31-513 (Blanket Order) - Transitional Relief for MFDA Member Firms

Securities Act
R.S.P.E.I. 1988, Cap.-S-3.1

Document Type: Blanket Order
Document No.: 31-513
Subject: Transitional relief from the requirement to provide the relationship disclosure information prescribed by section 14.2(1) of NI 31-103 for MFDA member firms
Effective Date: September 28, 2011

Blanket Order 31-513

Transitional relief from the requirement to provide the relationship disclosure information prescribed by section 14.2(1) of NI 31-103 for MFDA member firms

Part 1 Definitions

1.1  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.

Part 2 Background

2.1  Under section 14.2(1) [Relationship disclosure information] of NI 31-103, a registered firm must deliver to a client all information that a reasonable investor would consider important about the client’s relationship with the registrant.

2.2  The Mutual Fund Dealers Association of Canada (the MFDA) has adopted new member rules for relationship disclosure information (the MFDA RDI Rules) finalizing a proposal on relationship disclosure information (MFDA RDI Proposal), published on July 26, 2010 in MFDA Bulletin 0444-P -  Proposed amendments to MFDA Rule 2.2 (Client accounts), Policy No. 2 Minimum Standards for account supervision, Rule 2.8 (Client communications) and Rules 5.3 (Client reporting).

2.3  The purpose of the MFDA RDI Rules is to set out detailed requirements to assist registered firms who are MFDA members to comply with the general principle in section 14.2(1) of NI 31-103.

2.4  Under section 16.14 of NI 31-103, temporary relief from the application of section 14.2(1) of NI 31-103 was available until September 28, 2010 to persons that were registered on the date when NI 31-103 came into effect.

2.5  On September 28, 2010, the Superintendent issued Blanket Order 31-510 providing further temporary relief from the application of section 14.2(1) of NI 31-103 to MFDA members.

2.6  The MFDA RDI Rules will be implemented in phases, starting on September 28, 2011 and ending December 3, 2013.

2.7  Since the MFDA RDI Rules will be fully implemented by December 3, 2013, the cost that MFDA members will incur by having to comply with section 14.2(1) of NI 31-103 in the interim is not justified.

Part 3 Order

3.1  Section 14.2(1) of NI 31-103 does not apply to registered firms that are members of the MFDA, provided the MFDA member complies with the MFDA RDI Rules subject to applicable transition periods.

Part 4 Effective Date

4.1  This Order will come into effect on September 28, 2011 and expires on December 31, 2013.

Dated at Charlottetown, Prince Edward Island, this 28th day of September, 2011.