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 Rule31-502 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 June 22, 2000. If the Minister does not approve the Rule, reject theRule or return it to the Commission for further consideration, the Rule will come intoforce on September 5, 2000. If the Minister approves the Rule, the Rule will come intoforce 15 days after it is approved.

The Rule was published for comment on four occasions.

The Companion Policy is effective on September 5, 2000.

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 administrativepractices of Staff for various categories of registration. The Rule updates theproficiency requirements for dealers and advisers currently set out in section 124 of theRegulation by codifying Staff administrative practice of accepting certain alternativecourses.

The Rule also adopts several of the proficiency requirements imposed by the TorontoStock Exchange and Investment Dealers Association of Canada (the "IDA") and appliesthese higher standards to securities dealers.

The Rule establishes proficiency requirements for representatives, officers andpartners of portfolio managers.

The Rule also incorporates the proficiency requirements for "associate"representatives, officers and partners of portfolio managers and investment counsel,mutual fund dealers trading in labour sponsored investment funds ("LSIF") securitiesand 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 has satisfiedthe proficiency requirements sometime in the past.

The substance and purpose of the Companion Policy are to provide guidance as tofactors the 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 theRule and an interpretive section regarding the time limit for the completion of coursesand previous 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 theirrepresentatives, partners, officers, compliance officers and branch managers. ThisPart also includes a section setting out the proficiency requirements for associaterepresentatives, partners and officers of investment counsel 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.

Final Amendments

The Rule has been amended since its last publication for comment ((1999) 22 OSCB5739) as follows.

The Rule has been amended to provide that an individual who has obtained partner orofficer level registration or proficiency has sufficient proficiency to be designated as abranch manager.

The Part 2 of the Rule has been amended to provide that where individuals arerequired to take the Canadian Securities Course or the Conduct and Practices Coursethey may instead take the New Entrants Examination and the U.S. Series 7Examination. Previously this equivalency was only available to individuals of brokers,investment dealers and securities dealers.

Finally, the Rule has also been amended to add the term "representative" to Part 3 toreflect the amendment to subsection 25(1) of the Act which permits a person to beregistered as a representative of an adviser.

Related Instruments

The Rule is related to Companion Policy 31-502CP.

The Rule is related to Rule 31-504 Applications for Registration, which establishesrequirements relating to proof of satisfaction of proficiency requirements, and Rule 31-505 Conditions of Registration, which establishes the requirements for dealers andadvisers to designate compliance officers and branch managers.

The Rule is also related to Rule 91-502 Trades in Recognized Options, whichestablishes proficiency requirements for trading or advising in recognized options, asdefined in that rule.

The Rule is also related to proposed Rule 91-504 Over-The-Counter Derivatives, whichestablishes proficiency requirements for persons acting in certain transactions asrepresentatives of over-the-counter derivatives dealers, as defined in that rule.

Summary of Written Comments Received by the Commission

The Commission received three comments on the fourth publication of the Rule. Thecommentators were:

(a) Berkshire Securities Inc.;

(b) the Canadian Bankers Association; and

(c) the Investment Dealers Association.

Two commentators recommended that subsection 2.1(2), which requires salespeople ofcertain dealers to obtain additional proficiency within thirty months of their registration,should incorporate other proficiency standards including those of proposed MultilateralInstrument 33-107 Proficiency Requirements for Registrants Holding Themselves Outas Providing Financial Planning Advice ("MI 33-107").

The Commission is satisfied with the standard of the courses currently required undersubsection 2.1(2) and is not of the view that reviewing other courses for equivalency ismerited. The Commission will consider whether amendments to the Rule arenecessary once proposed MI 33-107 becomes final.

One commentator was of the view that the Rule should provide that subsection 2.1(2)should not apply to salespersons who deal only with non-retail clients. The Commissionis of the view that the proficiency requirements of subsection 2.1(2) should apply to allfull-service dealer salespeople except restricted representatives.

Regulations to be Revoked

Section 236 of the Regulation will be revoked on the basis that proficiencyrequirements for trading in LSIF securities will be replaced by the provisions of theRule.

