Amendments to OSC Rule 33-506 (Commodity Futures Act) Registration Information
Amendments to OSC Rule 33-506 (Commodity Futures Act) Registration Information
AMENDMENTS TO
ONTARIO SECURITIES COMMISSION RULE 33-506
(COMMODITY FUTURES ACT) REGISTRATION INFORMATION
1. Ontario Securities Commission Rule 33-506 (Commodity Futures Act) Registration Information is amended by this Instrument.
2. Section 1.1 is amended by
(a) adding the following definition:
"business location" means a location where the firm carries out an activity that requires registration, and includes a residence if regular and ongoing activity that requires registration is carried out from the residence or if records relating to an activity that requires registration are kept at the residence;,
(b) replacing the definition of "cessation date" with the following:
"cessation date" means the last day on which an individual had authority to act as a registered individual on behalf of their sponsoring firm or was a permitted individual of their sponsoring firm, because of the end of, or a change in, the individual's employment, partnership, or agency relationship with the firm;, and
(c) replacing the definition of "permitted individual" with the following:
"permitted individual" means
(a) a director, chief executive officer, chief financial officer, or chief operating officer of a firm, or a functional equivalent of any of those positions,
(b) an individual who has beneficial ownership of, or direct or indirect control or direction over, 10 percent or more of the voting securities of a firm, or
(c) a trustee, executor, administrator, or other personal or legal representative, that has direct or indirect control or direction over 10 percent or more of the voting securities of a firm;.
3. Subsection 2.3(2) is amended by
(a) adding "(other than Item 13.3(c))" after "[Regulatory disclosure]" in subparagraph (c)(i), and
(b) replacing paragraph (d) with the following:
(d) the individual is seeking reinstatement with a sponsoring firm in one or more of the same categories of registration in which the individual was registered on the cessation date;.
4. Section 3.1 is amended by replacing, in subsection (1), "subsections" with "subsection".
5. Section 3.1 is amended by replacing "for" with "approving" in subparagraph (3)(d)(iii).
6. Subsection 4.1(5) is amended by
(a) replacing ";" with "," at the end of paragraphs (a) and (b),
(b) replacing "." with ", or" at the end of paragraph (c), and
(c) adding the following paragraph:
(d) any information on Schedule C of Form 33-506F4..
7. Section 4.3 is amended by
(a) in paragraphs (2)(a) and (2)(b), replacing "subsection" with "paragraph", and
(b) in paragraph (4)(b), replacing "subsection" with "paragraph".
8. Part 8 is amended by replacing the title with "Effective date".
9. The title of all schedules to forms of Ontario Securities Commission Rule 33-506 (Commodity Futures Act) Registration Information is amended by replacing"SCHEDULE", wherever this word appears,with"Schedule".
10. Form 33-506F1 is amended by
(a) replacing the paragraph after the heading "Terms" with the following:
In this form, "cessation date" (or "effective date of termination") means the last day on which an individual had authority to act as a registered individual on behalf of their sponsoring firm or the last day on which an individual was a permitted individual of their sponsoring firm, because of the end of, or a change in, the individual's employment, partnership, or agency relationship with the firm.,
(b) replacing "termination date" with "cessation date" in the second paragraph after the heading "When to submit the form",
(c) in Item 3, replacing "Address" with "Business location address",
(d) in section 1 of Item 4 under "Cessation date / Effective date of termination", replacing the sentence with the following:
This is the last day that the individual had authority to act in a registerable capacity on behalf of the firm, or the last day that the individual was a permitted individual.,
(e) adding, at the end of section 2 of Item 4, the following:
If "Other", explain: _________________________,
(f) adding, in section 8 of Item 5, "or materially" after "Did the individual repeatedly", and
(g) replacing Item 7 with the following:
Item 7 Warning
It is an offence under securities legislation and derivatives legislation, including commodity futures legislation, to give false or misleading information on this form..
11. Form 33-506F2 is amended by
(a) adding "or provide notice of other changes to the information on Schedule C of Form 33-506F4" at the end of the sentence after the heading "GENERAL INSTRUCTIONS",
(b) replacing section 1 of Item 2 with the following:
1. Are you filing this form under the passport system / interface for registration?
Choose "No" if you are registered in
(a) only one jurisdiction of Canada
(b) more than one jurisdiction of Canada and you are requesting a surrender in a non-principal jurisdiction or jurisdictions, but not in your principal jurisdiction, or
(c) more than one jurisdiction of Canada and you are requesting a change only in your principal jurisdiction.
