Securities Law & Instruments

 



NOTICE OF RULE UNDER THE SECURITIES ACT RULE 31-502

PROFICIENCY REQUIREMENTS FOR REGISTRANTS AND COMPANION POLICY
31-502CP, AND REVOCATION OF REGULATIONS

Notice of Rule and Companion Policy

The Commission has, under section 143 of the Securities Act (the "Act"), made Rule 31-502 Proficiency Requirements for Registrants (the "Rule").

The Rule and the material required by the Act to be delivered to the Minister of Financewere delivered on October 9, 1998. If the Minister does not approve the Rule, reject theRule or return it to the Commission for further consideration, the Rule will come into forceon December 23, 1998. If the Minister approves the Rule, the Rule will come into force 15days after it is approved.

The Rule was published for comment on three occasions.

The Companion Policy is effective on October 9, 1998.

Substance and Purpose of Rule and Companion Policy

The substance and purpose of the Rule are to update, amplify and consolidate theproficiency requirements for registrants and codify certain related administrative practicesof Staff for various categories of registration. The Rule updates the proficiencyrequirements for dealers and advisers currently set out in sections 124 and 125 of theRegulation by codifying Staff administrative practice of accepting certain alternativecourses. The Rule also adopts several of the proficiency requirements imposed by theTSE and Investment Dealers Association of Canada (the "IDA") and applies these higherstandards to securities dealers. The Rule establishes proficiency requirements for officersand partners of portfolio managers generally so as to avoid the need to register them asboth a portfolio manager and an investment counsel in order to rely on subsection 101(2)of the Regulation. The Rule also incorporates the proficiency requirements for "associate"officers and partners of portfolio managers and investment counsel, mutual fund dealerstrading in LSIF securities and salespersons of scholarship plan dealers.

The Rule changes the time limit during which proficiency will be considered to beacceptable even though the applicant has either not been in the industry recently or hassatisfied the proficiency requirements sometime in the past. The Rule requires that theapplicant must have been registered sometime within the three years prior to theapplication date.

The Rule reduces the current proficiency requirements for securities advisers on the basisthat Staff practice has been to provide exemptions to these proficiency requirements ona fairly consistent basis.

The substance and purpose of the Companion Policy are to provide guidance as to factorsthe Director will consider on exemption applications.

Summary of Rule and Companion Policy

The Rule is divided into four parts. Part 1 of the Rule contains defined terms for the Ruleand an interpretive section regarding the time limit for the completion of courses andprevious registrations set out in Parts 2 and 3 of the Rule.

Part 2 of the Rule sets out the proficiency requirements for dealers, their salespersons,partners, officers, compliance officers and branch managers. This Part also includes asection setting out the proficiency requirements for trading in LSIF securities by mutualfund dealers and their salespersons.

Part 3 of the Rule sets out the proficiency requirements for advisers and their partners,officers, compliance officers and branch managers. This Part also includes a sectionsetting out the proficiency requirements for associate partners and officers of investmentcounsel and portfolio managers.

Part 4 of the Rule contains the general exemption provision.

The Companion Policy provides guidance as to factors the Director will consider onexemption applications.

Summary of Written Comments Received by the Commission

The Commission received two comments on the third publication of the Rule from theAssociation for Investment Management and Research and from Sceptre InvestmentCounsel Limited. Both commentators supported the Rule. However, one commentatorexpressed concerns about the proficiency requirements imposed on officers of advisers.The Commission has not revised the Rule to create lesser proficiency requirements forofficers as there is the opportunity to seek exemptions on a case by case basis foradvising officers who do not meet the proficiency requirements and because no proficiencyrequirements are prescribed for non-advising officers.

The Commission did not receive any comments on the Companion Policy.

Regulations to be Revoked

Subsections 101(2) and sections 124, 125, 126 and section 236 of the Regulation will berevoked by the Commission.

The Commission will revoke certain definitions in section 96 of the Regulation and thedefinition of Labour Sponsored Investment Fund Course in section 234 of the Regulationon the basis that the definitions will be replaced by definitions in the Rule.

Finally, the Commission will amend subsection 130(1) of the Regulation to remove theinconsistency between subsection 130(1) of the Regulation and subsection 2.1(1) of theRule regarding the duration of certain renewals of registration. Subsection 2.1(2) of theRule provides that in certain circumstances, a registration will be suspended 30 monthsfrom the date the registration was granted, despite any renewals in the interim.

Each of the changes to the Regulation will be effective on the day the Rule comes intoforce.

