Blanket Order #31-505
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.