Yes
[ ]
No
[ ],
(c) deleting "of individual categories of registration" in section 2 of Item 2,
(d) replacing "36 month period" with "36-month period" in section 3 of Item 4,
(e) replacing ""Not Applicable" above" with ""N/A" " in section 3 of Item 4,
(f) replacing "yes" with "Yes" in section 3 of Item 4,
(g) adding, in Item 5, "registration" before "category",
(h) amending Item 6 by replacing "Schedule A" with "Schedule B" wherever this expression appears, and replacing, in the second paragraph, "SROs" with "SRO" and "enforce their respective by-laws" with "enforce its by-laws",
(i) replacing Item 7 with the following:
Item 7 Warning
It is an offence under securities legislation and derivatives legislation, including commodity futures legislation, to give false or misleading information on this form.,
(j) in Schedule A, replacing the third paragraph with the following:
Indicate the continuing education activities in which you have participated during the last 36 months and that are relevant to the category of registration you are applying for:, and
(k) replacing Schedule B with the following:
Schedule B
Contact information for Notice of collection and use of personal information
12. Form 33-506F3 is amended by
(a) replacing Item 1 with the following:
Item 1 Type of business location
Branch or business location [ ]
Sub-branch (Mutual Fund Dealers Association of Canada members only) [ ],
(b) replacing Item 3 with the following:
Item 3 Business location information
Business location address _________________________ (a post office box is not a valid business location address)
Mailing address (if different from business location address) ____________________
Telephone number (_____) _______________
Fax number (_____) _______________
E-mail address _______________,
(c) replacing, in the second paragraph of Item 4, "SROs" with "SRO", and "enforce their respective by-laws" with "enforce its by-laws",
(d) replacing Item 5 with the following:
Item 5 Warning
It is an offence under securities legislation and derivatives legislation, including commodity futures legislation, to give false or misleading information on this form.,
(e) adding the following at the end of the portion of the Form with the heading "Certification -- NRD format" in Item 6:
[ ] If the business location is a residence, the individual conducting business from that business location has completed a Form 33-506F4 Registration of Individuals and Review of Permitted Individuals certifying that they give their consent for the regulator or, in Québec, the securities regulatory authority to enter the residence for the administration of securities legislation and derivatives legislation, including commodity futures legislation.,
(f) replacing the first paragraph under the heading "Certification -- Format other than NRD format" in Item 6 with the following:
By signing below, I certify to the securities regulator or, in Québec, the securities regulatory authority, in each jurisdiction where I am submitting this form for the firm, either directly or through the principal regulator, that:
• I have read this form and understand the questions,
• all of the information provided on this form is true, and complete, and
• if the business location specified in this form is a residence, the individual conducting business from that business location has completed a Form 33-506F4 Registration of Individuals and Review of Permitted Individuals certifying that they give their consent for the regulator or, in Québec, the securities regulatory authority to enter the residence for the administration of securities legislation and derivatives legislation, including commodity futures legislation., and
(g) replacing Schedule A with the following:
Schedule A
Contact information for Notice of collection and use of personal information
13. Form 33-506F4 is amended by
(a) replacing the paragraph under the heading "GENERAL INSTRUCTIONS" with the following:
Complete and submit this form to the relevant regulator(s) or in Québec, the securities regulatory authority, or self-regulatory organization (SRO) if an individual is seeking
• registration in individual categories,
• to be reviewed as a permitted individual.
You are only required to submit one form even if you are applying to be registered in several categories. This form is also used if you are seeking to be reviewed as a permitted individual. A post office box is not acceptable as a valid business location address.,
(b) replacing the portion of the Form after the heading "Terms" and before the heading "How to submit this form" with the following:
In this form:
"Approved person" means, in respect of a member (Member) of the Investment Industry Regulatory Organization of Canada (IIROC), an individual who is a partner, director, officer, employee or agent of a Member who is approved by IIROC or another Canadian SRO to perform any function required under any IIROC or other Canadian SRO by-law, rule, or policy;
"Canadian Investment Manager designation" means the designation earned through the Canadian investment manager program prepared and administered by CSI Global Education Inc. and so named on the day this Instrument comes into force, and every program that preceded that program, or succeeded that program, that does not have a significantly reduced scope and content when compared to the scope and content of the first-mentioned program;
"CFA Charter" means the charter earned through the Chartered Financial Analyst program prepared and administered by the CFA Institute and so named on the day this Instrument comes into force, and every program that preceded that program, or succeeded that program, that does not have a significantly reduced scope and content when compared to the scope and content of the first-mentioned program;
"Derivatives" means financial instruments, such as futures contracts (including exchange traded contracts), futures options and swaps whose market price, value or payment obligations are derived from, or based on, one or more underlying interests. Derivatives can be in the form of instruments, agreements or securities;
"Major shareholder" and "shareholder" mean a shareholder who, in total, directly or indirectly owns voting securities carrying 10 per cent or more of the votes carried by all outstanding voting securities;
"Sponsoring firm" means the registered firm where you will carry out your duties as a registered or permitted individual; and
"You", "your" and "individual" mean the individual who is seeking registration or the individual who is filing this form as a permitted individual under securities legislation or derivatives legislation or both.,
(c) under the heading "NRD format", deleting "You are only required to submit one form regardless of the number of registration categories you are seeking.", and replacing "securities regulation experience" with "securities law experience",
(d) replacing, in the second paragraph under the heading "Format, other than NRD format", "Item" with "item",
(e) replacing, in the third paragraph under the heading "Format, other than NRD format", "securities regulation experience" with "securities law experience", and "National Registration Database", with "NRD",
(f) replacing, in sections 2 and 3 of Item 1, "yes" with "Yes",
(g) adding the following at the end of Item 2:
3. Business e-mail address
_________________________
(h) amending section 1 of Item 5 by
(i) replacing "no" with "No",
(ii) deleting "only in your principal jurisdiction" in paragraph (b), and
(iii) replacing "," with "." after "in any jurisdiction of Canada",
(i) amending Item 7 by
(i) in the first paragraph of section 1, replacing "A post office box is not acceptable" with "A post office box is not an acceptable address for service", and
(ii) replacing "E-mail address, if available", at the end of section 1, with "Business e-mail address",
(j) replacing section 2 of Item 8 with the following:
2. Student numbers
If you have a student number for a course that you successfully completed with one of the following organizations, provide it below:
CSI Global Education: ____________________
IFSE Institute: ____________________
Institute of Canadian Bankers (ICB): _______________
CFA Institute: ____________________
Advocis: ____________________
RESP Dealers Association of Canada: ____________________
Other: _________________________,
(k) amending section 4 of Item 8 by
(i) replacing "Not Applicable below" with "N/A",
(ii) replacing "36 month period" with "36-month period", and
(iii) replacing "yes" with "Yes",
(l) replacing Item 9 with the following:
Item 9 Location of employment
1. Provide the following information for your new sponsoring firm. If you will be working out of more than one business location, provide the following information for the business location out of which you will be doing most of your business. If you are only filing this form because you are a permitted individual and you are not employed by, or acting as agent for, the sponsoring firm, select "N/A".