The Commission will revoke section 124 of the Regulation as it will be replaced by theprovisions of the proposed Rule that update and consolidate the proficiencyrequirements related to certain dealer and adviser registrations.

The Commission will revoke section 126 of the Regulation on the basis that it will bereplaced by the provision in the proposed Rule that provides discretion to the Directorto grant exemptions to the Rule.

The Commission will also revoke definitions of courses in section 96 of the Regulationand the definition of Labour Sponsored Investment Fund Course in section 234 of theRegulation on the basis that the definitions will be replaced by definitions in the Rule.

Finally, the Commission will amend section 130 of the Regulation to remove theinconsistency between section 130 of the Regulation and subsection 2.1(2) of the Ruleregarding the duration of certain renewals of registration. Subsection 2.1(2) of the Ruleprovides that in certain circumstances, a registration will be suspended 30 months fromthe 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.

Text of Rule and Companion Policy

The text of the Rule and Companion Policy follow.

DATED: June 23, 2000.

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 and conductedby the Institute of Canadian Bankers and so named on the effective date andevery successor to that course that does not materially narrow the content of thesignificant subject matter of the course;

"Branch Managers Course" means the course prepared and conducted by theCanadian Securities Institute and so named on the effective date, everypredecessor to that course and every successor to that course that does notmaterially narrow the content of the significant subject matter of the course;

"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 that courseand every successor to that course that does not materially narrow the contentof the significant subject matter of the course;

"Canadian Investment Manager Program" means the program prepared andconducted by the Canadian Securities Institute and so named on the effectivedate, every predecessor to that program and every successor to that programthat does not materially narrow the content of the significant subject matter of theprogram;

"Canadian Securities Course" means the course prepared and conducted by theCanadian Securities Institute and so named on the effective date, everypredecessor to that course and every successor to that course that does notmaterially narrow the content 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 materially narrowthe content of the significant subject matter of the program;

"Conduct and Practices 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 notmaterially narrow the content 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 the effectivedate, every predecessor to that course and every successor to that course thatdoes not materially narrow the content of the significant subject matter of thecourse;

"LSIF course" means a course designated by the Commission as a laboursponsored investment funds course that provides instruction about laboursponsored investment funds and their securities that is relevant to a personengaged in trading in the securities of labour sponsored investment funds;

"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, everypredecessor to that course and every successor to that course that does notmaterially narrow the content 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" onthe effective date, every predecessor to that course and every successor to thatcourse that does not materially narrow the content of the significant subjectmatter of the course;

"New Entrants Examination" means an examination prepared and conducted bythe Canadian Securities Institute for new entrants to the securities industry andso named on the effective date, every predecessor to that examination andevery successor to that examination that does not materially narrow the contentof the significant subject matter of the examination;

"Options Supervisors Course" means the course prepared and conducted to theCanadian Securities Institute and so named on the effective date, everypredecessor to that course and every successor to that course that does notmaterially narrow the content of the significant subject matter of the course;

"Partners, Directors and Senior Officers Qualifying Examination" means theexamination prepared and conducted by the Canadian Securities Institute andso named on the effective date, every predecessor to that examination andevery successor to that examination that does not materially narrow the contentof the significant subject matter of the examination;

"Professional Financial Planning Course" means the course prepared andconducted by the Canadian Securities Institute and so named on the effectivedate and every predecessor to that course and every successor to that coursethat does not materially narrow the content of the significant subject matter of thecourse;

"restricted representative" means a salesperson of a broker, investment dealeror securities dealer whose registration is restricted to

(a) the sale of mutual fund securities, or

(b) accepting unsolicited trade orders from clients provided no adviceis 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 instruction aboutscholarship plans and their securities that is relevant to a person engaged intrading in the securities of scholarship plans; and

"U.S. Series 7 Examination" means the examination prepared and conducted bysecurities regulators in the United States of America and so named on theeffective date and every predecessor to that examination and every successor tothat examination that does not materially narrow the content of the significantsubject 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 subsection 2.1(2), anapplicant for registration or reinstatement of registration must havecompleted a specified course or examination not more than three yearsbefore the date of the applicant's application for registration orreinstatement of registration, or have been previously registered in therelevant category at any time during the three-year period immediatelybefore the date of the applicant's application for registration orreinstatement of registration.

