CSA Notice: 31-320 - Additional Request for Comment by the OSC and Autorité des Marchés Financiers on Proposed Exemptions from Investment Fund Manager Registration Requirement for International and Certain Domestic Investment Fund Managers

CSA NOTICE 31-320

ADDITIONAL REQUEST FOR COMMENT BY THE

ONTARIO SECURITIES COMMISSION AND AUTORITÉ DES MARCHÉS FINANCIERS

ON PROPOSED EXEMPTIONS

FROM INVESTMENT FUND MANAGER REGISTRATION REQUIREMENT

FOR INTERNATIONAL AND CERTAIN DOMESTIC INVESTMENT FUND MANAGERS

The Canadian Securities Administrators (the CSA) are today publishing a notice and request for comments (the CSA Notice) on proposed amendments to National Instrument 31-103 Registration Requirements and Exemptions (NI 31-103) and Companion Policy 31-103 CP Registration Requirements and Exemptions (the Companion Policy) relating to the registration of international and certain domestic investment fund managers. The CSA Notice follows this Notice.

The proposed amendments include two new exemptions from the investment fund manager registration requirement for non-resident investment fund managers, which are described in the CSA Notice as follows:

1. Section 8.29.1 -- International investment fund manager -- An international investment fund manager would not need to be registered if the investment fund it manages is only distributed to permitted clients, provided certain other conditions are met.

We are proposing thresholds for this exemption so that an international investment fund manager that has a significant presence in the Canadian market would not be able to rely on this exemption. The proposed thresholds are

• the fair value of all of the assets attributable to Canadian security holders of any investment fund for which it acts as investment fund manager should not be more than 10% of the fair value of all the assets of such fund

• the total assets of all funds managed by the investment fund manager that are attributable to Canadian security holders should be less than $50 million

We specifically invite comments on the calculations required to monitor these thresholds and whether the thresholds proposed are appropriate.

2. Section 8.29.2 -- Non-resident investment fund manager -- This is a grandfathering exemption for non-resident investment fund managers where neither the investment fund manager nor the investment fund has actively solicited local residents after September 28, 2011.

REQUEST FOR COMMENT

The proposed new section 8.29.2 does not include the same threshold limitations proposed for Section 8.29.1. This means that an international investment fund manager or a domestic investment fund manager, referred to in section 8.29.2 would not be required to register as an investment fund manager in the province or territory -- regardless of the size of its investment fund -- as long as it does not actively solicit local residents after September 28, 2011.

The Ontario Securities Commission and the Autorité des marchés financiers specifically invite comments on whether it would be appropriate to apply to the exemption proposed in section 8.29.2 [non-resident investment fund manager] the same threshold limitations proposed for the exemption in section 8.29.1[international investment fund manager] which are described above and more particularly set out in subsection 8.29.1(4).

All comments will be posted on the Ontario Securities Commission website at www.osc.gov.on.ca and on the Autorité des marchés financiers website at www.lautorite.qc.ca.

All comments will be made publicly available.

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Please note that we cannot keep submissions confidential because securities legislation in certain provinces requires publication of a summary of the written comments received during the comment period. In this context, you should be aware that some information which is personal to you, such as your e-mail and residential or business address, may appear in the websites. It is important that you state on whose behalf you are making the submission.

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Thank you in advance for your comments.

Deadline for comments

Your comments must be submitted in writing by January 13, 2011.

Please send your comments electronically in Word, Windows format.

Where to send your comments

Please send your comments only to the addresses below.

Questions

Please refer your questions to any of:

October 15, 2010