32-520 - Exemption from specific obligation to identify those who own or control more than 10% of a corporate client [BCI - Revoked]
| Published Date: | 2010-11-05 |
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| Effective Date: | 2010-11-05 |
| Rescinded Date: | 2011-09-16 |
| Document(s): |
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The British Columbia Securities Commission, considering that to do so would not be prejudicial to the public interest, orders that effective November 5, 2010, BC Instrument 32-520 entitled Exemption from specific obligation to identify those who own or control more than 10% of a corporate client is made.
November 5, 2010
Brenda M. Leong
Chair
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(This part is for administrative purposes only and is not part of the Order)
Authority under which Order is made:
Act and sections: Securities Act, section 48(1)
BC Instrument 32-520
Order under section 48(1) of the Securities Act
Exemption from specific obligation to identify those who own or control more than 10% of a corporate client
Definitions
1. Unless otherwise defined in this decision or the context otherwise requires, terms used in this decision that are defined in National Instrument 31-103 Registration Requirements and Exemptions (NI 31-103) or National Instrument 14-101 Definitions have the same meaning in this order.
Background
2 As part of the know your client requirements, section 13.2(3)(b)(i) of NI 31-103 requires a registrant (other than an investment fund manager) to establish the identity of any individual who owns or exercises control or direction over more than 10% of the voting rights attached to the outstanding voting securities of a corporation that is a client.
3. The costs incurred by mutual fund dealers in order to comply with section 13.2(3)(b)(i) of NI 31-103 exceed the benefit because mutual fund dealers:
(i) trade primarily in securities of mutual funds that are bound by certain restrictions on investments; and
(ii) comply with the provisions of the Proceeds of Crime (Money Laundering) and Terrorist Financing Act (Canada), in order to obtain certain information about all persons who own or control 25% or more of the shares of a corporation that is a client.
5. The Commission considers that limited relief from the requirements in section 13.2(3)(b)(i) of NI 31-103 would not be prejudicial to the public interest.
Order
6. Section 13.2(3)(b)(i) of NI 31-103 does not apply to a registrant that is a mutual fund dealer in respect of a client that is a corporation, provided that the mutual fund dealer:
(a) is not registered in any other categories of registration other than as a mutual fund dealer or as both a mutual fund dealer and an investment fund manager; and
(b) complies with the provisions of the Proceeds of Crime (Money Laundering) and Terrorist Financing Act (Canada) requiring the identification of any person who owns or controls 25% or more of the shares of a corporation that is a client.