NRD location number: ____________________
Unique Identification Number (optional): ____________________
Business location address: _________________________ (number, street, city, province, territory or state, country, postal code)
Telephone number: (_____) _______________
Fax number: (_____) _______________
N/A
[ ]
2. If the firm has a foreign head office, and/or you are not a resident of Canada, provide the address for the business location in which you will be conducting most of your business. If you are only filing this form because you are a permitted individual and you are not employed by, or acting as agent for, the sponsoring firm, select "N/A".
Business location address: _________________________ (number, street, city, province, territory or state, country, postal code)
Telephone number: (_____) _______________
Fax number: (_____) _______________
N/A
[ ]
[The following under #3 "Type of business location", #4 and #5 is for a Format other than NRD format only]
3. Type of business location:
[ ] Head office
[ ] Branch or business location
[ ] Sub-branch (members of the Mutual Fund Dealers Association of Canada only)
4. Name of supervisor or branch manager: _______________
5. [ ] Check here if the mailing address of the business location is the same as the business location address provided above. Otherwise, complete the following:
Mailing address: _________________________ (number, street, city, province, territory or state, country, postal code),
(m) replacing Item 10 with the following:
Item 10 Current employment, other business activities, officer positions held and directorships
Complete a separate Schedule G for each of your current business and employment activities, including employment and business activities with your sponsoring firm and any employment and business activities outside your sponsoring firm. Also include all officer or director positions and any other equivalent positions held, as well as positions of influence. The information must be provided
• whether or not you receive compensation for such services, and
• whether or not any such position is business related.,
(n) replacing Item 11 with the following:
Item 11 Previous employment and other activities
On Schedule H, complete your history of employment and other activities for the past 10 years.,
(o) amending Item 12 by adding a "," after "Schedule I", wherever it appears,
(p) amending Item 13 as follows:
(i) adding "The questions below relate to any jurisdiction of Canada and any foreign jurisdiction." after the heading "Item 13 Regulatory disclosure",
(ii) deleting "in any province, territory, state or country" wherever these words appear, and
(iii) replacing, in paragraph (c) of section 1, "8(3)" with "8.3",
(q) replacing Item 14 with the following:
Item 14 Criminal disclosure
The questions below apply to offences committed in any jurisdiction of Canada and any foreign jurisdiction.
You must disclose all offences, including:
• a criminal offence under federal statutes such as the Criminal Code (Canada), Income Tax Act (Canada), the Competition Act (Canada), Immigration and Refugee Protection Act (Canada) and the Controlled Drugs and Substances Act (Canada), even if
• a record suspension has been ordered under the Criminal Records Act (Canada)
• you have been granted an absolute or conditional discharge under the Criminal Code (Canada), and
• a criminal offence, with respect to questions 14.2 and 14.4, of which you or your firm has been found guilty or for which you or your firm have participated in the alternative measures program within the previous three years, even if a record suspension has been ordered under the Criminal Records Act (Canada)
You are not required to disclose:
• charges for summary conviction offences that have been stayed for six months or more,
• charges for indictable offences that have been stayed for a year or more,
• offences under the Youth Criminal Justice Act (Canada), and
• speeding or parking violations.
Subject to the exceptions above:
1. Are there any outstanding or stayed charges against you alleging a criminal offence that was committed?
Yes
[ ]
No
[ ]
If "Yes", complete Schedule K, Item 14.1.
2. Have you ever been found guilty, pleaded no contest to, or been granted an absolute or conditional discharge from any criminal offence that was committed?
Yes
[ ]
No
[ ]
If "Yes", complete Schedule K, Item 14.2.
3. To the best of your knowledge, are there any outstanding or stayed charges against any firm of which you were, at the time the criminal offence was alleged to have taken place, a partner, director, officer or major shareholder?
Yes
[ ]
No
[ ]
If "Yes", complete Schedule K, Item 14.3.
4. To the best of your knowledge, has any firm, when you were a partner, officer, director or major shareholder, ever been found guilty, pleaded no contest to or been granted an absolute or conditional discharge from a criminal offence that was committed?
Yes
[ ]
No
[ ]
If "Yes", complete Schedule K, Item 14.4.,
(r) amending Item 15 as follows:
(i) adding "The questions below relate to any jurisdiction of Canada and any foreign jurisdiction." after the heading "Item 15 Civil disclosure", and
(ii) deleting "in any province, territory, state or country" wherever these words appear,
(s) replacing, in section 2 of Item 16, "$5,000" wherever it appears, with "$10,000",
(t) amending Item 20 as follows:
(i) in the second sentence of the second paragraph under the heading "SROs", replacing "protected by law such as, police" with "protected by law such as police", and
(ii) replacing the first sentence of the last paragraph of Item 20 with the following:
You certify that you have discussed the questions in this form, together with this Agreement, with an Officer, Supervisor or Branch Manager of your sponsoring member firm and, to your knowledge and belief, the authorized Officer, Supervisor or Branch Manager was satisfied that you fully understood the questions and the terms of this Agreement.,
(u) replacing Item 21 with the following:
Item 21 Warning
It is an offence under securities legislation and derivatives legislation, including commodity futures legislation, to give false or misleading information on this form.,
(v) amending Item 22 as follows:
(i) adding the following after the last sentence of the first paragraph of section 1:
If the business location specified in this form is a residence, I hereby give my consent for the regulator or, in Québec, the securities regulatory authority to enter that residence for the administration of securities legislation and derivatives legislation, including commodity futures legislation.,
(ii) adding "and the certification above" after "provided me with all of the information on this form" in the last paragraph of section 1, and
(iii) replacing, in the "Individual" section of "Certification -- Format other than NRD format", the first paragraph with the following:
By signing below, I certify to the regulator, or in Québec the securities regulatory authority, in each jurisdiction where I am filing or submitting this form, either directly or through the principal regulator, that:
• I have read this form and understand the questions,
• all of the information provided on this form is true, and complete, and
• if the business location specified in this form is a residence, I hereby give my consent for the regulator or, in Québec, the securities regulatory authority to enter that residence for the administration of securities legislation and derivatives legislation, including commodity futures legislation.