The Rule entitled "In the Matter of Trading in Securities of Labour Sponsored InvestmentFund Corporations" (1994), 17 OSCB 5055 expires on the date the Rule comes into force.

Text of Rule and Companion Policy

The text of the Rule and Companion Policy follow.

DATED: October 9, 1998.


 

ONTARIO SECURITIES COMMISSION RULE 31-502
PROFICIENCY REQUIREMENTS FOR REGISTRANTS

 

TABLE OF CONTENTS

PART 1 DEFINITIONS AND INTERPRETATION 1
1.1 Definitions 1
1.2 Time Limits on Completion of Courses and PreviousRegistrations 3

PART 2 PROFICIENCY REQUIREMENTS FOR DEALERS
2.1 Salespersons of Brokers, Investment Dealers andSecurities Dealers 4
2.2 Salespersons of Mutual Fund Dealers 5
2.3 Salespersons of Scholarship Plan Dealers 6
2.4 Brokers, Investment Dealers, Securities Dealers andtheir Partners, Officers, Branch Managers andCompliance Officers 6
2.5 Mutual Fund Dealers and their Partners, Officers,Branch Managers and Compliance Officers 8
2.6 Trading in LSIF Securities by Mutual Fund Dealers 9

PART 3 PROFICIENCY REQUIREMENTS FOR ADVISERS
3.1 Securities Advisers and their Partners, Officers, BranchManagers and Compliance Officers 10
3.2 Investment Counsel and Portfolio Managers and theirPartners, Officers, Branch Managers and ComplianceOfficers 11

PART 4 EXEMPTION
4.1 Exemption 14

 

 

ONTARIO SECURITIES COMMISSION RULE 31-502
PROFICIENCY REQUIREMENTS FOR REGISTRANTS

PART 1 DEFINITIONS AND INTERPRETATION

1.1 Definitions - In this Rule

"Branch Compliance Officer Course" means the course prepared andconducted by the Institute of Canadian Bankers and so named on theeffective date and every successor to that course that does not narrow thescope of the significant subject matter of the course;

"Canadian Branch Managers Qualifying Examination" means theexamination prepared and conducted by the Canadian Securities Instituteand so named on the effective date, every predecessor to that examinationand every successor to that examination that does not narrow the scope ofthe significant subject matter of the examination;

"Canadian Investment Funds Course" means the course prepared andconducted by the Education Division of The Investment Funds Institute ofCanada and so named on the effective date, every predecessor to thatcourse and every successor to that course that does not narrow the scopeof the significant subject matter of the course;

"Canadian Investment Management Program" means the program preparedand conducted by the Canadian Securities Institute and so named on theeffective date, every predecessor to that program and every successor tothat program that does not narrow the scope of the significant subject matterof the program;

"Canadian Securities Course" means the course prepared and conducted bythe Canadian Securities Institute and so named on the effective date, everypredecessor to that course and every successor to that course that does notnarrow the scope of the significant subject matter of the course;

"Chartered Financial Analyst Examination Program" means the programprepared and conducted by the Association for Investment Management andResearch and so named on the effective date, every predecessor to thatprogram and every successor to that program that does not narrow thescope of the significant subject matter of the program;

"Conduct and Practices Course" means the course prepared and conductedby the Canadian Securities Institute and so named on the effective date,every predecessor to that course and every successor to that course thatdoes not narrow the scope of the significant subject matter of the course;

"effective date" means the date on which this Rule comes into force;

"Investment Funds in Canada Course" means the course prepared andconducted by the Institute of Canadian Bankers and so named on theeffective date, every predecessor to that course and every successor to thatcourse that does not narrow the scope of the significant subject matter of thecourse;

"LSIF course" means a course designated by the Commission as an LSIFcourse that provides instruction about LSIFs and their securities that isrelevant to a person engaged in trading in the securities of LSIFs;

"Mutual Fund Branch Managers' Course" means the course prepared andconducted by the Education Division of The Investment Funds Institute ofCanada and named the "Branch Managers' Course" on the effective date,every predecessor to that course and every successor to that course thatdoes not narrow the scope of the significant subject matter of the course;

"Mutual Fund Officers', Partners' and Directors' Course" means the courseprepared and conducted by the Education Division of The Investment FundsInstitute of Canada and named the "Officers', Partners' and Directors'Course" on the effective date, every predecessor to that course and everysuccessor to that course that does not narrow the scope of the significantsubject matter of the course;

