31-505 (Blanket Order) (Revoked) - Registration Requirements and Exemptions for Mutual Fund Dealers

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

Document Type: Blanket Order
Document No: 31-505
Subject: Exemption from paragraph 13.2(2)(b) of National Instrument 31-103 Registration Requirements and Exemptions for Mutual Fund Dealers
Effective Date: February 26, 2010

Blanket Order 31-505

Exemption from paragraph 13.2(2)(b) of National Instrument 31-103 Registration Requirements and Exemptions for Mutual Fund Dealers

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 NI 31-103 or National Instrument 14-101 Definitions have the same meaning.

1.2 “NI 31-103" means National Instrument 31-103 Registration Requirements and Exemptions.

Part 2 Background

2.1 Paragraph 13.2(2)(b) of NI 31-103 provides that a registrant must take reasonable steps to establish whether a client is an insider of a reporting issuer or any other issuer whose securities are publicly traded.

2.2 The purpose of this requirement is to ensure compliance with insider trading rules by requiring dealers to notify a client of the client’s obligation to file an insider trade report.

2.3 If a registrant limits its trading with clients to certain securities, only in very rare circumstances will a trade require the filing of an insider trade report.

2.4 Compliance with paragraph 13.2(2)(b) of NI 31-103 presents significant costs to mutual fund dealers that are not justified when trading with a client is limited to certain securities.

Part 3 Order

3.1 It is ordered pursuant to section 16 of the Act that a person or company registered in the category of a mutual fund dealer as defined in NI 31-103 in Prince Edward Island is exempt from paragraph 13.2(2)(b) of NI 31-103 if such person or company is not registered in any other category specified in section 7.1 of NI 31-103.

Part 4 Effective Date

4.1 This Order takes effect on February 26, 2010.

Dated at Charlottetown, Prince Edward Island, this 26th day of February, 2010.