Signature of individual __________ Date __________ ,
(w) amending Schedule A by
(i) replacing "?" with ":" after "(for example, marriage, divorce, court order, commonly used name or nickname)" in Item 1.2 wherever it occurs,
(ii) deleting "?" after "(for example, trade name or team name)" in Item 1.3 under the heading "Name 1:",
(iii) replacing "N\A" with "N/A" in Item 1.3 under the heading "Name 1:", and
(iv) adding "N/A [ ]" after "No [ ]" in Item 1.3 under the headings "Name 2:" and "Name 3:",
(x) amending Schedule C by
(i) adding "[ ] permitted individual" between "[ ] Chief Compliance Officer" and "[ ] Officer -- Specify title:" in "Categories common to all jurisdictions under securities legislation-- Individual categories and permitted activities",
(ii) replacing "[ ] Floor Trader" with "[ ] Floor Broker" in "Manitoba-- Individual categories and permitted activities", and
(iii) replacing the section for "Québec" with the following:
Québec
Firm categories
[ ] Derivatives Dealer
[ ] Derivatives Portfolio Manager
Individual categories and permitted activities
[ ] Derivatives Dealing Representative
[ ] Derivatives Advising Representative
[ ] Derivatives Associate Advising Representative,
(y) amending Schedule D by replacing "E-mail address" in Item 7.1 with "Business e-mail address" ,
(z) amending Schedule E by replacing the text after the table with the following:
If you have listed the CFA Charter in Item 8.1, please indicate by checking "Yes" below if you are a current member of the CFA Institute permitted to use this charter.
Yes
[ ]
No
[ ]
If "No", please explain why you no longer hold this designation:
______________________________
______________________________
______________________________
If you have listed the Canadian Investment Manager Designation in Item 8.1, please indicate by checking "Yes" below if you are currently permitted to use this designation.
Yes
[ ]
No
[ ]
If "No", please explain why you no longer hold this designation:
______________________________
______________________________
______________________________
(aa) amending Item 8.4 of Schedule F by replacing the last paragraph with the following:
Indicate the continuing education activities in which you have participated during the last 36 months and that are relevant to the category of registration you are applying for:,
______________________________
______________________________
______________________________
(ab) amending Schedule G as follows:
(i) replacing the first paragraph with the following:
Complete a separate Schedule G for each of your current business and employment activities, including employment and business activities with your sponsoring firm and any employment and business activities outside your sponsoring firm. Also include all officer or director positions and any other equivalent positions held, as well as positions of influence. The information must be provided
• whether or not you receive compensation for such services, and
• whether or not any such position is business related.,
(ii) deleting "with this firm" after "include details" in the paragraph under the heading "3. Description of duties", and
(iii) adding "." at the end of the sentence in paragraph D. under the heading "5. Conflicts of interest",
(ac) amending Schedule J by replacing, in paragraph (c) of Item 13.1, "8(3)" with "8.3",
(ad) amending Item 14.2 and Item 14.4 of Schedule K by adding "," after "discharge from a criminal offence",
(ae) amending Schedule M by adding "the" after "including why" in Item 16.2,
(af) amending Schedule N as follows:
(i) replacing, in the first paragraph, "Firm name:" with the following:
Name of firm (whose business is trading in or advising on securities or derivatives, or both):
_________________________, and
(ii) replacing, in paragraph (g), "if applicable" with "N/A [ ]" wherever it appears, and
(ag) replacing Schedule O with the following:
Schedule O
Contact information for Notice of collection and use of personal information
14. Form 33-506F5 is amended by
(a) replacing the numbers "1." and "2." with bullet points in the first paragraph after the heading "GENERAL INSTRUCTIONS",
(b) replacing, in the second paragraph of Item 3, "SROs" with "SRO", and "enforce their respective by-laws" with "enforce its by-laws",
(c) replacing Item 4 with the following:
Item 4 Warning
It is an offence under securities legislation and derivatives legislation, including commodity futures legislation, to give false or misleading information on this form.,
(d) replacing Schedule A with the following:
Schedule A
Contact information for Notice of collection and use of personal information
15. Form 33-506F6 is amended by
(a) replacing "Firm registration" with "Firm Registration" in the title of Form 33-506F6,
(b) adding "In this form:" immediately after the heading "Definitions",
(c) replacing "Principal Regulator" with "Principal regulator" in the list under the heading "Definitions",
(d) replacing, "Supervisory procedured person(s)" with "Supervisory procedure person(s)" in the list under the heading "Definitions",
(e) replacing "Submission to Jurisdiction and Appointment of Agent for Service" with "Submission to jurisdiction and appointment of agent for service" in section 1 of the portion of the Form after the heading "Contents of the form",
(f) replacing section 2 of the portion of the Form after the heading "Contents of the form" with the following:
2. Business plan, policies and procedures manual, and client agreements (except in Ontario) (question 3.3),
(g) replacing, in the fifth paragraph in the portion of the Form after the heading "How to complete and submit the form", "Appendix A of Companion Policy 33-109CPRegistration Information" with "Appendix B of Companion Policy 33-506CP (Commodity Futures Act) Registration Information" ,
(h) replacing, in the eighth paragraph of the portion of the Form after the heading "How to complete and submit the form","which" with"that",
