BCN 2000/58 - Adoption of National Instrument 35-101 Conditional Exemption from Registration for United States Broker-Dealers and Agents and Related Documents [BCN - Rescinded]

The Commission, together with other members of the Canadian Securities Administrators (“CSA”), has adopted National Instrument 35-101 Conditional Exemption from Registration for United States Broker-Dealers and Agents, including Form 35-101F1 Form of Submission to Jurisdiction and Appointment of Agent for Service of Process by Broker-Dealer and Form 35-101F2 Form of Submission to Jurisdiction and Appointment of Agent for Service of Process by Agents of the Broker-Dealer (collectively, “NI 35-101”), and Companion Policy 35-101CP (the “Companion Policy”). 

The full texts of NI 35-101 (B.C. Reg. 422/2000) and the Companion Policy are attached to this notice.  NI 35-101 and the Companion Policy will be effective on January 1, 2001. 

NI 35-101 is an initiative of the CSA and has been or will be adopted as a rule in each of British Columbia, Alberta, Manitoba, Ontario and Nova Scotia, as a commission regulation in Saskatchewan, and as a policy, blanket order or ruling in all other jurisdictions represented by the CSA.  The Companion Policy is expected to be implemented as a policy in all CSA jurisdictions by January 1, 2001.

Rescission of CSA Notice 35-301

Effective January 1, 2001, CSA Notice 35-301 Conditional Exemption from Registration for United States Broker-Dealers and Agents is rescinded.

Background

 In conjunction with other CSA members, the Commission published drafts of NI 35-101 and the Companion Policy for comment on October 17, 1997.¹  The CSA received 36 comment letters on NI 35-101.
^{1 NIN#97/40}

Details of the comments received, the responses of the CSA to those comments and specific changes made to the published drafts may be found in the OSC Notice relating to NI 35-101 on the OSC website site at www.osc.gov.on.ca.

The Commission provided advance notice of NI 35-101 and the Companion Policy on November 17, 2000.^{2
2NIN#2000/51}

Substance and Purpose

NI 35-101 provides certain United States broker-dealers and their agents with an exemption from the applicable registration and prospectus requirements under Canadian securities legislation. Under the exemption, a United States broker-dealer and its agents may engage in two specific types of cross-border trading activities in foreign securities.

Each of the Canadian securities regulatory authorities retains the authority to revoke the exemption, subject to applicable statutory provisions governing hearings and reviews, as it applies to a broker-dealer or agent if it considers the broker-dealer’s or agent’s conduct to be contrary to the public interest.

The Companion Policy advises that a person does not normally cease to be “ordinarily resident” in the United States while being “temporarily resident” in Canada.  The Companion Policy also provides guidance on the operation of the exemptive relief provided in NI 35-101 and information about the types of inquiries the CSA may make about past conduct of broker-dealers and their agents in Canada.

DATED at Vancouver, British Columbia, on December 20, 2000.

Douglas M. Hyndman
Chair

Ref: NIN#97/40
NIN#2000/51
CSA Staff Notice 35-301

This NIN may refer to other documents. These documents can be found at the B.C. Securities Commission public website at www.bcsc.bc.ca in the Commission Documents database or the Historical Documents database.