On March 14, 2019, the Canadian Securities Administrators (CSA) published Annex B, Amendments to National Instrument 31-103, Registration Requirements, Exemptions and Ongoing Registrant Obligations (The Amendments).
Together, the Amendments replace subsections 14.6.1(1) and (2) of National Instrument 31-303, Registration Requirements and Ongoing Registrant Obligations (NI-303):
- In Subsection 146.1(1):
- “cleared specified derivative”, “clearing corporation option”, “futures exchange”, “option on futures”, “specified derivative” and “standardized future” have the same definitions as in 1.1 of National Instrument 81-102 Investment Funds (NI 81-102); and,
- “regulated clearing agency” is redefined to align with the definition in subsection 1(1) of National Instrument 94-101 Mandatory Central Counterparty Clearing of Derivatives (NI 94-101).
- Subsection 146.1(2) does not apply to a registered firm dealing with cash or securities of a client or investment fund deposited with a member of a regulated clearing agency or a dealer as margin for transactions outside of Canada involving clearing corporation options, options on futures, standardized futures, or cleared specified derivatives, if:
- the member or dealer is a member of a regulated clearing agency, futures exchange, or stock exchange, and, as a result in any case, is subject to a regulatory audit;
- the member or dealer has a net worth, determined from its most recent audited financial statements, in excess of $50 million; and,
- a reasonable person would conclude that using the member or dealer is more beneficial to the client or investment fund than using a Canadian custodian.
The Amendments come into force on June 12, 2019. In Saskatchewan, if the Amendments do not come into force at this time, they will come into force on the date it is filed with the Registrar of Regulations.
The Amendments are available for download from the website of the participating jurisdictions.
For more information, please call Barbara Hendrickson at BAX Securities Law (416) 601 -1004.
This publication is not intended to constitute legal advice. No one should act on it or refrain from acting on it without consulting with a lawyer. BAX does not warrant or guarantee the accuracy or currency or completeness of the publication. No part of this publication may be reproduced without the prior written permission of BAX Securities Law.