(2) Despite subsection (1), if a person or company completes, within thethree-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 the prerequisiteneed not have been completed during the three-year period.

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 not begranted registration as a salesperson of a broker, investment dealer orsecurities dealer unless the individual has

(a) been granted registration previously as a salesperson, partner orofficer of a broker or investment dealer, other than as a restrictedrepresentative, or as a broker or investment dealer;

(b) been granted registration after the effective date as a salesperson,partner or officer of a securities dealer, other than as a restrictedrepresentative, or as a securities dealer;

(c) completed each of

(i) the Canadian Securities Course, and

(ii) the Conduct and Practices Course or the Partners, Directorsand Senior Officers Qualifying Examination; or

(d) been granted registration as such by his or her principal regulator,as that term is defined in National Instrument 31-101 MutualReliance Review System for Registration, and that registration hasnot been suspended or terminated.

(2) A registration as a salesperson of a broker, investment dealer orsecurities dealer granted after the effective date is suspended on the lastday of the thirtieth month after the date the registration was granted,despite any renewals in the interim, unless the salesperson has

(a) completed the Professional Financial Planning Course or the firstcourse of the Canadian Investment Management Program beforethe registration was granted; or

(b) before the end of the thirty-month period

(i) completed the Professional Financial Planning Course orthe first course of the Canadian Investment ManagementProgram, and

(ii) delivered a notice to the Director disclosing the completionof the proficiency in the form required by Ontario securitieslaw for changes to registration information.

(3) Despite subsection (1), an individual that does not meet the requirementsfor registration set out in that subsection may be granted registration as asalesperson of a broker, investment dealer or securities dealer if

(a) the registration is restricted to the sale of mutual fund securities;

(b) the individual has

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

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

(c) at the date the registration for the individual is granted, the broker,investment dealer or securities dealer that is sponsoring theapplication has registered with it not more than the lesser of

(i) 100 restricted representatives whose registration isrestricted to the sale of mutual funds; and

(ii) that number of restricted representatives whose registrationis restricted to the sale of mutual funds equal to 5% of thetotal number of representatives registered with the broker,investment dealer or securities dealer.

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

(5) Despite subsection (2), a registration as a salesperson of a broker,investment dealer or securities dealer that was a restricted registration issuspended on the last day of the thirtieth month after the date that therestrictions on the registration were removed, despite any renewals in theinterim, unless the salesperson has met the requirements of paragraph2(b).

(6) The registration of an individual as a salesperson under subsection (3)expires on the date that is 270 days after the date that registration wasgranted, despite any renewals in the interim, unless the salesperson hascompleted each of

(a) the Canadian Securities Course; and

(b) the Conduct and Practices Course or the Partners Directors andSenior Officers Qualifying Examination.

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

(a) been granted registration previously as a salesperson, partner or officerof a broker, investment dealer, securities dealer or mutual fund dealer oras a broker, investment dealer, securities dealer or mutual fund dealer; or

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

2.3 Salespersons of Scholarship Plan Dealers - An individual shall not be grantedregistration as a salesperson of a scholarship plan dealer unless the individualhas

(a) been granted registration previously as a salesperson of a scholarshipplan 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 be designated as the complianceofficer under section 1.3 of Rule 31-505 Conditions of Registration by abroker, investment dealer or securities dealer unless the individual has

(a) been granted registration previously as a partner or officer of abroker or investment dealer or as a broker or investment dealer;

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

(c) completed the Partners, Directors and Senior Officers QualifyingExamination and the Canadian Securities Course; or

(d) been granted registration as such by his or her principal regulator,as that term is defined in National Instrument 31-101 NationalRegistration System, and that registration has not been suspendedor terminated.

(2) An individual shall not be designated as a branch manager under section1.4 of Rule 31-505 Conditions of Registration by a broker, investmentdealer or securities dealer unless the individual has

 

(a) been granted registration previously as a partner or officer of abroker or investment dealer or as a broker or investment dealer;

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

(c) completed the Canadian Securities Course, and

(i) either

(A) the Partners, Directors and Senior Officers QualifyingExamination, or

(B) the Branch Managers Course and the Conduct andPractices Course, and

(ii) if the individual is responsible for supervising persons whotrade in options, the Options Supervisors Course.

