Canadian Securities Regulators Approve Requirements On Use of Client Brokerage Commissions

TorontoThe Canadian Securities Administrators (CSA) today announced the approval of National Instrument 23-102 Use of Client Brokerage Commissions and related Companion Policy 23-102CP. NI 23-102 clarifies the obligations of advisers and registered dealers when advisers obtain goods and services other than order execution in connection with client brokerage commissions, and also introduces new disclosure requirements for advisers. 

“It is extremely important that advisers take appropriate steps to ensure that they don’t place their interests ahead of those of their clients and that they provide their clients with proper disclosure where appropriate,” said Jean St-Gelais, Chair of the CSA and President and Chief Executive Officer of the Autorité des marchés financiers. 

In addition, on October 9, 2009, the CSA plans to publish for comment, consequential amendments to investment fund prospectus disclosure forms: Form 81-101F2 Contents of Annual Information Form under National Instrument 81-101 Mutual Fund Prospectus Disclosure; and Form 41-101F2 Information Required in an Investment Fund Prospectus under National Instrument 41-101 General Prospectus Requirements.

The purpose of the proposed form amendments will be to ensure consistency between the disclosure requirements under NI 23-102 relating to client brokerage commissions and similar disclosure prescribed for investment funds. NI 23-102 will replace OSC Policy 1.9 Use by dealers of brokerage commissions as payment for goods or services other than order execution services (“Soft Dollar” Deals), and the Autorité des marchés financiers Policy Statement Q-20 of the same name. Pending necessary approvals, NI 23-102 is expected to come into force in all jurisdictions on June 30, 2010. 

NI 23-102 is available on various CSA members’ websites. The proposed form amendments will be available on the various CSA members’ websites on October 9, 2009, and the comment period for the Form Amendments will end on January 7, 2010. 

The CSA, the council of the securities regulators of Canada’s provinces and territories, co‑ordinates and harmonizes regulation for the Canadian capital markets. 

For more information: 

Carolyn Shaw-Rimmington
Ontario Securities Commission

Sylvain Théberge
Autorité des marchés financiers

Mark Dickey
Alberta Securities Commission

Ken Gracey
British Columbia Securities Commission

Ainsley Cunningham
Manitoba Securities Commission

Wendy Connors-Beckett
New Brunswick Securities Commission

Natalie MacLellan
Nova Scotia Securities Commission

Barbara Shourounis
Saskatchewan Financial Services

Katharine Tummon
Consumer, Corporate and Insurance Services
Registrar of Securities,
Prince Edward Island

Doug Connolly
Financial Services Regulation Div.
Newfoundland and Labrador

Fred Pretorius
Yukon Securities Registry

Louis Arki
Nunavut Securities Office

Donn MacDougall
Northwest Territories
Securities Office