NIN 2000/51 - Advance Notice of Adoption of National Instrument 35-101 and Related Documents Conditional Exemption from Registration for United States Broker-Dealers and Agents [NIN - Rescinded]

National Instrument 35-101 Conditional Exemption from Registration for United States Broker-Dealers and Agents and Companion Policy 35-101CP provide United States broker-dealers and their agents with a conditional exemption from the applicable registration and prospectus requirements under Canadian securities legislation for cross-border trading in foreign securities with their clients from the US who are present in a Canadian jurisdiction. NI 35-101 and the Companion Policy implement a proposal of the North American Securities Administrators Association.

Implementation of NI 35-101

The Commission has not yet made NI 35-101 as a rule nor has it adopted the Companion Policy. This Advance Notice is being published to advise that, if the required government approval is obtained, the Commission expects to make NI 35-101 as a rule before January 1, 2001, when NI 35-101 is expected to come into force as a rule in British Columbia, Alberta, Manitoba, Ontario and Nova Scotia, as a commission regulation in Saskatchewan, and as a policy, blanket order or ruling in the 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.

The Commission anticipates publishing NI 35-101 and the Companion Policy in December 2000, if and when it has received all necessary approvals. However, the Ontario Securities Commission (“OSC”) is publishing NI 35-101 and the Companion Policy in the November 17, 2000 issue of the OSC Bulletin. These documents are also available on the OSC website at www.osc.gov.on.ca.

Elimination of CSA Notice 35-301

Staff are recommending that the CSA eliminate CSA Notice 35-301 on or before the adoption of proposed NI 35-101, as it no longer reflects the current status of reciprocity in the USA.

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.

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.

Substance and Purpose

NI 35-101 provides a registration exemption for US broker-dealers and their agents to deal in foreign securities with an individual ordinarily resident in the US who is temporarily resident in a Canadian jurisdiction. The broker-dealer must have had a broker-dealer client relationship before the individual became temporarily resident in the Canadian jurisdiction.

NI 35-101 also provides a registration exemption for US broker-dealers and their agents to deal in foreign securities with an individual who was previously resident in the US and who is resident in a Canadian jurisdiction. The trades must be for or with the individual’s tax-advantaged retired savings plan.

NI 35-101 provides ancillary prospectus and underwriting registration exemptions.

Each of the Canadian securities regulatory authorities retains the authority to revoke the exemptions, subject to a hearing if required, for a particular broker-dealer or agent if it considers the broker-dealer’s or agent’s conduct to be contrary to the public interest.


DATED at Vancouver, British Columbia, on November 16, 2000.


Douglas M. Hyndman
Chair

Ref: CSAN 35-301
NIN#27/40

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.