"New Entrants Examination" means an examination prepared and conductedby the Canadian Securities Institute for new entrants to the securitiesindustry and so named on the effective date, every predecessor to thatexamination and every successor to that examination that does not narrowthe scope of the significant subject matter of the examination;

"Partners', Directors' and Senior Officers' Qualifying Examination" means theexamination prepared and conducted by the Canadian Securities Instituteand so named on the effective date, every predecessor to that examinationand every successor to that examination that does not narrow the scope ofthe significant subject matter of the examination;

"Professional Financial Planning Course" means the course prepared andconducted by the Canadian Securities Institute and so named on theeffective date and every predecessor to that course and every successor tothat course that does not narrow the scope of the significant subject matterof the course;

"restricted representative" means a salesperson, partner or officer of abroker, investment dealer or securities dealer whose registration is restrictedto

(a) the sale of mutual fund securities, or

(b) accepting unsolicited trade orders from client's provided noadvice is provided to clients on the trade order;

"scholarship plan dealers' course" means a course designated by theCommission as a scholarship plan dealers' course that provides instructionabout scholarship plans and their securities that is relevant to a personengaged in trading in the securities of scholarship plans; and

"U.S. Series 7 Examination" means the examination prepared and conductedby securities regulators in the United States of America and so named on theeffective date and every predecessor to that examination and everysuccessor to that examination that does not narrow the scope of thesignificant subject matter of the examination.

1.2 Time Limits on Completion of Courses and Previous Registrations

(1) For the purposes of satisfying Parts 2 and 3, except subsection2.1(2), an applicant for registration or reinstatement of registrationmust have completed a specified course or examination not morethan five years before the date of the applicant's application forregistration or reinstatement of registration, or have been previouslyregistered in the relevant category at any time during the three yearperiod immediately before the date of the applicant's application forregistration or reinstatement of registration.

(2) Despite subsection (1), if a person or company completes, within thefive-year period referred to in subsection (1), a specified course orexamination for which another specified course or examination is aprerequisite, the specified course or examination that is theprerequisite need not have been completed during the five-yearperiod.

PART 2 PROFICIENCY REQUIREMENTS FOR DEALERS

2.1 Salespersons of Brokers, Investment Dealers and Securities Dealers

(1) Except as provided in Ontario securities law, an individual shall notbe granted registration as a salesperson of a broker, investmentdealer or securities dealer unless the individual has

(a) been granted registration previously as a salesperson, partneror officer of a broker or investment dealer or as a broker orinvestment dealer;

(b) been granted registration after the effective date as asalesperson, partner or officer of a securities dealer or as asecurities dealer;

(c) completed either

(i) each of

(A) the Canadian Securities Course, and

(B) the Conduct and Practices Course or thePartners', Directors' and Senior Officers'Qualifying Examination; or

(ii) the New Entrants Examination and the U.S. Series 7Examination; or

(d) been granted registration as such by his or her principalregulator, as that term is defined in National Instrument 31-101National Registration System, and that registration has notbeen suspended or terminated.

(2) A registration as a salesperson of a broker, investment dealer orsecurities dealer granted after the effective date is suspended thirtymonths after the date the registration was granted, despite anyrenewals in the interim, unless the salesperson has

(a) completed the Professional Financial Planning Course or thefirst course of the Canadian Investment Management Programbefore the registration was granted; or

(b) before the end of the thirty month period

(i) completed the Professional Financial Planning Courseor the first course of the Canadian InvestmentManagement Program, and

(ii) delivered a notice to the Director disclosing thecompletion of the proficiency in the form required byOntario securities law for changes to registrationinformation.

(3) Despite subsection (1), an individual that does not meet therequirements for registration set out in that subsection may begranted registration as a salesperson of a broker, investment dealeror securities dealer if

(a) the registration is restricted to the sale of mutual fundsecurities; and

(b) the individual has

(i) been granted registration previously as a salesperson,partner or officer of a mutual fund dealer or as a mutualfund dealer, or

(ii) completed any one of the Canadian Securities Course,the Canadian Investment Funds Course or theInvestment Funds in Canada Course.

(4) Subsection (2) does not apply to a restricted representative.

2.2 Salespersons of Mutual Fund Dealers - An individual shall not be grantedregistration as a salesperson of a mutual fund dealer unless the individualhas

(a) been granted registration previously as a salesperson, partner orofficer of a broker, investment dealer, securities dealer or mutual funddealer or as a broker, investment dealer, securities dealer or mutualfund dealer; or

(b) completed any one of the Canadian Securities Course, the CanadianInvestment Funds Course or the Investment Funds in CanadaCourse.

