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Securities Law

31-103 - Registration Requirements [NI Proposed - Lapsed]

Published Date: 2007-02-20
Document(s):

Concurrently Published:

Table of Contents
 
PART 1 - DEFINITIONS 5
1.1 Definitions 5

PART 2 - CATEGORIES OF REGISTRATION AND PERMITTED ACTIVITIES 6
2.1 Dealer categories 6
2.2 Exemption from dealer registration for advisers 7
2.3 Adviser categories 7
2.4 Exemption from adviser registration for dealers without discretionary authority 7
2.5 Exemption from adviser registration for IDA members with discretionary authority 7
2.6 Individual categories 8
2.7 Associate advising representative - approved advising only 8
2.8 Ultimate designated person 8
2.9 Chief compliance officer 9

PART 3 - SRO MEMBERSHIP 9
3.1 IDA membership for investment dealers 9
3.2 MFD SRO membership for mutual fund dealers 9
3.3 Exceptions for SRO members 9

PART 4 - FIT AND PROPER REQUIREMENTS 10
Division 1: Proficiency requirements 10
4.1 Definitions 10
4.2 Time limits on examination proficiency 11
4.3 Mutual fund dealer - dealing representative - non-MFD SRO 12
4.4 Mutual fund dealer - chief compliance officer - non-MFD SRO 12
4.5 Scholarship plan dealer - dealing representative 13
4.6 Scholarship plan dealer - chief compliance officer 13
4.7 Exempt market dealer - dealing representative 13
4.8 Exempt market dealer - chief compliance officer 14
4.9 Portfolio manager - advising representative 14
4.10 Portfolio manager - associate advising representative 14
4.11 Portfolio manager - chief compliance officer 15
4.12 Restricted portfolio manager - chief compliance officer 16
4.13 Investment fund manager - chief compliance officer 16

Division 2: Solvency requirements 16
4.14 Capital requirement 16
4.15 Report capital deficiency 16
4.16 Insurance - dealer 17
4.17 Insurance - adviser 17
4.18 Insurance - investment fund manager 18
4.19 Notice of change, claim or cancellation 18

Division 3: Financial records 18
4.20 Appointment of auditor 18
4.21 Direction to auditor 18
4.22 Delivering financial information - dealer 19
4.23 Delivering financial information - adviser 19
4.24 Delivering financial information - investment fund manager 19
4.25 Notice of change in year end 20
4.26 Audit of financial statements and auditor's report 20
4.27 Content of financial statements 21

PART 5 - CONDUCT RULES 21
Division 1: Account opening and know-your-client 21
5.1 Application - investment fund managers exempt 21
5.2 Account opening and client documentation 21
5.3 Know-your-client 21
5.4 Suitability 22
5.5 Exception - instructed trades from registrant or financial institution 22
5.6 Leverage disclosure 23
5.7 Disclosure for activities in a financial institution 23

Division 2: Relationship Disclosure 24
5.8 Application 24
5.9 Definition - "relationship disclosure document" 24
5.10 Providing relationship disclosure document 24
5.11 Plain language 25
5.12 Content of relationship disclosure document 25

Division 3:  Client assets 26
5.13 Securities, cash and other property 26
5.14 Securities subject to safekeeping agreement 27
5.15 Securities not subject to safekeeping agreement 27
5.16 Reduction of debit balances 27
5.17 Margin 29
5.18 Accounts supervision 29

Division 4: Record-keeping 29
5.19 Records - general requirements 29
5.20 Records - form, accessibility and retention 30

Division 5: Account activity reporting 30
5.21 Confirmation of trade - general 30
5.22 Reporting trades otherwise 31
5.23 Semi-annual confirmations for certain automatic plans 32
5.24 Confirmation of trade - exemption 32
5.25 Statements of account and portfolio 32

Division 6: Compliance 33
5.26 Compliance system 33
5.27 Reporting to board or partnership 33
5.28 Access to board or partnership 33

Division 7: Complaint handling 33
5.29 Complaints 33
5.30 Dispute resolution service 34
5.31 Policies and procedures on complaint handling 34
5.32 Reporting to the regulator or securities regulatory authority 34

Division 8: Non-resident registrants 34
5.33 Application to non-residents 34
5.34 Notice to clients 34
5.35 Custody of assets 35
5.36 Compliance with requests 35
5.37 Maintain registration in home jurisdiction 35

PART 6 - CONFLICTS 36
Division 1: General 36
6.1 Conflicts management obligations 36
6.2 Prohibition on certain managed account transactions 36
6.3 Registrant relationships 37
6.4 Issuer disclosure statement 38
6.5 Research recommendations 39
6.6 Fairness in allocation of investment opportunities 39
6.7 Acquisition of securities or assets of a registrant 40
6.8 Underwriting conflicts 41
6.9 Settling securities transactions 41
6.10 Tied selling 41

Division 2: Referral arrangements 41
6.11 Definitions - referral arrangements 41
6.12 Permitted referral arrangements 42
6.13 Disclosing referral arrangements to clients 42
6.14 Reasonable diligence when referring clients 43
6.15 Application and transition to prior referral arrangements 43

PART 7 - SUSPENSION AND REVOCATION OF REGISTRATION 43
7.1 Activities prohibited when suspended 43
7.2 Suspension of registered firm 44
7.3 Suspension of SRO approval 44
7.4 Failure to pay fees 44
7.5 Termination of employment, etc. 44
7.6 Reinstatement 44
7.7 Revocation of registration 45
7.8 Exception - hearing 45

PART 8 - INFORMATION SHARING 45
8.1 Firms' obligation to share information 45

PART 9 - EXEMPTIONS FROM REGISTRATION 46
Division 1: General 46
9.1 Definitions 46
9.2 Investment fund distributing through dealer 46
9.3 Investment fund reinvestment 46
9.4 Additional investment in investment funds 47
9.5 Private investment fund - loan and trust pools 47
9.6 Mortgages 48
9.7 Personal Property Security Act 48
9.8 Variable insurance contract 49
9.9 Schedule III banks and cooperative associations - evidence of deposit 49
9.10 Plan administrators 49
9.11 Adviser 50
9.12 Advising generally 50
9.13 International dealer 51
9.14 International portfolio manager 53
9.15 Privately placed funds offered primarily abroad 55
9.16 International investment fund manager 56
9.17 Sub-advisers 57

Division 2: Mobility exemptions 57
9.18 Definitions - mobility exemptions 57
9.19 Administrative change of principal regulator 58
9.20 Notice to non-principal regulator 58
9.21 Notice of change of principal regulator 59
9.22 Mobility exemption - registered firm 59
9.23 Mobility exemption - registered individual 59
9.24 Mobility exemption conditions 60

PART 10 - EXEMPTION 60
10.1 Exemption 60
 
FORM 31-103F1 CALCULATION OF EXCESS WORKING CAPITAL 61
 
FORM 31-103F2 FIRM SUBMISSION TO JURISDICTION AND APPOINTMENT OF AGENT FOR SERVICE 63

FORM 31-103F3 NOTICE OF PRINCIPAL REGULATOR 65

APPENDIX A - FINANCIAL INSTITUTION BOND CLAUSES 66