The Ontario Securities Commission yesterday released a staff notice setting out how OSC staff interpret the application of the adviser registration requirement set out in Ontario's Commodity Futures Act with respect to non-resident investment funds sold to Ontario investors.
The notice was released in response to enquiries regarding the "flow-through" theory for adviser registration, which, as announced in July 2009, has been discontinued in respect of the adviser registration requirement under NI 31-103. Under the discontinued theory, OSC staff had taken the view that advice to an investment fund "flowed through" to the investors in the fund and thus required the adviser to the fund to register as an adviser in Ontario, or be exempted from such registration, if any units of the fund were sold in the province. Under NI 31-103, however, the adviser to a fund must register as a portfolio manager in the jurisdiction where the fund is established, regardless of where the fund's investors are located.
Ultimately, yesterday's notice confirms that OSC staff take the same view regarding the elimination of "flow-through" theory under the Commodity Futures Act and the requirement to register as with NI 31-103.