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Blanket Order #31-505

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.

 

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