(3) Despite paragraph (2)(c), an individual that is designated as branchmanager on the effective date may continue to be so designated until thelast day of the thirtieth month after the effective date without successfullycompleting the Canadian Securities Course or the Branch ManagersCourse.

 

(4) Despite paragraph (2)(c)(ii), an individual that is designated as branchmanager on the effective date may continue to be so designated withoutsuccessfully completing the Options Supervisors Course.

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 dealer oras 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 of abroker, investment dealer, securities dealer or mutual fund dealeror as a broker, investment dealer, securities dealer or mutual funddealer; or

(b) completed

(i) any one of the Canadian Securities Course, the CanadianInvestment Funds Course or the Investment Funds inCanada Course, and

(ii) either the Partners, Directors and Senior Officers QualifyingExamination or the Mutual Fund Officers, Partners andDirectors Course.

(2) An individual shall not be designated as a branch manager under section1.4 of Rule 31-505 Conditions of Registration by a mutual fund dealerunless the individual has

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

(b) completed

(i) any one of the Canadian Securities Course, the CanadianInvestment Funds Course or the Investment Funds inCanada Course, and

(ii) any one of the Branch Managers Course, the Mutual FundBranch Managers Course, the Branch Compliance OfficerCourse, the Partners, Directors and Senior OfficersQualifying Examination or the Mutual Fund Officers,Partners and Directors Course.

2.6 Trading in Labour Sponsored Investment Fund Securities by Mutual FundDealers

(1) A mutual fund dealer shall not trade in the securities of a laboursponsored investment fund unless

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

(b) the mutual fund dealer has delivered a notice to the Directorstating the names of each of its registered salespersons, partnersand officers who will be trading in the securities of a laboursponsored investment fund and the date on which the applicablecourse referred to in subsection (2) was completed by eachindividual; and

(c) within ninety days after the mutual fund dealer's financial year end,the mutual fund dealer delivers a notice to the Director stating thenames of each of its registered salespersons, partners and officerswho will be trading in the securities of a labour sponsoredinvestment fund and the date on which the applicable course wascompleted by each individual.

(2) A registered salesperson, partner or officer of a mutual fund dealer shallnot trade in the securities of a labour sponsored investment fund onbehalf of a mutual fund dealer unless the salesperson, partner or officerhas 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 and hasbeen registered and employed as a registrant at any time duringthe three year period immediately before the trade.

2.7 New Entrants Equivalency - In this Part, an individual may meet a requirementto complete the Canadian Securities Course or the Conduct and PracticesCourse by completion of the New Entrants Examination and the U.S. Series 7Examination.

 

PART 3 PROFICIENCY REQUIREMENTS FOR ADVISERS

3.1 Securities Advisers and their Representatives, Partners, Officers, BranchManagers and Compliance Officers

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

(a) the individual has been granted registration previously as arepresentative, partner or officer or an associate partner orassociate officer of a securities adviser, investment counsel orportfolio manager or as a securities adviser, investment counsel orportfolio manager;

(b) the individual has

(i) completed the Canadian Investment Manager Program orthe first year of the Canadian Financial Analyst ExaminationProgram, and

(ii) established that the individual performed research involvingthe financial analysis of investments for at least two yearsunder the supervision of a registered adviser; or

(c) the individual has been granted registration as such by his or herprincipal regulator, as that term is defined in National Instrument31-101 Mutual Reliance Review System for Registration, 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 31-505Conditions of Registration unless the individual has been grantedregistration previously as a representative, partner or officer of asecurities adviser, investment counsel or portfolio manager.

