Scotia Securities Inc. and MFDA member firms registered as of the date of this decision

Decision

Headnote

The applicant and other MFDA members are temporarily exempted from the requirement in section 14.2(1) of National Instrument 31-103 Registration Requirements, Exemptions and Ongoing Registrant Obligations to provide relationship disclosure information.

IN THE MATTER OF

NATIONAL INSTRUMENT 31-103 REGISTRATION

REQUIREMENTS, EXEMPTIONS AND

ONGOING REGISTRANT OBLIGATIONS

AND

SCOTIA SECURITIES INC.

(the Lead Filer) AND

MFDA MEMBER FIRMS REGISTERED AS OF

THE DATE OF THIS DECISION

DECISION

Interpretation

1. Unless otherwise defined in this decision or the context otherwise requires, terms used in this decision that are defined in National Instrument 31-103 Registration Requirements, Exemptions and Ongoing Registrant Obligations (NI 31-103) or National Instrument 14-101 Definitions have the same meaning.

Background

2. Under section 14.2(1) [relationship disclosure information] of NI 31-103, a registered firm must deliver to a client all information that a reasonable investor would consider important about the client's relationship with the registrant.

3. The Mutual Fund Dealers Association of Canada (the MFDA) has adopted new member rules for relationship disclosure information (the MFDA RDI rules) finalizing a proposal (the MFDA RDI proposal) published on July 26, 2010 in MFDA Bulletin 0444-P -- Proposed amendments to MFDA Rule 2.2 (Client accounts), Policy No. 2 Minimum Standards for account supervision, Rule 2.8 (Client communications) and Rules 5.3 (Client reporting).

4. The purpose of the MFDA RDI rules is to set out detailed requirements to assist registered firms who are MFDA members to comply with the general principle in section 14.2(1) of NI 31-103.

5. Under section 16.14 of NI 31-103, temporary relief from the application of section 14.2(1) of NI 31-103 was available until September 28, 2010 to persons or companies that were registered on the date when NI 31-103 came into effect.

6. Under a decision granted to TD Investment Services Inc. on September 9, 2010, further temporary relief from the application of section 14.2(1) of NI 31-103 was made available to registered firms that were MFDA members on the date of the decision, expiring on the earlier of September 28, 2011 or the coming into force date of the MFDA RDI proposal.

7. The MFDA RDI rules will be implemented in phases over a transition period starting on September 28, 2011 and ending December 3, 2013.

Application

8. The Lead Filer has applied to the Director, under section 15.1 of NI 31-103, for exemptions for itself and each registered firm that is a member of the MFDA as of the date of this decision from paragraph 14.2(1) of NI 31-103, subject to the conditions and restrictions set out in this decision.

9. The Lead Filer represents that if it is required to comply with section 14.2(1) of NI 31-103 during the transition period leading to full implementation of the MFDA RDI rules, it will be required to prepare detailed relationship disclosure information and may incur significant costs changing its relationship disclosure communications when the MFDA RDI rules are fully implemented.

10. The Lead Filer further represents that since the MFDA RDI rules will be fully implemented by December 3, 2013, the cost that it will incur by having to comply with section 14.2(1) of NI 31-103 in the interim is not justified.

Decision

11. Section 14.2(1) of NI 31-103 does not apply to the Lead Filer or any registered firm that is a member of the MFDA as of the date of this decision, provided that, in each case, it complies with the MFDA RDI rules subject to applicable transition provisions set out in the MFDA RDI rules.

12. This decision comes into effect on September 28, 2011 and expires on December 31, 2013.

September 20, 2011

"Erez Blumberger"
Deputy Director
Compliance and Registrant Regulation