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CSA Notice 32-302 Announces Revocation of the Northwestern and Mortgage Investment Entities Dealer Registration Exemptions
Posted in Securities

On August 15, 2018, the Canadian Securities Administrators (CSA) announced in CSA Notice 32-302 the pending revocation of:

  1. the Northwestern Exemption in all participating jurisdictions other than Alberta and Saskatchewan; and
  2. BC Instrument 32-517 Exemption from Dealer Registration Requirement for Trades in Securities of Mortgage Investment Entities (BCI 32-517).

Northwestern Exemption

Securities regulatory authorities of British Columbia, Manitoba, Nunavut, the Northwest Territories and Yukon have advised that they will revoke their substantially harmonized dealer registration exemptions that form the “Northwestern Exemption” effective April 30, 2019, subject to a transition period for certain qualifying applicants.

The local orders (as per below) have been providing finders and other intermediaries with an exemption from the dealer registration requirement for trades in certain prospectus exempt securities since 2010.

  • BC Instrument 32-513 Registration Exemption for Trades in Connection with Certain Prospectus-Exempt Distributions,
  • Manitoba Blanket Order 31-505 Registration Exemption for Trades in Connection with Certain Prospectus-Exempt Distributions,
  • Nunavut Blanket Order 32-501 Registration Exemption for Trades in Connection with Certain Prospectus-Exempt Distributions,
  • NWT Blanket Order 32-501 Registration Exemption for Trades in Connection with Certain Prospectus-Exempt Distributions, and
  • Yukon Superintendent Order 2010/009 Registration Exemption for Trades in Connection with Certain Prospectus-Exempt Distributions.

Alberta and Saskatchewan are considering whether to revoke their own local exemption orders comprising the Northwestern Exemption and will advise of their approach in due course.

BCI 32-517

The British Columbia Securities Commission has announced their intention to permanently revoke BCI 32-517 effective February 15, 2019, subject to a transition period for certain qualifying applicants. The Instrument has been providing temporary dealer registration relief for Mortgage Investment Entities in BC since 2010.

Transition

As regulators expect that a significant number of registration applications will result in a processing delay ahead of the expiry dates for the exemptions, transition provisions will be in place. These provisions will allow persons who have submitted applications to continue to rely on the exemption past the respective expiry dates as long as the proper securities regulatory authority has received a substantially complete registration application by the expiry date, and provided that the applicant is in compliance with the terms of the exemption on the expiry date and on an ongoing basis. On a case-by-case basis, regulators will look at interim relief for individuals who may have difficulty meeting the proficiency requirements by the expiry date.

What Clients Should Know

Applicants who are relying on the exemptions will need to either engage a third party registered dealer or seek exempt market dealer registration in order to continue with their business practices. 

Lawson Lundell LLP is able to assist with the registration application process. Partner Angela Austman and Paralegal Alaina Zecchini have significant experience in preparing these applications on behalf of clients.

For further information and assistance with the preparation of these applications, please contact Angela Austman at aaustman@lawsonlundell.com or a member of our Corporate Finance and Securities Group.

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