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

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

(a) has been granted registration previously as a representative,partner or officer of an investment counsel or portfolio manager oras 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;

(b) has

(i) completed either

(A) the Canadian Investment Manager Program and thefirst year of the Chartered Financial AnalystsExamination Program; or

(B) the Chartered Financial Analyst ExaminationProgram, and

(ii) established that the individual has been employed for fiveyears performing research involving the financial analysis ofinvestments, and that three of the five years have beenunder the supervision of a registered adviser having theresponsibility on a discretionary basis for the managementor supervision of investment portfolios having an aggregatevalue of not less than $5,000,000;

(c) has established that

(i) the individual has

(A) had three years experience as an associaterepresentative, associate partner or associateofficer of an investment counsel or portfoliomanager;

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

(C) had three years experience as a researchanalyst for a broker or investment dealer andtwo years experience as an associaterepresentative, associate partner or associateofficer of an investment counsel or portfoliomanger; or

(D) been responsible for the management orsupervision of investment portfolios on adiscretionary basis having an aggregate valueof not 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 of application forregistration, and has had for a period of one yearprior to the time of application, under his or her directadministration on a discretionary basis investmentportfolios having an aggregate value of not less than$5,000,000; or

(d) has been granted registration as such by his or her principalregulator, as that term is defined in National Instrument 31-101Mutual Reliance Review System for Registration, and thatregistration 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 Rule 31-505 Conditions of Registration or as a branch manager under section 1.4of Rule 31-505 Conditions of Registration unless the individual has beengranted registration previously as a representative, partner or officer of aninvestment counsel or portfolio manager, other than in reliance on section3.3 or under a registration subject to terms and conditions requiring theindividual's advising activities to be supervised, or as an investmentcounsel or portfolio manager.

3.3 Associate Representatives, Associate Partners and Associate Officers ofInvestment Counsel and Portfolio Managers

(1) An individual may be granted registration as an associate representative,associate partner or associate officer of an investment counsel or portfoliomanager if the individual has

(a) completed

(i) the Canadian Investment Manager Program and the firstyear of the Chartered Financial Analyst ExaminationProgram, 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 representative, associatepartner or associate officer of an investment counsel or portfolio managershall not give advice unless the advice has been approved by adesignated registered representative, partner or officer of the investmentcounsel or portfolio manager that employs the individual.

(3) An investment counsel or portfolio manager that employs an associaterepresentative, associate partner or associate officer shall designate arepresentative, partner or officer that is not an associate representative,associate partner or associate officer to approve advice given by anassociate representative, associate partner or associate officer.

(4) The designated representative, partner or officer described in subsection(3) shall be employed at the same location as the associaterepresentative, associate partner or associate officer whose advice mustbe approved.

PART 4 EXEMPTION

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

ONTARIO SECURITIES COMMISSION RULE 31-502

 

 

PROFICIENCY REQUIREMENTS FOR REGISTRANTS

 

 

TABLE OF CONTENTS

 

PART 1 DEFINITIONS AND INTERPRETATION

1.1 Definitions

1.2 Time Limits on Completion of Courses and Previous

Registrations

PART 2 PROFICIENCY REQUIREMENTS FOR DEALERS

2.1 Salespersons of Brokers, Investment Dealers and Securities Dealers

2.2 Salespersons of Mutual Fund Dealers

2.3 Salespersons of Scholarship Plan Dealers

2.4 Brokers, Investment Dealers, Securities Dealers

and their Partners, Officers, Branch Managers

and Compliance Officers

2.5 Mutual Fund Dealers and their Partners, Officers,

Branch Managers and Compliance Officers

2.6 Trading in Labour Sponsored Investment Fund Securities

by Mutual Fund Dealers

2.7 New Entrants Equivalency

PART 3 PROFICIENCY REQUIREMENTS FOR ADVISERS

3.1 Securities Advisers and their Representatives,

Partners, Officers, Branch Managers and

Compliance Officers

3.2 Investment Counsel and Portfolio Managers

and their Representatives, Partners, Officers,

Branch Managers and Compliance Officers

3.3 Associate Representatives, Associate Partners and

Associate Officers of Investment Counsel and

Portfolio Managers

PART 4 EXEMPTION

4.1 Exemption

 

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 will considergranting an exemption to section 2.6 of Rule 31-502 Proficiency Requirementsfor Registrants (the "Rule") to any person or company if the Director is satisfiedthat to do so would not be prejudicial to the public interest, having regard to thespirit and intent of the Community Small Business Investment Funds Act.

