout for a particular application, it will, within seven days after a draft MRRS Decision Document for a firm filer, or within five days after a draft MRRS DecisionDocument for an individual filer is sent to it, send a written notice to the principal regulator and the other non-principal regulators that it has opted out andsetting out the reasons for its decision to opt out for the application. A non-principal regulator that has chosen to participate on an opting out basis and that doesnot notify the principal regulator within the time periods provided in this section will be deemed to by its silence to agree to be named in the MRRS DecisionDocument.
6.3 Opting In - If a non-principal regulator chooses to participate in the mutual reliance review system for registration on an opting in basis and elects to opt infor a particular application, it will, within seven days after a draft MRRS Decision Document for a firm filer, or within five days after a draft MRRS DecisionDocument for an individual filer is sent to it, send a written notice to the principal regulator and the other non-principal regulators that it is opting in. If aregulator chooses to participate in the mutual reliance review system for registration on an opting in basis and it does not notify the principal regulator within thetime periods provided in this section, it will not be named in the MRRS Decision Document. If a non-principal regulator that participates on an opting in basisdoes not opt in for a particular application, it will advise the principal regulator and non-principal regulators, within the time periods prescribed in this section foropting in, of the reasons it decided not to opt in for the application.
PART 7 OTHER REQUIREMENTS
7.1 Other Regulatory Requirements - Canadian securities directions and Canadian securities legislation in certain jurisdictions include references to compliancewith laws of general application. For example, in both British Columbia and Quebec a firm filer must be extraprovincially registered before conducting business inthe jurisdiction and, in Quebec this requires a French language name to be used. Filers should familiarize themselves with such provisions and govern themselvesaccordingly.
7.2 Local Requirements - The Instrument deals only with initial registration requirements and not ongoing registration requirements. A filer is not exemptedfrom compliance with the ongoing requirements of Canadian securities legislation in each jurisdiction in which the filer is registered. Filers should familiarizethemselves with these requirements.
7.3 British Columbia Non-Canadian Advisers - In British Columbia the regulator will generally permit a non-Canadian adviser to be registered if thenon-Canadian adviser meets certain additional conditions imposed by the regulator such as restrictions on the types of clients the filer will be permitted to advise.
7.4 British Columbia Registration as Underwriter - In British Columbia an applicant for registration in a dealer category that wishes to be registered as anunderwriter must apply for registration in both categories.
PART 8 PRINCIPAL REGULATOR REFUSAL
8.1 Refusal by Principal Regulator to Register, Reinstate or Renew
(1) If the principal regulator determines that it will refuse to register, reinstate or renew a filer's registration based on application Materials received by theprincipal regulator, it will notify the filer and the non-principal regulators by sending a refusal letter, and the mutual reliance review system for registration will nolonger apply to the application Materials. In these circumstances, the filer will deal separately with the principal regulator and each non-principal regulator on theapplication Materials. Filers are cautioned that, once the mutual reliance review system for registration is no longer applicable to the application Materials, eachnon-principal regulator may conduct its own comprehensive review of the Materials.
(2) To the extent the issues that gave rise to the determination of the principal regulator to refuse to issue an MRRS Decision Document are resolved to thesatisfaction of all regulators, the filer may request that the mutual reliance review system for registration apply once again to the application Materials.
8.2 Opportunity to be Heard on a Refusal - If a filer requests an opportunity to be heard because the principal regulator has advised that it intends to refuse toissue an MRRS Decision Document, the principal regulator will promptly advise the non-principal regulators. The principal regulator may hold a hearing, eithersolely or together with other interested non-principal regulators. The non-principal regulators may make whatever arrangements they think appropriate, includingconducting a hearing.
