33-104 - Selling Arrangements [Proposed NI - Lapsed]
| Published Date: | 1997-11-28 |
|---|
Selling Arrangements1,2
1 This proposed Instrument is derived from The Principles of Regulation Re: Activities of Registrants Related to Financial Institutions. This proposed Instrument is expected to be adopted as a rule in British Columbia, Alberta, Ontario and Nova Scotia, as a Commission regulation in Saskatchewan and as a policy in all other jurisdictions represented by the CSA.
2 A national definition instrument has been adopted as National Instrument 14-101 Definitions. It contains definitions of certain terms used in more than one national instrument. National Instrument 14-101 also provides that a term used in a national instrument and defined in the statute relating to securities of the applicable 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 to securities 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.
PART 1 DEFINITION
1.1 Definition - In this Instrument, "selling arrangement" means an arrangement between a registrant and a Canadian financial institution3
3 The term "Canadian financial institution" is defined in National Instrument 14-101 Definitions to mean: "a bank, trust company, loan corporation, insurance company, treasury branch, credit union and caisse populaire that is authorized to carry on business in Canada or a jurisdiction or the Confédération des caisses populaires et d'économie Desjardins du Québec."
under which the registrant agrees to attempt to induce a client, or requires a client as a condition of dealing with or purchasing a product or service from the registrant, to deal with or purchase a product or service from the Canadian financial institution.
PART 2 NOTICE
2.1 Notice
(1) A registrant that intends to enter a selling arrangement shall, at least 30 days before entering the arrangement, give written notice to the regulator providing all relevant facts relating to the selling arrangement.
(2) The regulator shall determine whether the arrangement affords an adequate level of investor protection or otherwise raises public interest concerns.
(3) If, within 30 days of receipt of a notice under subsection (1), the regulator gives a written notice of objection to the registrant, the registrant shall not enter into the selling arrangement until the regulator gives written approval to do so.
(4) The registrant, following receipt of a notice of objection under subsection (3), may request the regulator to hold a hearing on the matter.4
4 The language in this Instrument is derived from the networking notice provisions of Canadian securities legislation in certain jurisdictions. In Ontario, it is derived from section 229 of the Regulation.
2.2 Exception
(1) Despite section 2.1, a notice is not required for a selling arrangement under which a registrant agrees to attempt to induce a client to deal with or purchase a product or service from a Canadian financial institution if the inducement does not result in the client paying more for the service or product provided by the registrant.
(2) In Quebec, subsection 2.2(1) is not applicable.
(3) In British Columbia, subsection 2.2(1) is not applicable for a registrant that intends to enter into a selling arrangement with a Canadian financial institution of which the registrant is not a related party.
PART 3 EXEMPTION
3.1 Exemption
(1) The regulator or the securities regulatory authority may grant an exemption to this Instrument, in whole or in part, subject to such conditions or restrictions as may be imposed in the exemption.
(2) Despite subsection (1), in Ontario, only the regulator may grant such an exemption.