2.3 Salespersons of Scholarship Plan Dealers - An individual shall not begranted registration as a salesperson of a scholarship plan dealer unless theindividual has

(a) been granted registration previously as a salesperson of ascholarship plan dealer; or

(b) completed a scholarship plan dealers' course.

2.4 Brokers, Investment Dealers, Securities Dealers and their Partners,Officers, Branch Managers and Compliance Officers

(1) An individual shall not be granted registration as a broker, investmentdealer or securities dealer or as a partner or officer of a broker,investment dealer or securities dealer or designated as thecompliance officer under section 1.3 of Rule 31-505 Conditions ofRegistration unless the individual has

(a) been granted registration previously as a partner or officer ofa broker or investment dealer or as a broker or investmentdealer;

(b) been granted registration after the effective date as a partneror officer of a securities dealer or as a securities dealer;

(c) completed the Partners', Directors' and Senior Officers'Qualifying Examination and

(i) the Canadian Securities Course, or

(ii) the New Entrants Examination and the U.S. Series 7Examination; or

(d) been granted registration as such by his or her principalregulator, as that term is defined in National Instrument 31-101National Registration System, and that registration has notbeen suspended or terminated.

(2) An individual shall not be designated as a branch manager undersection 1.4 of Rule 31-505 Conditions of Registration by a broker,investment dealer or securities dealer unless the individual hascompleted

(a) the Canadian Securities Course and the Canadian BranchManagers Qualifying Examination; and

(b) either the Conduct and Practices Course or the Partners',Directors' and Senior Officers' Qualifying Examination.

(3) Despite subsection (2), an individual that does not meet therequirements of subsection (2) for designation as a branch managerunder section 1.4 of Rule 31-505 Conditions of Registration may beso designated if the individual meets the requirements set forth insubsection 2.5(2) and if the designation is restricted to being abranch manager for the purpose of

(a) opening new accounts by salespersons whose registration isrestricted to the sale of mutual fund securities;

(b) supervising trades made for or with clients by salespersonswhose registration is restricted to the sale of mutual fundsecurities; and

(c) supervising advice provided to clients by salespersons whoseregistration is restricted to the sale of mutual fund securities.

(4) Despite subsection (2), an individual that does not meet therequirements of subsection (2) for registration as a partner or officerof a broker, investment dealer or securities dealer may be soregistered if

(a) the individual meets the criteria set forth in subsection 2.5(1);and

(b) the individual's registration is restricted to the sale of mutualfund securities.

(5) Despite paragraph (2)(a), an individual that is designated as branchmanager on the effective date may continue to be so designated untila date that is thirty months after the effective date withoutsuccessfully completing the Canadian Securities Course and theCanadian Branch Managers Qualifying Examination.

2.5 Mutual Fund Dealers and their Partners, Officers, Branch Managers andCompliance Officers

(1) An individual shall not be granted registration as a mutual fund dealeror as a partner or officer of a mutual fund dealer or designated as thecompliance officer under section 1.3 of Rule 31-505 Conditions ofRegistration by a mutual fund dealer unless the individual has

(a) been granted registration previously as a partner or officer ofa broker, investment dealer, securities dealer or mutual funddealer or as a broker, investment dealer, securities dealer ormutual fund dealer; or

(b) completed

(i) any one of the Canadian Securities Course, theCanadian Investment Funds Course or the InvestmentFunds in Canada Course, and

(ii) either the Partners', Directors' and Senior Officers'Qualifying Examination or the Mutual Fund Officers',Partners' and Directors' Course.

(2) An individual shall not be designated as a branch manager undersection 1.4 of Rule 31-505 Conditions of Registration by a mutualfund dealer unless the individual has

(a) been granted registration previously as a partner or officer ofa broker, investment dealer, securities dealer or mutual funddealer or as a broker, investment dealer, securities dealer ormutual fund dealer; or

(b) completed

(i) any one of the Canadian Securities Course, theCanadian Investment Funds Course or the InvestmentFunds in Canada Course, and

(ii) any one of the Canadian Branch Managers QualifyingExamination, the Mutual Fund Branch Managers'Course or the Branch Compliance Officer Course.

