32-501 - Advising And Related Trading Under An Exemption [BCI- Rescinded]

1.         the attached BC Instrument 32-501 entitled “Advising and Related Trading Under an Exemption” is made; and

2.         BOR#95/15, BOR#95/16 and BOR#96/20 are revoked.  

April 25, 2001  

Brent W. Aitken

Member 

(This part for administrative purposes only and is not part of the Order)

Authority under which Order is made:

Act and sections:         Securities Act, sections 48, 76 and 171

Other (specify):

BCI#32-501

BC INSTRUMENT 32-501 (Previously BOR#95/15, BOR#95/16 and BOR#96/20) 

Advising And Related Trading Under An Exemption

Order under sections 48 and 76 of the Securities Act

Advising about some securities does not require registration

1.         A person does not have to be registered under section 34(1)(c) of the Securities Act if that person advises about securities described in:

(a)        section 46(a), (b), (f), (h) or (i) of the Act, or 

(b)        section 46(d) of the Act, if the security has one of the minimum credit ratings in this table:

Rating Agency	Rating
Canadian Bond Rating Service Inc.	A-1 (low)
Dominion Bond Rating Service Limited	R-1 (low)
Moody’s Investors Service, Inc.	P-1
Standard & Poor’s Corporation	A-1.

and the person acting as an advisor does not know or ought not reasonably to know that the rating agency announced that the rating may be down-graded to a level below the level indicated in the table. 

Advising about or trading in negotiable promissory notes or commercial paper

2.         A person advising about or trading in promissory notes or commercial paper maturing a maximum of twelve months from the issue date does not have to be registered under sections 34(1)(a) and (c) of the Securities Act, and the security does not have to be distributed by prospectus under section 61 of the Act if:

(a)        each note or commercial paper has a minimum denomination or principal amount of $50,000, 

(b)        if the note or commercial paper is convertible or exchangeable into or accompanied by a right to purchase another security, the security must be described in section 46 of the Act,

(c)        each note or commercial paper has one of the minimum credit ratings in this table:

and the person trading, or acting as an advisor, does not know or ought not reasonably to know that the rating agency announced that the rating may be down-graded to a level below the level indicated in this table. 

Persons regulated by the Mortgage Brokers Act may advise without securities registration

3.         A person registered or exempted from registration under the Mortgage Brokers Act, R.S.B.C. 1996, c. 313 may advise about the securities referred to in section 46(e) of the Securities Act without being registered under section 34(1)(c) of the Securities Act if

(1)        the person receiving the advice is an institutional investor, or

(2)        the security

(a)        is a debt obligation secured by a mortgage, or other encumbrance, on real property, and

(b)        is not a syndicated mortgage, as defined in BC Instrument 45-501.

Persons regulated by the Real Estate Act may advise without securities registration

4.         A person licensed as an agent, nominee or salesperson under the Real Estate Act, R.S.B.C. 1996, c. 397 may advise about the securities referred to in section 46(k) of the Securities Act without being registered under the Securities Act.

Insurance agents or salespeople may advise without securities registration

5.         A person licensed as an insurance agent or insurance salesperson under the Financial Institutions Act, R.S.B.C. 1996, c. 141 may advise about the securities referred to in section 46(l) of the Securities Act, without being registered under the Securities Act.

Trust Companies may advise without securities registration

6.         A trust company advertising its portfolio management or investment counseling services does not have to be registered under section 34(1)(c) of the Securities Act, if the portfolio management or investment counseling services are solely incidental to the trust company’s business as

(a)        executor or administrator of an estate,

(b)        trustee of a testamentary or inter vivos trust,

(c)        committee of the estate of a “person with a mental disorder”, as defined in the Mental Health Act, R.S.B.C. 1996, c. 288,

(d)        guardian of the estate of a “minor”, as defined in the Interpretation Act, R.S.B.C. 1996, c. 238,

(e)        attorney under a power of attorney for a client who lacks the legal capacity to manage his or her own affairs, or

(f)         administrator of a private charitable foundation.