31-511 (Blanket Order) - Registration Requirement Exemption for Trades in Short-Term Debt Instruments

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

Document Type: Blanket Order
Document No: 31-511
Subject: Exemption from the Registration Requirement for Trades in Short-Term Debt Instruments
Effective Date: September 28, 2011

Blanket Order 31-511

Exemption from the Registration Requirement for Trades in Short-Term Debt Instruments

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 14-101 Definitions have the same meaning.

1.2  “Approved credit rating” has the same meaning ascribed to it in NI 81-102 with the exception of paragraph (b) of such definition.

1.3  “NI 45-106" means National Instrument 45-106 Prospectus and Registration Exemptions.

1.4  “NI 81-102" means National Instrument 81-102 Mutual Funds.

Part 2 Background

2.1  A person or company in Prince Edward Island was, prior to March 27, 2010, exempt from the registration requirement for trades in short-term debt under section 3.35 of NI 45-106 which provided that the dealer registration requirement for short term debt was available only where, among other things, the negotiable promissory note or commercial paper “has an approved credit rating from an approved credit rating organization.”

2.2  NI 45-106 incorporated by reference the definitions for “approved credit rating” and “approved credit rating organization” in NI 81-102.

2.3  On March 27, 2010, the Superintendent issued Blanket Order 31-508 exempting certain Canadian financial institutions from the requirement to register when trading in short-term debt instruments, until September 28, 2011.

2.4  The Superintendent considers that extending the relief granted by Blanket Order 31-508 would not be prejudicial to the public interest.

Part 3 Order

It is ordered pursuant to section 16 of the Act that the dealer registration requirement does not apply to

(i)  a bank listed in Schedule I, II or III to the Bank Act (Canada);

(ii)  an association to which the Cooperative Credit Associations Act (Canada) applies or a central cooperative credit society for which an order has been made under subsection 473 (1) of that Act;

(iii)  a loan corporation, trust company, trust corporation, insurance company, treasury branch, credit union, caisse populaire, financial services cooperative or credit union league or federation that is authorized by a statute of Canada or of a jurisdiction in Canada to carry on business in Canada or in any jurisdiction in Canada as such, as the case may be;

(iv)  the Business Development Bank of Canada.

in respect of a trade in a negotiable promissory note or commercial paper maturing not more than one year from the date of issue, if the note or commercial paper traded

(a)  is not convertible or exchangeable into or accompanied by a right to purchase another security other than a security described in this order; and

(b)  has an approved credit rating issued by one of the following rating organizations, or any of their successors, at or above one of the following rating categories or a rating that replaces a category listed below:

Rating Organization - Rating
DBRS Limited - R-1 (low)
Fitch Ratings Ltd. - F2
Moody’s Investors Services, Inc. - P-2
Standard & Poor’s Corporation - A-2

Part 4 Effective Date

4.1  This Order will come into effect on September 28, 2011 and will cease to have effect on December 28, 2014.

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