(i) adding after the eighth paragraph of the portion of the Form under the heading "How to complete and submit the form" the following:
It is an offence under securities legislation and derivatives legislation, including commodity futures legislation, to give false or misleading information on this form.,
(j) replacing, in the margin note opposite the first paragraph in the portion of the Form after the heading "Updating the information on the form" , "NI 33-506" with "OSC Rule 33-506",
(k) deleting the "*" after question "5.5" in the third paragraph of section 1.3,
(l) amending section 2.2 as follows:
(i) adding "location" after "business" in paragraph (a) wherever it appears, and
(ii) replacing paragraph (b) with the following:
(b) If a firm is not registered in a jurisdiction of Canada, indicate the jurisdiction of Canada in which the firm expects to conduct most of its activities that require registration as at the end of its current financial year or conducted most of its activities that require registration as at the end of its most recently completed financial year.,
(m) replacing "Submission to Jurisdiction and Appointment of Agent for Service" with "Submission to jurisdiction and appointment of agent for service" in section 2.4,
(n) replacing section 2.5 and 2.6 with the following:
2.5 Ultimate designated person
A registered firm must have an individual registered in the category of ultimate designated person unless the firm is only registered under the Commodity Futures Act (Ontario).
Legal name
Officer title
Telephone number
E-mail address
NRD number, if available
Address
[ ]
Same as firm head office address
Address line 1
Address line 2
City
Province/territory/state
Country
Postal/zip code
2.6 Chief compliance officer and/or supervisory procedure person
A registered firm must have an individual registered in the category of chief compliance officer and/or an individual responsible for its supervisory procedures.
[ ]
Same as ultimate designated person
Legal name
Officer title
Telephone number
E-mail address
NRD number, if available
Address
[ ]
Same as firm head office address
Address line 1
Address line 2
City
Province/territory/state
Country
Postal/zip code
(o) replacing the third paragraph of section 3.3 with the following:
Attach the firm's business plan, policies and procedures manual and client agreements, including any investment policy statements and investment management agreements, except if the regulator in Ontario is the principal regulator of the firm seeking registration, unless the regulator in Ontario has requested they be provided.,
(p) adding "." at the end of the second bullet in section 5.1,
(q) replacing section 5.1 with the following:
5.1 Calculation of excess working capital
Attach the firm's calculation of excess working capital.
• Investment dealers must use the capital calculation form required by the Investment Industry Regulatory Organization of Canada (IIROC).
• Mutual fund dealers must use the capital calculation form required by the Mutual Fund Dealers Association of Canada (MFDA), except for mutual fund dealers registered in Québec only.
• If the firm is only applying for registration as an adviser under the Commodity Futures Act (Ontario), attach the firm's calculation of minimum free capital in accordance with section 14 of Regulation 90 under that Act.
• Other firms that are not members of either IIROC or the MFDA must use Form 31-103F1 Calculation of Excess Working Capital. See Schedule C.
(r) replacing "all jurisdiction" with "all jurisdictions" in the second paragraph of Item 5.4,
(s) adding the following margin note for section 5.6:
This information is required only if the firm is applying for registration in Québec as a mutual fund dealer or as a scholarship plan dealer.,
(t) replacing "for" with "approving" in the title of section 5.7,
(u) replacing the first paragraph of Part 9 with the following:
It is an offence under securities legislation and derivatives legislation, including commodity futures legislation, to give false or misleading information on this form.,
(v) replacing Schedule A with the following:
Schedule A
Contact information for Notice of collection and use of personal information
(w) amending Schedule B by replacing"Submission to Jurisdiction and Appointment of Agent for Service" with"Submission to jurisdiction and appointment of agent for service"in sections 7 and 8, and under the heading "Acceptance", wherever these terms appear, and
(x) replacing Schedule C with the following:
Schedule C
FORM 31-103F1 CALCULATION OF EXCESS WORKING CAPITAL
____________________
Firm Name
Capital Calculation
(as at __________ with comparative figures as at __________)
Component
Current period
Prior period
1.
Current assets
__________
__________
2.
Less current assets not readily convertible into cash (e.g., prepaid expenses)
__________
__________
3.
Adjusted current assets Line 1 minus line 2 =
__________
__________
4.
Current liabilities
__________
__________
5.
Add 100% of non-current related party debt unless the firm and the lender have executed a subordination agreement in the form set out in Appendix B of National Instrument 31-103 Registration Requirements, Exemptions and Ongoing Registrant Obligations and the firm has delivered a copy of the agreement to the regulator or, in Québec, the securities regulatory authority. See section 12.2 of National Instrument 31-103 Registration Requirements, Exemptions and Ongoing Registrant Obligations.
__________
__________
6.
Adjusted current liabilities Line 4 plus line 5 =
__________
__________
7.
Adjusted working capital Line 3 minus line 6 =
__________
__________
8.
Less minimum capital
__________
__________
9.
Less market risk
__________
__________
10.
Less any deductible under the bonding or insurance policy required under Part 12 of National Instrument 31-103 Registration Requirements, Exemptions and Ongoing Registrant Obligations
__________
__________
11.