1.2 Alternative Qualifications - The Director will consider granting an exemption toany of sections 2.1 to 2.5 and 3.1 to 3.3 of the Rule to any person or company ifthe Director is satisfied that the person or company has qualifications orexperience that are equivalent to, or more appropriate in the circumstances than,the qualifications or experience required under the section.

1.3 Supervision by Non-Registered Advisers - For the purposes of establishingexperience that is equivalent to, or more appropriate in the circumstances than,the experience under the supervision of a registered adviser in subparagraph3.1(1)(b)(ii) and subparagraph 3.2(1)(b)(ii) of the Rule, the Director will consider,among other relevant factors, experience under the supervision of

(a) an unregistered investment manager of a Canadian financial institution;

(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 on business.

 

ONTARIO SECURITIES COMMISSION STAFF NOTICE 31-702 OF

 

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" prepared and conducted bythe Investment Funds Institute of Canada and every successor tothat course that does not narrow the significant subject matter ofthe course is designated by the Commission as an LSIF courseunder the Rule.

(2) The course, which, at the effective date of the Rule, is entitled"Labour Sponsored Investment Funds" prepared and previouslyconducted by Steven G. Kelman and Associates Limited("Kelman")(the "Kelman Course") is designated by the Commissionas an LSIF course under the Rule for registrants who completedthe course prior to December 1, 1998.

2.2 Scholarship Plan Dealers' Courses

(1) The scholarship plan dealers' courses prepared and conducted byeach of Scholarship Consultants of North America, C.S.T.Consultants Inc., Canadian American Financial Corp. (Canada)Limited, Global Educational Marketing Corporation and EducationFund Services Inc. as they exist on the effective date, everypredecessor of one of those courses and every successor to one ofthose courses that does not narrow the scope of the significantsubject matter of the course, are designated by the Commission asscholarship plan dealers' courses under Rule 31-502 ProficiencyRequirements for Registrants.

(2) If the Commission is of the view that it is in the public interest toterminate any of the designations in subsection (1), it may do soafter giving the affected party the opportunity to be heard.

The attached Regulation made by the Ontario Securities Commission under the

Securities Act on ............, 2000 is approved.

...............

Minister of Finance

Dated on ............, 2000.

CONFIDENTIAL P0673.e

Until filed with the 2-LAH

Registrar of Regulations

REGULATION TO AMEND

 

REGULATION 1015 OF THE REVISED REGULATIONS OF ONTARIO, 1990

 

MADE UNDER THE

 

SECURITIES ACT

 

Note: Since the end of 1998, Regulation 1015 has been amended by OntarioRegulations 1/99, 322/99, 3/00, 108/00, 133/00 and 222/00. Previousamendments are listed in the Table of Regulations in the Statutes ofOntario, 1998.

1. Section 96 Regulation 1015 of the Revised Regulations of Ontario,1990 is amended by striking out the following definitions:

1. "Canadian Investment Finance Course".

2. "Canadian Investment Funds Course".

3. "Canadian Securities Course".

4. "Chartered Financial Analysts Course".

5. "Partners', Directors' and Senior Officers' QualifyingExamination".

6. "Registered Representative Examination".

2. Section 124 of the Regulation is revoked.

3. Section 126 of the Regulation is revoked.

4. Subsection 130 (1) of the Regulation is amended by inserting after"subsections (2) and (2.1)" "and except as otherwise provided in OntarioSecurities Commission Rule 31-502 Proficiency Requirements forRegistrants".

5. The definition of "Labour Sponsored Investment Fund Course"insection 234 of the Regulation is revoked.

6. Section 236 of the Regulation is revoked.

7. This Regulation comes into force on the day the rule made by theOntario Securities Commission on June 20, 2000 entitled "OntarioSecurities Commission Rule 31-502 Proficiency Requirements forRegistrants" comes into force.

Ontario Securities Commission:

.................

Vice Chair

.................

John A. Geller

.................

Vice Chair

.................

Howard I. Wetston

Dated on ........................., 2000.

Note: The rule made by the Ontario Securities Commission on June 20, 2000entitled "Ontario Securities Commission Rule 31-502 ProficiencyRequirements for Registrants" comes into force on ................, 2000.