Securities Law & Instruments

 



ONTARIO SECURITIES COMMISSION RULE 31-503

LIMITED MARKET DEALERS


PART 1 DEFINITIONS

1.1 In this Rule "registration requirement" means the requirement in securities legislation that prohibits a person or company from trading in a security or actingas an underwriter or an adviser unless the person or company is registered in the appropriate category of registration under securities legislation.

PART 2 REGISTRATION OF LIMITED MARKET DEALER

2.1 Restricted Trading Activities - A limited market dealer may act as a market intermediary for the purpose of trades for which the exemptions from theregistration requirement are not available because of subsection 206(1) of the Regulation.

2.2 Financial Intermediary - A financial intermediary shall not be registered as a limited market dealer.

2.3 Conditions of Registration

(1) A limited market dealer is subject to the conditions of registration applicable to an investment dealer under Ontario securities law, excluding the conditions insections 107 to 113, 116 to 118, 120, 121 and 123 and subsection 124(6) of the Regulation and Part 1 of Rule 31-504 Applications for Registration.

(2) A salesperson, officer, partner or director of a limited market dealer is subject to the requirements applicable to a salesperson, officer, partner or director,respectively, of an investment dealer under Ontario securities law excluding the requirements of sections 107 to 113, 116 to 118, 120, 121 and 123 andsubsections 124(1), 124(3) and 124(6) of the Regulation and Part 1 of Rule 31-504 Applications for Registration.

(3) A limited market dealer and a registered salesperson, officer and partner of a limited market dealer shall segregate in a trust account customers' subscriptionsor prepayments held pending investment.

(4) Neither a limited market dealer nor a registered salesperson, officer or partner of a limited market dealer shall commingle with such person's assets,customers' subscriptions or prepayments held pending investment.

PART 3 EXEMPTION FROM FINANCIAL STATEMENT FILINGS

3.1 Exemption from Financial Statement Filings - An application under section 147 of the Act for an exemption from the requirement that registrants fileannual audited financial statements may consist of the following sentence if the application is made before or concurrently with the filing of an application forregistration or renewal of registration as a limited market dealer and if the applicant is not registered, and is not seeking registration, in any other category ofregistration:

"[name of applicant] applies for an exemption from the requirement of the Act for registrants to file annual audited financial statements, such exemption toterminate if and when the applicant becomes a registrant in any category in addition to the applicant's registration as a limited market dealer, other than as asecurities adviser."

3.2 Order Granting Exemption - The issuance by the Director of a certificate of registration or renewal of registration for a limited market dealer is evidenceof the approval of the application made under section 3.1, if the applicant has complied with that section, unless the exemption request is denied in writing by theDirector.

3.3 Fees - There shall be no fees payable for the application described in section 3.1.

PART 4 EXEMPTION

4.1 Exemption - The Director may grant an exemption to this Rule, in whole or in part, subject to such conditions or restrictions as may be imposed in theexemption.