Less Guarantees
__________
__________
12.
Less unresolved differences
__________
__________
13.
Excess working capital
__________
__________
Notes:
Form 31-103F1 Calculation of Excess Working Capital must be prepared using the accounting principles that you use to prepare your financial statements in accordance with National Instrument 52-107 Acceptable Accounting Principles and Auditing Standards. Section 12.1 of Companion Policy 31-103CP Registration Requirements, Exemptions and Ongoing Registrant Obligations provides further guidance in respect of these accounting principles.
Line 5. Related-party debt -- Refer to the CICA Handbook for the definition of "related party" for publicly accountable enterprises. The firm is required to deliver a copy of the executed subordination agreement to the regulator or, in Québec, the securities regulatory authority on the earlier of a) 10 days after the date the agreement is executed or b) the date an amount subordinated by the agreement is excluded from its calculation of excess working capital on Form 31-103F1 Calculation of Excess Working Capital. The firm must notify the regulator or, in Québec, the securities regulatory authority, 10 days before it repays the loan (in whole or in part), or terminates the subordination agreement. See section 12.2 of National Instrument 31-103 Registration Requirements, Exemptions and Ongoing Registrant Obligations.
Line 8. Minimum Capital -- The amount on this line must be not less than (a) $25,000 for an adviser and (b) $50,000 for a dealer. For an investment fund manager, the amount must be not less than $100,000 unless subsection 12.1(4) of National Instrument 31-103 Registration Requirements, Exemptions and Ongoing Registrant Obligations applies.
Line 9. Market Risk -- The amount on this line must be calculated according to the instructions set out in Schedule 1 to Form 31-103F1 Calculation of Excess Working Capital. A schedule supporting the calculation of any amounts included in Line 9 as market risk should be provided to the regulator or, in Québec, the securities regulatory authority in conjunction with the submission of Form 31-103F1 Calculation of Excess Working Capital.
Line 11. Guarantees -- If the registered firm is guaranteeing the liability of another party, the total amount of the guarantee must be included in the capital calculation. If the amount of a guarantee is included in the firm's statement of financial position as a current liability and is reflected in line 4, do not include the amount of the guarantee on line 11.
Line 12. Unresolved differences -- Any unresolved differences that could result in a loss from either firm or client assets must be included in the capital calculation. The examples below provide guidance as to how to calculate unresolved differences:
(i) If there is an unresolved difference relating to client securities, the amount to be reported on Line 12 will be equal to the fair value of the client securities that are short, plus the applicable margin rate for those securities.
(ii) If there is an unresolved difference relating to the registrant's investments, the amount to be reported on Line 12 will be equal to the fair value of the investments (securities) that are short.
(iii) If there is an unresolved difference relating to cash, the amount to be reported on Line 12 will be equal to the amount of the shortfall in cash.
Please refer to section 12.1 of Companion Policy 31-103CP Registration Requirements, Exemptions and Ongoing Registrant Obligations for further guidance on how to prepare and file Form 31-103F1 Calculation of Excess Working Capital.
- - - - - - - - - - - - - - - - - - - -
Management Certification
Registered Firm Name: ____________________
We have examined the attached capital calculation and certify that the firm is in compliance with the capital requirements as at _______________.
Name and Title
Signature
Date
1.
_______________
_______________
_______________
_______________
2.
_______________
_______________
_______________
_______________
- - - - - - - - - - - - - - - - - - - -
Schedule 1 of Form 31-103F1 Calculation of Excess Working Capital (calculating line 9 [market risk])
For purposes of completing this form:
(1) "Fair value" means the value of a security determined in accordance with Canadian GAAP applicable to publicly accountable enterprises.
(2) For each security whose value is included in line 1, Current Assets, multiply the fair value of the security by the margin rate for that security set out below. Add up the resulting amounts for all of the securities you hold. The total is the "market risk" to be entered on line 9.
(a) Bonds, Debentures, Treasury Bills and Notes
(i) Bonds, debentures, treasury bills and other securities of or guaranteed by the Government of Canada, of the United Kingdom, of the United States of America and of any other national foreign government (provided such foreign government securities are currently rated Aaa or AAA by Moody's Canada Inc. or its DRO affiliate, or Standard & Poor's Rating Services (Canada) or its DRO affiliate, respectively), maturing (or called for redemption):
within 1 year:
1% of fair value multiplied by the fraction determined by dividing the number of days to maturity by 365
over 1 year to 3 years:
1 % of fair value
over 3 years to 7 years:
2% of fair value
over 7 years to 11 years:
4% of fair value
over 11 years:
4% of fair value
(ii) Bonds, debentures, treasury bills and other securities of or guaranteed by any jurisdiction of Canada and obligations of the International Bank for Reconstruction and Development, maturing (or called for redemption):
within 1 year:
2% of fair value multiplied by the fraction determined by dividing the number of days to maturity by 365
over 1 year to 3 years:
3 % of fair value
over 3 years to 7 years:
4% of fair value
over 7 years to 11 years:
5% of fair value
over 11 years:
5% of fair value
(iii) Bonds, debentures or notes (not in default) of or guaranteed by any municipal corporation in Canada or the United Kingdom maturing:
within 1 year:
3% of fair value multiplied by the fraction determined by dividing the number of days to maturity by 365
over 1 year to 3 years:
5 % of fair value
over 3 years to 7 years:
5% of fair value
over 7 years to 11 years:
5% of fair value
over 11 years:
5% of fair value
(iv) Other non-commercial bonds and debentures (not in default): 10% of fair value
(v) Commercial and corporate bonds, debentures and notes (not in default) and non-negotiable and non-transferable trust company and mortgage loan company obligations registered in the registered firm's name maturing:
within 1 year:
3% of fair value
over 1 year to 3 years:
6 % of fair value
over 3 years to 7 years:
7% of fair value
over 7 years to 11 years:
10% of fair value
over 11 years:
10% of fair value
(b) Bank Paper
Deposit certificates, promissory notes or debentures issued by a Canadian chartered bank (and of Canadian chartered bank acceptances) maturing:
within 1 year:
2% of fair value multiplied by the fraction determined by dividing the number of days to maturity by 365
over 1 year:
apply rates for commercial and corporate bonds, debentures and notes
(c) Acceptable foreign bank paper
Deposit certificates, promissory notes or debentures issued by a foreign bank, readily negotiable and transferable and maturing:
within 1 year:
2% of fair value multiplied by the fraction determined by dividing the number of days to maturity by 365
over 1 year:
apply rates for commercial and corporate bonds, debentures and notes
"Acceptable Foreign Bank Paper" consists of deposit certificates or promissory notes issued by a bank other than a Canadian chartered bank with a net worth (i.e., capital plus reserves) of not less than $200,000,000.