2.6 Trading in LSIF Securities by Mutual Fund Dealers

(1) A mutual fund dealer shall not trade in the securities of an LSIFunless

(a) the trade is made through one of its registered salespersons,partners or officers who satisfies the proficiency requirementsin subsection (2);

(b) the mutual fund dealer has delivered a notice to the Directorstating the names of each of its registered salespersons,partners and officers who will be trading in the securities of anLSIF and the date on which the applicable course referred toin subsection (2) was completed by each individual; and

(c) on renewal of registration, the mutual fund dealer delivers anotice to the Director stating the names of each of itsregistered salespersons, partners and officers who will betrading in the securities of an LSIF and the date on which theapplicable course was completed by each individual.

(2) A registered salesperson, partner or officer of a mutual fund dealershall not trade in the securities of an LSIF on behalf of a mutual funddealer unless the salesperson, partner or officer has completed

(a) an LSIF course;

(b) the Canadian Securities Course on or after October 25, 1993;or

(c) the Canadian Securities Course before October 25, 1993 andhas been registered and employed as a registrant at any timeduring the three year period immediately before the trade.

PART 3 PROFICIENCY REQUIREMENTS FOR ADVISERS

3.1 Securities Advisers and their Partners, Officers, Branch Managers andCompliance Officers

(1) An individual shall not be granted registration as a securities adviseror a partner or officer of a securities adviser unless

(a) the individual has been granted registration previously as apartner or officer or an associate partner or officer of asecurities adviser, investment counsel or portfolio manager oras a securities adviser, investment counsel or portfoliomanager;

(b) the individual has

(i) completed the Canadian Investment ManagementProgram or the first year of the Canadian FinancialAnalyst Examination Program, and

(ii) established that the individual performed researchinvolving the financial analysis of investments for atleast two years under the supervision of a registeredadviser; or

(c) the individual has been granted registration as such by his orher principal regulator, as that term is defined in NationalInstrument 31-101 National Registration System, and thatregistration has not been suspended or terminated.

(2) An individual shall not be designated by a securities adviser as thecompliance officer under section 1.3 of Rule 31-505 Conditions ofRegistration or as a branch manager under section 1.4 of Rule 31-505 Conditions of Registration unless the individual has been grantedregistration previously as a partner or officer of a securities adviser,investment counsel or portfolio manager.

3.2 Investment Counsel and Portfolio Managers and their Partners,Officers, Branch Managers and Compliance Officers

(1) An individual shall not be granted registration as an investmentcounsel or portfolio manager or as a partner or officer of aninvestment counsel or portfolio manager unless the individual

(a) has been granted registration previously as a partner or officerof an investment counsel or portfolio manager or as aninvestment counsel or portfolio manager, other than in relianceon section 3.3 or under a registration subject to terms andconditions requiring the individual's advising activities to besupervised;

(b) has

(i) completed either

(A) the Canadian Investment Management Programand the first year of the Chartered FinancialAnalysts Examination Program; or

(B) the Chartered Financial Analyst ExaminationProgram, and

(ii) established that the individual has been employed forfive years performing research involving the financialanalysis of investments, and that three of the five yearshave been under the supervision of a registered adviserhaving the responsibility on a discretionary basis for themanagement or supervision of investment portfolioshaving an aggregate value of not less than $5,000,000;

(c) has established that

(i) the individual has

(A) had three years experience as an associatepartner or officer of an investment counsel orportfolio manager;

(B) had three years experience as a registeredsalesperson of a broker, investment dealer orsecurities dealer and two years experience asan associate partner or officer of an investmentcounsel or portfolio manager;

(C) had three years experience as a researchanalyst for a broker or investment dealer and twoyears experience as an associate partner orofficer of an investment counsel or portfoliomanger; or

(D) been responsible for the management orsupervision of investment portfolios on adiscretionary basis having an aggregate value ofnot less than $5,000,000 for a period of fiveyears while employed by a Canadian financialinstitution or a pension fund; and

(ii) the individual has, at the time ofapplication for registration, and has hadfor a period of one year prior to the timeof application, under his or her directadministration on a discretionary basisinvestment portfolios having anaggregate value of not less than$5,000,000; or

(d) has been granted registration as such by his or herprincipal regulator, as that term is defined in NationalInstrument 31-101 National Registration System, andthat registration has not been suspended or terminated.

(2) An individual shall not be designated by an investment counsel orportfolio manager as the compliance officer under section 1.3 of Rule31-505 Conditions of Registration or as a branch manager undersection 1.4 of Rule 31-505 Conditions of Registration unless theindividual has been granted registration previously as a partner orofficer of an investment counsel or portfolio manager, other than inreliance on section 3.3 or under a registration subject to terms andconditions requiring the individual's advising activities to besupervised, or as an investment counsel or portfolio manager.

