Archived Notices, Instruments, Rules and Policies

THE SECURITIES ACT ) Order No. 6219 ) Section 20(1) and National Instrument 31-103 ) Registration Requirements and Exemptions ) November 5, 2010 Relief from the requirement under paragraph 13.2(2)(b) of NI 31-103 to establish whether a client is an insider Blanket Order No. 31-511 WHEREAS Interpretation 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 and Exemptions (NI 31-103) or National Instrument 14-101 Definitions have the same meaning in this order. Background 1. Paragraph 13.2(2)(b) of NI 31-103 requires registrants to take reasonable steps to establish whether their clients are insiders of reporting issuers or of any other issuers whose securities are publicly traded. 2. Since it is rare for a trade in securities listed in paragraphs 7.1(2)(b) or 7.1(2)(c) of NI 31-103 to give rise to insider trading concerns, the benefit of requiring compliance with paragraph 13.2(2)(b) of NI 31-103 is not justified by its costs when trading in securities listed in these paragraphs. The Commission is of the opinion that it would not be prejudicial to the public interest to make the order requested. IT IS ORDERED: 1. THAT under s. 20(1) of The Securities Act, R.S.M. 1988, c. S50, a registrant is exempt from paragraph 13.2(2)(b) of NI 31-103 in respect of a client so long as the registrant only trades securities for that client that are listed in paragraphs 7.1(2)(b) and 7.1(2)(c) of NI 31- 103. 2. Order Number 6076 made on February 26, 2010 is hereby revoked. 3. This order comes into effect on November 5, 2010. BY ORDER OF THE COMMISSION “Chris Besko Deputy Director

CSA Staff Notice 31-321 Further Omnibus / Blanket Orders Exempting Registrants from Certain Provisions of National Instrument 31-103 Registration Requirements and Exemptions November 5, 2010 Since the coming into force of National Instrument 31-103 Registration Requirements and Exemptions (NI 31-103), the Canadian Securities Administrators (the CSA or we) have received requests for relief from certain provisions of NI 31-103. The CSA is in the process of considering certain amendments to NI 31-103 and these provisions will be reconsidered in the course of the amendments process. In the interim, each of the CSA members has issued parallel orders (the “orders”) that provide relief:  from the requirement under section 13.2(2)(b) of NI 31-103 to establish whether a client is an insider in respect of trades of securities listed in section 7.1(2)(b) or (c) of NI 31- 103; and  from the requirement under section 13.2(3)(b)(i) of NI 31-103 to establish the identity of any individual who owns or controls more than 10% of the voting rights attached to the voting securities of a corporation that is a client of a mutual fund dealer. This Notice summarizes the orders. We are publishing the orders with this Notice. The orders are also available on websites of CSA members, including: www.lautorite.qc.ca www.albertasecurities.com www.bcsc.bc.ca www.msc.gov.mb.ca www.gov.ns.ca/nssc www.nbsc-cvmnb.ca www.osc.gov.on.ca www.sfsc.gov.sk.ca 1. Blanket Order 31-511 – Relief from the requirement under section 13.2(2)(b) of NI 31- 103 to establish whether a client is an insider Section 13.2(2)(b) of NI 31-103 provides that a registrant must take reasonable steps to establish whether a client is an insider of a reporting issuer or any other issuer whose securities are publicly traded. On February 26, 2010, each regulator issued an order that exempts a mutual fund dealer from section 13.2(2)(b). This order is revoked and replaced by parallel orders issued by the CSA which will take effect on November 5, 2010.

2 Considering that it is unlikely for a trade in securities listed in sections 7.1(2)(b) or 7.1(2)(c) of NI 31-103 to give rise to insider trading concerns, the new order provides that section 13.2(2)(b) does not apply to a registrant in respect of a client so long as the registrant only trades securities for that client that are listed in those sections. The securities listed in sections 7.1(2)(b) and 7.1(2)(c) of NI 31-103 are the following:  mutual funds;  except in Québec, investment funds that are labour-sponsored investment fund corporations or labour-sponsored venture capital corporations under legislation of a jurisdiction of Canada; and  securities of a scholarship plan, an educational plan or an educational trust. We remind registrants that they remain subject to the requirement in section 13.2(2)(b) when they trade any other securities than those listed in sections 7.1(2)(b) and 7.1(2)(c) of NI 31-103. 2. Blanket Order 31-513 – Relief from the requirement under section 13.2(3)(b)(i) of NI 31-103 for mutual fund dealers As part of the know your client requirements, section 13.2(3)(b)(i) of NI 31-103 requires a registrant to collect information about the identity of any individual who owns or controls more than 10% of the voting rights attached to the voting securities of a corporate client. The purpose of this requirement is to identify the client, and if there is cause for concern, to make reasonable inquiries as to the reputation of the client in order to protect market integrity. Considering that mutual fund dealers trade primarily in publicly offered mutual funds which have restrictions on investments and that these dealers are required to identify any person who owns or controls 25% or more of the shares of a corporate client under the Proceeds of Crime (Money Laundering) and Terrorist Financing Act (Canada), compliance with section 13.2(3)(b)(i) of NI 31-103 presents significant costs that exceed any investor benefit. Since investment fund managers are not subject to section 13.2 of NI 31-103, registration of a mutual fund dealer in this category does not preclude use of this relief. Each regulator has therefore issued an order that exempts a mutual fund dealer from the application of the requirements of section 13.2(3)(b)(i) of NI 31-103, provided that:  the mutual fund dealer is not registered in any other category of registration other than investment fund manager; and  the mutual fund dealer complies with the provisions of the Proceeds of Crime (Money Laundering) and Terrorist Financing Act (Canada) requiring them to identify any person who owns or controls 25% or more of the shares of a corporate client.

3 Questions If you have questions regarding this Notice or the orders please direct them to any of the following: Lindy Bremner Senior Legal Counsel, Capital Markets Regulation British Columbia Securities Commission Tel: 604-899-6678 1-800-373-6393 lbremner@bcsc.bc.ca Navdeep Gill Legal Counsel, Market Regulation Alberta Securities Commission Tel: 403-355-9043 navdeep.gill@asc.ca Curtis Brezinski Compliance Auditor Saskatchewan Financial Services Commission Tel: 306-787-5876 curtis.brezinski@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 Dirk de Lint Senior Legal Counsel Compliance and Registrant Regulation Ontario Securities Commission Tel: 416-593-8090 ddelint@osc.gov.on.ca Sophie Jean Conseillère en réglementation Surintendance de l’assistance à la clientèle, de l’indemnisation et de la distribution Autorité des marchés financiers Tel: 514-395-0337, ext. 4786 Toll-free: 1-877-525-0337 sophie.jean@lautorite.qc.ca

4 Brian W. Murphy Deputy Director, Capital Markets Nova Scotia Securities Commission Tel: 902-424-4592 murphybw@gov.ns.ca Susan Powell Senior Legal Counsel New Brunswick Securities Commission Tel: 506-643-7697 susan.powell@nbsc-cvmnb.ca Katharine Tummon Superintendent of Securities Prince Edward Island Securities Office Tel: 902-368-4542 kptummon@gov.pe.ca Craig Whalen Manager of Licensing, Registration and Compliance Office of the Superintendent of Securities Government of Newfoundland and Labrador Tel: 709-729-5661 cwhalen@gov.nl.ca Louis Arki, Director, Legal Registries Department of Justice, Government of Nunavut Tel: 867-975-6587 larki@gov.nu.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 Frederik J. Pretorius Manager Corporate Affairs (C-6) Dept of Community Services Government of Yukon Tel: 867-667-5225 Fred.Pretorius@gov.yk.ca