(d) Mutual Funds
Securities of mutual funds qualified by prospectus for sale in any jurisdiction of Canada:
(i) 5% of the net asset value per security as determined in accordance with National Instrument 81-106 Investment Fund Continuous Disclosure, where the fund is a money market mutual fund as defined in National Instrument 81-102 Investment Funds; or
(ii) the margin rate determined on the same basis as for listed stocks multiplied by the net asset value per security of the fund as determined in accordance with National Instrument 81-106 Investment Fund Continuous Disclosure.
Securities of mutual funds qualified by prospectus for sale in the United States of America: 5% of the net asset value per security if the fund is registered as an investment company under the Investment Companies Act of 1940, as amended from time to time, and complies with Rule 2a-7 thereof.
(e) Stocks
In this paragraph, "securities" includes rights and warrants and does not include bonds and debentures.
(i) On securities including investment fund securities, rights and warrants, listed on any exchange in Canada or the United States of America:
Long Positions -- Margin Required
Securities selling at $2.00 or more -- 50% of fair value
Securities selling at $1.75 to $1.99 -- 60% of fair value
Securities selling at $1.50 to $1.74 -- 80% of fair value
Securities selling under $1.50 -- 100% of fair value
Short Positions -- Credit Required
Securities selling at $2.00 or more -- 150% of fair value
Securities selling at $1.50 to $1.99 -- $3.00 per share
Securities selling at $0.25 to $1.49 -- 200% of fair value
Securities selling at less than $0.25 -- fair value plus $0.25 per share
(ii) For positions in securities that are constituent securities on a major broadly-based index of one of the following exchanges, 50% of the fair value:
(a) Australian Stock Exchange Limited
(b) Bolsa de Madrid
(c) Borsa Italiana
(d) Copenhagen Stock Exchange
(e) Euronext Amsterdam
(f) Euronext Brussels
(g) Euronext Paris S.A.
(h) Frankfurt Stock Exchange
(i) London Stock Exchange
(j) New Zealand Exchange Limited
(k) Stockholm Stock Exchange
(l) SIX Swiss Exchange
(m) The Stock Exchange of Hong Kong Limited
(n) Tokyo Stock Exchange
(f) Mortgages
(i) For a firm registered in any jurisdiction of Canada except Ontario:
(a) Insured mortgages (not in default): 6% of fair value
(b) Mortgages which are not insured (not in default): 12% of fair value.
(ii) For a firm registered in Ontario:
(a) Mortgages insured under the National Housing Act (Canada) (not in default): 6% of fair value
(b) Conventional first mortgages (not in default): 12% of fair value.
- - - - - - - - - - - - - - - - - - - -
If you are registered in Ontario regardless of whether you are also registered in another jurisdiction of Canada, you will need to apply the margin rates set forth in (ii) above.
- - - - - - - - - - - - - - - - - - - -
(g) For all other securities -- 100% of fair value..
16. Form 33-506F7 is amended by
(a) replacing the first sentence after the heading "GENERAL INSTRUCTIONS" with the following:
Complete and submit this form to the relevant regulator(s) or in Québec, the securities regulatory authority, or self-regulatory organization (SRO) if an individual has left a sponsoring firm and is seeking to reinstate their registration in one or more of the same categories or reinstate their same status of permitted individual as before with a sponsoring firm.,
(b) replacing "end of three months" with "90th day" in section 1 after the heading "GENERAL INSTRUCTIONS",
(c) adding "other than changes to Item 13.3(c)" after "Items 13 (Regulatory Disclosure)" in section 2 after the heading "GENERAL INSTRUCTIONS",
(d) in the last paragraph after the heading "Terms", replacing "[Registration of Individuals and Review of Permitted Individuals]" with "Registration of Individuals and Review of Permitted Individuals" and deleting "or elsewhere in the securities legislation of your province or territory. Please refer to those definitions",
(e) adding "with securities law experience" after "legal adviser" in the paragraph after the heading "NRD format" and in the third paragraph after the heading "Format, other than NRD format",
(f) replacing "If "yes"" with "If "Yes"" in the last sentence of section 4 of Item 1,
(g) replacing "E-mail address, if available" in section 1 of Item 4 with "Business e-mail address",
(h) replacing Item 5 with the following:
Item 5 Location of employment
1. Provide the following information for your new sponsoring firm. If you will be working out of more than one business location, provide the following information for the business location out of which you will be doing most of your business. If you are only filing this form because you are a permitted individual and are not employed by, or acting as agent for, the sponsoring firm, select "N/A".