3.3 Associate Partners and Officers of Investment Counsel and PortfolioManagers

(1) An individual may be granted registration as an associate partner orofficer of an investment counsel or portfolio manager if the individualhas

(a) completed

(i) Parts I and II of the Canadian Investment ManagementProgram and the first year of the Chartered FinancialAnalyst Examination Program, or

(ii) the Chartered Financial Analyst Examination Program;and

(b) been employed for

(i) two years performing research involving the financialanalysis of investments, or

(ii) two years as a registered salesperson of a broker,investment dealer or securities dealer.

(2) An individual who is registered as an associate partner or officer ofan investment counsel or portfolio manager shall not give adviceunless the advice has been approved by a designated registeredpartner or officer of the investment counsel or portfolio manager thatemploys the individual.

(3) An investment counsel or portfolio manager that employs anassociate partner or officer shall designate a partner or officer that isnot an associate partner or officer to approve advice given by anassociate partner or officer.

(4) The designated partner or officer described in subsection (3) shall beemployed at the same location as the associate partner or officerwhose advice must be approved.

PART 4 EXEMPTION

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


 

ONTARIO SECURITIES COMMISSION COMPANION POLICY 31-502CP
PROFICIENCY REQUIREMENTS FOR REGISTRANTS

PART 1 PROFICIENCY REQUIREMENTS FOR REGISTRANTS

1.1 Alternative Qualifications for LSIF Salespersons - The Director willconsider granting an exemption to section 2.6 of Rule 31-502 ProficiencyRequirements for Registrants (the "Rule") to any person or company if theDirector is satisfied that to do so would not be prejudicial to the publicinterest, having regard to the spirit and intent of the Community SmallBusiness Investment Funds Act.

1.2 Alternative Qualifications - The Director will consider granting anexemption to any of sections 2.1 to 2.5 and 3.1 to 3.3 of the Rule to anyperson or company if the Director is satisfied that the person or companyhas qualifications or experience that are equivalent to, or more appropriatein the circumstances than, the qualifications or experience required underthe section.

1.3 Supervision by Non-Registered Advisers - For the purposes ofestablishing experience that is equivalent to, or more appropriate in thecircumstances than, the experience under the supervision of a registeredadviser in paragraph 3.1(1)(b) and subparagraph 3.2(1)(b)(iii) of the Rule,the Director will consider experience under the supervision of

(a) an unregistered investment manager of a Canadian financialinstitution;

(b) an adviser that is registered in a jurisdiction other than Ontario or aforeign jurisdiction; or

(c) an adviser that is not required to be registered under the laws of thejurisdiction or foreign jurisdiction in which the adviser carries onbusiness.

 

ONTARIO SECURITIES COMMISSION STAFF NOTICE 31-702
ONTARIO SECURITIES COMMISSION DESIGNATION OF
COURSES UNDER RULE 31-502
PROFICIENCY REQUIREMENTS FOR REGISTRANTS

PART 1 INTERPRETATION

1.1 Interpretation - In this Designation, terms defined in Rule 31-502Proficiency Requirements for Registrants (the "Rule") have the respectivemeanings ascribed to them in that Rule.

PART 2 DESIGNATIONS

2.1 LSIF Courses

(1) The course, which, at the effective date of the Rule, is entitled"Labour Sponsored Investment Funds" and is prepared andconducted by the Investment Funds Institute of Canada and everysuccessor to that course that does not narrow the significant subjectmatter of the course, is designated by the Commission as an LSIFcourse under the Rule.

(2) The course entitled "Labour Sponsored Investment Funds" preparedand previously conducted by Steven G. Kelman and AssociatesLimited is designated by the Commission as an LSIF course underthe Rule.

2.2 Scholarship Plan Dealers' Courses - The scholarship plan dealers'courses prepared and conducted by each of Scholarship Consultants ofNorth America, C.S.T. Consultants Inc., Canadian American Financial Corp.(Canada) Limited, Education Fund Services Inc. and Global EducationalMarketing Corporation as they exist on the effective date, every predecessoror successor to one of those courses that does not narrow the scope of thesignificant subject matter of the course, are designated by the Commissionas scholarship plan dealers' courses under Rule 31-502 ProficiencyRequirements for Registrants.

PART 3 TERMINATION

3.1 Termination of Designation - If the Commission is of the view that it is inthe public interest to terminate any of the designations in section 2.1 or 2.2it may do so after giving the affected party the opportunity to be heard.