CSA Notice: 81-302 - Sales of Mutual Funds in Upcoming RRSP Season

CSA NOTICE 81-302

CANADIAN SECURITIES ADMINISTRATORS STAFF NOTICE

SALES OF MUTUAL FUNDS IN UPCOMING RRSP SEASON

The Canadian Securities Administrators ("CSA") are finalizing their review of the commentsreceived in response to the CSA's request for comments on the proposed National Instrument81-105 Mutual Fund Sales Practices and Companion Policy 81-105CP (the "Instrument andPolicy") regarding sales practices in connection with the distribution of mutual funds. The lengthof time required for the CSA to consider and respond to the comments received, and the statutorytime periods and procedures to be followed in respect of the making of rules provided for in thesecurities legislation of some of the jurisdictions of the CSA, mean that the Instrument will not bein force in time for the upcoming RRSP season, as had been hoped. The CSA expect that thefinal versions of the Instrument and Policy will be published in January 1998 and will, subject toreceipt of required ministerial approvals, come into force on April 1, 1998.

Staff of the CSA wish to remind members of the mutual fund community that the Instrument andPolicy are based on the Recommendations for a Code of Sales Practices adopted by TheInvestment Funds Institute of Canada ("IFIC") and that IFIC, on behalf of its members, requestedthe CSA to use its rule-making power to make compliance with the Code of Sales Practicesmandatory. In issuing the Code of Sales Practices, IFIC stated that its recommended code isdesigned to establish the industry standard of conduct and to reflect its concern for investorprotection.

Accordingly, staff of the CSA expect that as a minimum the members of the mutual fundcommunity are complying with the provisions of the IFIC Code of Sales Practices and willcontinue to do so until the IFIC Code is superseded by the Instrument and Policy. The CSA alsourge industry participants to become familiar with the provisions of the Instrument and the Policyto ensure a smooth transition between compliance with the IFIC Code of Sales Practices andcompliance with the Instrument and Policy upon the latter instruments coming into force.

For further information contact:

 

Ross McLennan
Director, Registration
British Columbia Securities Commission
(604) 889-6685

Ian Kerr
Legal Counsel
Alberta Securities Commission
(403) 297-4225

Bob Bouchard
Deputy Director, Corporate Finance
Manitoba Securities Commission
(204) 945-2555

Rebecca Cowdery
Special Counsel, Market Operations
Ontario Securities Commission
(416) 593-8129

Pierre Martin
Legal Counsel, Service de la reglementation
Commission des valeurs mobilières du Québec
(514) 873-5326