COMPANION POLICY 31-101CP
MUTUAL RELIANCE REVIEW SYSTEM FOR REGISTRATION
APPENDIX A
MUTUAL RELIANCE REVIEW DECISION DOCUMENT
Province of British Columbia
THE BRITISH COLUMBIA SECURITIES COMMISSION
Securities Act
Under the above noted act the following is registered as [insert category] by
certificate # [insert number]
Province of Alberta
ALBERTA SECURITIES COMMISSION
Securities Act
Under the above noted act the following is registered as [insert category]
Province of Saskatchewan
SASKATCHEWAN SECURITIES COMMISSION
The Securities Act, 1988
Under the above noted act the following is registered as [insert category]
Province of Manitoba
MANITOBA SECURITIES COMMISSION
The Securities Act
Under the above noted act the following is registered as [insert category]
Province of Ontario
ONTARIO SECURITIES COMMISSION
Securities Act
Under the above noted act the following is registered as [insert category]
Province of Québec
COMMISSION DES VALEURS MOBILIÈRES DU QUÉBEC
Securities Act
Under the above noted act the following is registered as [insert category] by
decision # [insert number]
Province of New Brunswick
OFFICE OF THE ADMINISTRATOR OF SECURITIES
Security Frauds Preventions Act
Under the above noted act the following is registered as [insert category]
Province of Newfoundland
SECURITIES DIVISION,
DEPARTMENT OF GOVERNMENT SERVICES AND LAND
Securities Act
Under the above noted act the following is registered as [insert category]
Province of Nova Scotia
NOVA SCOTIA SECURITIES COMMISSION
Securities Act
Under the above noted act the following is registered as [insert category]
Province of Prince Edward Island
PRINCE EDWARD ISLAND SECURITIES COMMISSION
Securities Act
Under the above noted act the following is registered as [insert category]
Northwest Territories
REGISTRAR OF SECURITIES
Securities Act
Under the above noted act the following is registered as [insert category]
Yukon Territory
REGISTRAR OF SECURITIES
Securities Act
Under the above noted act the following is registered as [insert category]
Registrant's name:
Firm Registrant's name: [include if the registrant is an individual]
Firm's head office in Canada/principal place of business in Canada: [if none state jurisdiction in which registrant has or expects to have the greatestnumber of clients and volume of business]
Conditions of registration: [if any]
Effective date:
Annual delivery date:
[Title of Authorized Official]
COMPANION POLICY 31-101CP
MUTUAL RELIANCE REVIEW SYSTEM FOR REGISTRATION
APPENDIX B
EQUIVALENT CATEGORIES OF REGISTRATION FOR FILERS
| ACTIVITIES | BC | YK | NT | AB | SK | MB | ON | QU | NB | PE | NS | NF |
| Trades in securitiesas principal or agentand is a member ofa recognized stockexchange | B | B* | B* | B | B | B | B | UD | B* | B | B | B |
| Trades in securitiesas principal or agentand is a member ofthe local district ofthe InvestmentDealers Association | ID | B* | B* | ID | ID | ID | ID | UD | B* | B* | ID | ID |
| Advises on thebuying or selling ofspecific securities orgives continuousadvice based on theparticular objectivesof each client | IC | Br | Br | IC | IC | IC | IC | RA | Br | IC | IC | IC |
| Manages theinvestment portfolioof clients throughdiscretionaryauthority granted byclients | PM | Br | Br | PM | PM | BD | PM | UA | Br | PM | PM | PM |
| Advises throughdirect advice orwritings, on thebuying or selling ofspecific securitiesnot tailored tospecific clients | SA | Br | Br | SA | SA | SA | SA | RA | Br | SA | SA | SA |
| ID - Investment Dealer
B - Broker Br - Broker restricted to specified advisoryactivities BD - Broker Dealer UD - Unrestricted Dealer |
IC - Investment Counsel
PM - Portfolio Manager SA - Securities Adviser RA - Restricted Adviser UA - Unrestricted Adviser |
|
| * These jurisdictions do not distinguish members of SROs from non-SRO member dealers | ||
[This Schedule should also include notes setting out the precise wording of the restrictions to be placed on Br, BD and RA registrations to createcategories similar to IC, PM and SA.]
