Securities
Notice of Multilateral Policy 31-102 Registration Requirement for Investment Fund Managers
Notice of Multilateral Policy 31-202 Registration Requirement for Investment Fund Managers and Amendments to Companion Policy 31-103CP
Registration Requirements, Exemptions and Ongoing Registrant Obligations
Registration Requirement for Investment Fund Managers
July 5, 2012
1. Introduction
The following jurisdictions (the MP 31-202 jurisdictions) are implementing Multilateral Policy 31-202 Registration Requirement for Investment Fund Managers (MP 31-202):
British Columbia
Alberta
Saskatchewan
Manitoba
Prince Edward Island
Nova Scotia
New Brunswick
Northwest Territories
Yukon
Nunavut
2. Substance and Purpose
MP 31-202 provides guidance about the general principles that apply to determining whether a person is required to register as an investment fund manager in the MP 31-202 jurisdictions, including guidance on the types of activities that investment fund managers typically conduct. The MP 31-202 jurisdictions expect MP 31-102 to become effective September 28, 2012.
Securities legislation provides that unless registered, a person must not act as an investment fund manager. The legislation defines an “investment fund manager” as a person that directs or manages the business, operations or affairs of an investment fund. Accordingly, an investment fund manager would only be required to register in a jurisdiction if it directs or manages the business, operations or affairs of the investment fund in that jurisdiction. We interpret directing or managing the business, operations or affairs of an investment fund to encompass oversight and direction of the fund, which establish a real and substantial connection to the jurisdiction. This does not require the investment fund manager to be physically present in the jurisdiction. It does require the activities to take place in the jurisdiction.
In determining if registration is required, the person should consider what activities are taking place in these jurisdictions, including those functions and activities listed in MP 31-202. We would not expect that any single function or activity would be determinative. Specifically, functions or activities tied to presence of security holders, solicitation of investors or distribution of securities in a jurisdiction are not activities that give rise to investment fund manager registration, unless they are directed from within the jurisdiction and result in the person directing or managing the business operations or affairs of an investment fund in the jurisdiction.
The securities regulators in Ontario, Quebec and Newfoundland and Labrador are implementing a different multilateral instrument and multilateral companion policy, relating to the investment fund manager registration requirement in those jurisdictions. The interpretation of the investment fund manager registration requirement in these jurisdictions is significantly different than in the MP 31-202 jurisdictions.
All CSA jurisdictions are implementing the same minor consequential amendments to Companion Policy 31-103CP (NI 31-103CP) effective September 28, 2012.
3. Contents of this Notice
This notice contains the following annexes:
· Annex A – Multilateral Policy 31-202 Registration Requirement for Investment Fund Managers
· Annex B – Amendments to Companion Policy 31-103CP Registration Requirements, Exemptions and Ongoing Registrant Obligations
· Annex C – Summary of Comments and Responses to the Proposed Multilateral Policy 31-202 Registration Requirement for Investment Fund Managers and to Amendments to Companion Policy 31-103CP Registration Requirements, Exemptions and Ongoing Registrant Obligations
4. Background
October 2010 Proposal
On October 15, 2010, the CSA published a proposal for comment setting out the circumstances in which non-resident investment fund managers would need to register in a jurisdiction (the October 2010 Proposal). In response to the comments received on the October 2010 Proposal, and after further consideration by the CSA we are not proceeding with the amendments to National Instrument 31-103 Registration Requirements, Exemptions and Ongoing Registrant Obligations (NI 31-103) and its companion policy that were set out in the October 2010 Proposal.
February 2012 Proposal
On February 10, 2012 certain securities regulators in the MP 31-202 jurisdictions published MP 31-202 for comment (the February 2012 Proposal). The MP 31-202 jurisdictions are proceeding to adopt MP 31-202, with only a few minor amendments.
5. Summary of comments received by the MP 31-202 jurisdictions
We received 14 comment letters on the February 2012 Proposal. The comments were extremely helpful in finalizing MP 31-202. Copies of the comment letters are available on the British Columbia Securities Commission website: www.bcsc.bc.ca.
A list of the commenters and a summary of the comments, together with our responses, is contained in Annex C to this notice.
6. Summary of key changes to MP 31-202
In response to comments received, we clarify in MP 31-202 that functions or activities tied to the presence of security holders, solicitation of investors or the distribution of securities in a jurisdiction will not give rise to investment fund manager registration, unless they are directed from within the jurisdiction and result in the person directing or managing the business operations or affairs of an investment fund in the jurisdiction.
7. Transition
The transition provisions in sections 16.5 and 16.6 of NI 31-103, which exempt certain investment fund managers from the registration requirement, expire on September 28, 2012. MP 31-202 will be effective on that date. However, all CSA members are issuing parallel exemption orders so that investment fund managers affected by the change will not need to register by September 28, 2012; they must apply for registration by December 31, 2012.
8. Questions
Please refer your questions to any of the following CSA staff:
Lindy Bremner
Senior Legal Counsel, Capital Markets Regulation
British Columbia Securities Commission
Tel: 604-899-6678
Fax: 1-800-373-6393
lbremner@bcsc.bc.ca
Navdeep Gill
Manager, Registration
Alberta Securities Commission
Tel: 403-355-9043
navdeep.gill@asc.ca
Dean Murrison
Deputy Director, Legal and Registration
Saskatchewan Financial Services Commission
Tel: 306-787-5879
dean.murrison@gov.sk.ca
Chris Besko
Legal Counsel, Deputy Director
The Manitoba Securities Commission
Tel. 204-945-2561
Toll Free (Manitoba only) 1-800-655-5244
chris.besko@gov.mb.ca
Katharine Tummon
Superintendent of Securities
Prince Edward Island Securities Office
Tel: 902-368-4542
kptummon@gov.pe.ca
Brian W. Murphy
Deputy Director, Capital Markets
Nova Scotia Securities Commission
Tel: 902-424-4592
murphybw@gov.ns.ca
Ella-Jane Loomis
Legal Counsel
New Brunswick Securities Commission
Tel: 506-643-7857
ella-jane.loomis@nbsc-cvmnb.ca
Donn MacDougall
Deputy Superintendent, Legal & Enforcement
Office of the Superintendent of Securities
Government of the Northwest Territories
Tel: 867-920-8984
donald_macdougall@gov.nt.ca
Helena Hrubesova
Securities Officer
Securities Office, Corporate Affairs (C-6)
Government of Yukon
Tel: 867-667-5466
helena.hrubesova@gov.yk.ca
Louis Arki, Director, Legal Registries
Department of Justice, Government of Nunavut
Tel: 867-975-6587
larki@gov.nu.ca
This information has been taken from website "Securities"