Unique Identification Number (optional): __________
NRD location number: _______________
Business location address: _________________________ (number, street, city, province, territory or state, country, postal code)
Telephone number: (_____)__________ Fax number: (_____)__________
N/A
[ ]
2. If the new sponsoring firm has a foreign head office, and/or you are not a resident of Canada, provide the address for the business location in which you will be conducting most of your business. If you are only filing this form because you are a permitted individual and are not employed by, or acting as agent for, the sponsoring firm, select "N/A".
Business location address: _________________________ (number, street, city, province, territory or state, country, postal code)
Telephone number: (_____)__________ Fax number: (_____)__________
N/A
[ ]
[The following under #3 "Type of business location", #4 and #5 is for a Format other than NRD format only]
3. Type of business location:
[ ] Head office
[ ] Branch or business location
[ ] Sub-branch (Mutual Fund Dealers Association of Canada members only)
4. Name of supervisor or branch manager: ____________________
5. [ ] Check here if the mailing address of the business location is the same as the business location address provided above. Otherwise, complete the following:
Mailing address: _________________________ (number, street, city, province, territory or state, country, postal code),
(i) replacing Item 7 with the following:
Item 7 Current employment, other business activities, officer positions held and directorships
Name of your new sponsoring firm: _______________
Complete a separate Schedule D for each of your current business and employment activities, including employment and business activities with your new sponsoring firm and any employment and business activities outside your new sponsoring firm. Also include all officer or director positions and any other equivalent positions held, as well as positions of influence. The information must be provided
• whether or not you receive compensation for such services, and
• whether or not any such position is business related.,
(j) adding ", other than changes to Item 13.3(c)" after "Regulatory disclosure (Item 13" in section 1 of Item 9,
(k) replacing "'Reactivation of Registration' " with ""Reactivation of Registration"" in the second paragraph of section 2 of Item 9,
(l) replacing Item 11 with the following:
Item 11 Warning
It is an offence under securities legislation and derivatives legislation, including commodity futures legislation, to give false or misleading information on this form.,
(m) replacing section 1 of Item 12 with the following:
1. Certification -- NRD format:
I confirm I have discussed the questions in this form with an officer, branch manager or supervisor of my sponsoring firm. To the best of my knowledge, the officer, branch manager or supervisor was satisfied that I fully understood the questions. I will limit my activities to those permitted by my category of registration. If the business location specified in this form is a residence, I hereby give my consent for the regulator or, in Québec, the securities regulatory authority to enter that residence for the administration of securities legislation and derivatives legislation, including commodity futures legislation.
[ ] I am making this submission as agent for the individual. By checking this box, I certify that the individual provided me with all of the information on this form and the certification above.,
(n) in section 2 of Item 12, replacing the portion of the Form after the heading "Individual" and before the heading "Authorized partner or officer of the new sponsoring firm" with the following:
By signing below, I certify to the regulator, or in Québec the securities regulatory authority, in each jurisdiction where I am submitting this form, either directly or through the principal regulator that:
• I have read the form and understand the questions,
• all of the information provided on this form is true, and complete, and
• if the business location specified in this form is a residence, I hereby give my consent for the regulator or, in Québec, the securities regulatory authority to enter that residence for the administration of securities legislation and derivatives legislation, including commodity futures legislation.
Signature of individual_______________ Date signed__________ (YYYY/MM/DD),
(o) amending Schedule B as follows:
(i) adding "[ ] Permitted Individual" between "[ ] Chief Compliance Officer" and "[ ] Officer -- Specify title:" in "Categories common to all jurisdictions under securities legislation- Individual categories and permitted activities",
(ii) replacing "[ ] Floor Trader" with "[ ] Floor Broker" in "Manitoba-- Individual categories and permitted activities", and
(iii) replacing the section for "Québec" with the following:
Québec
Firm categories
[ ] Derivatives Dealers
[ ] Derivatives Portfolio Manager
Individual categories and permitted activities
[ ] Derivatives Dealing Representative
[ ] Derivatives Advising Representative
[ ] Derivatives Associate Advising Representative,
(p) amending Schedule C by replacing "E-mail address" in Item 4.1 with "Business e-mail address",
(q) amending Schedule D as follows:
(i) replacing the first paragraph with the following:
Complete a separate Schedule D for each of your current business and employment activities, including employment and business activities with your new sponsoring firm and any employment and business activities outside your new sponsoring firm. Also include all officer or director positions and any other equivalent positions held, as well as positions of influence. The information must be provided
• whether or not you receive compensation for such services, and
• whether or not any such position is business related., and
(ii) deleting "with this firm" after "include details" in the paragraph under the heading "3. Description of duties",
(iii) renumbering paragraph D in section 5 as paragraph E, and
(iv) adding the following paragraph before paragraph E in section 5:
D. State the name of the person at your sponsoring firm who has reviewed and approved your multiple employment or business related activities or proposed business related activities.
______________________________
______________________________
______________________________,
(r) amending Schedule E by
(i) replacing the title of the Schedule "Ownership of securities and derivatives firms (Item 8)" with "Ownership of securities in new sponsoring firm (Item 8)",
(ii) adding, after "Firm name" in the first paragraph, "(whose business is trading in or advising on securities or derivatives, or both)", and
(iii) replacing, in paragraph (g), "if applicable" with "N/A [ ]" wherever it appears, and
(s) replacing Schedule F with the following:
Schedule F
Contact information for Notice of collection and use of personal information
Coming into force
17. This Instrument comes into force on January 11, 2015.