Footnotes
1. This Instrument is derived in part from draft National Policy Statement No. 54 and is in part a new initiative of the Canadian Securities Administrators (the"CSA"). This Instrument is expected to be adopted as a rule in each of British Columbia, Alberta, Manitoba, Ontario and Nova Scotia, as a Commissionregulation in Saskatchewan and as a policy in each of the other jurisdictions represented by the CSA. The CSA will enter into a memorandum of understanding(the "MOU") governing mutual reliance review processing including how the mutual reliance review system for registration will be implemented.
2. A national definition instrument has been adopted as National Instrument 14-101 Definitions. It contains definitions of certain terms used in more than onenational instrument. National Instrument 14-101 also provides that a term used in a national instrument and defined in the statute relating to securities of theapplicable jurisdiction, the definition of which is not restricted to a specific portion of the statute, will have the meaning given to it in the statute relating tosecurities of that jurisdiction. National Instrument 14-101 also provides that a provision in a national instrument that specifically refers by name to a jurisdiction,other than the local jurisdiction, shall not have any effect in the local jurisdiction, unless otherwise stated in the provision.
3. The term "Canadian securities legislation" is defined in National Instrument 14-101 Definitions as meaning the statutes and other legislative instruments setout in an appendix to that instrument and will generally include the statute, regulations and, in some cases, rules and rulings and orders relating to securities inthe local jurisdiction.
4. The term "regulator" is defined in National Instrument 14-101 Definitions as meaning, in a local jurisdiction, the person set out in an appendix to thatinstrument opposite the name of the local jurisdiction.
5. The term "securities legislation" is defined in National Instrument 14-101 Definitions as meaning the particular statute and legislative instruments of the localjurisdiction set out in an appendix to that instrument and generally include the statute, regulations and, in
some cases, rules and rulings and orders relating to securities in the local jurisdiction.
6. The term "SRO" is defined in National Instrument 14-101 Definitions as "a self-regulatory organization, a self-regulatory body or an exchange".
7. This Instrument is not intended to apply to persons or companies engaged in advising on commodity futures or exchange contracts. However, as somejurisdictions regulate advising on commodity and futures contracts under securities legislation, a carve out for advisers conducting those activities has been addedto this definition.
8. In a response to the Request for Comment on draft National Policy Statement No. 54,a commentator suggested expanding the application of National PolicyStatement No. 54 to advisers outside Canada. The CSA have agreed to expand the application of the mutual reliance review system for registration under thisInstrument to advisers from outside Canada.
9. Proposed National Instrument 81-102 Mutual Funds is based on National Policy Statement No. 39 which provides guidelines for mutual funds and has beenpublished for comment. Part 6 prescribes institutions that qualify as custodians and sub-custodians for mutual funds.
10. The term "foreign jurisdiction" is defined in National Instrument 14-101 Definitions as "a country other than Canada, or a political subdivision of a country,other than Canada".
11. These criteria are set out in Companion Policy 31-101 Mutual Reliance Review System for Registration as criteria to be considered by the regulators indetermining whether to act as principal regulator for a filer.
12. Under the mutual reliance review system for registration all individual filers will be registered with their principal regulator and not necessarily the principalregulator for his or her sponsoring firm. Co-ordination of registration between the principal regulator for the sponsoring firm and the principal regulator for theindividual filer is provided for in the Companion Policy. Approved persons will be approved by the principal regulator of the sponsoring firm.
13. Approved persons will only be subject to approval by the principal regulator of the sponsoring firm.
14. Fees for approval of approved persons made on an application for registration of a firm filer are only required in Ontario.
15. In Quebec the Securities Act (Quebec) does not provide for annual renewals of registration. All other Canadian securities regulatory authorities, except theNWT, have agreed to amend the Canadian securities legislation in their jurisdiction to remove the requirements for renewals of registration and replace them witha permanent registration model or may issue blanket orders exempting registrants from the annual renewal requirements.
16. See Note 14.
17. The renewal provisions are necessary on a transition basis and in particular for the NWT as the annual renewal requirement for registrants is in its legislationand the timing of a proposed amendment to the legislation to provide for a permanent registration model is unknown.
18. This provision is intended to provide for a single national expiration or suspension date for a filer.
19. See footnote 17.