The CSA yesterday announced the adoption of new instruments and policies to address the registration of non-resident investment fund managers, as well as the issuance of parallel orders to extend the transition provisions regarding the registration requirement of IFMs from September 28 to December 31, 2012.
Specifically, the OSC, Quebec's Autorité des marchés financiers and Newfoundland and Labrador's Financial Services Regulation Division, Service NL announced the implementation of Multilateral Instrument 32-102 Registration Exemptions for Non-Resident Investment Fund Managers, which provides an exemption from the investment fund manager registration requirement where an IFM does not have a place of business in the local jurisdiction and if either (i) none of the investment funds has security holders resident in the local jurisdiction; or (ii) the IFM and those investment funds have not, at any time after September 27, 2012, actively solicited residents in the local jurisdiction to purchase securities of the fund.
Meanwhile, all other jurisdictions in Canada released Multilateral Policy 31-202 Registration Requirements for Investment Fund Managers, which is intended to provide guidance with regards to determining whether registration as an IFM is required in those jurisdictions. As we noted in an earlier post describing the initial proposal, these jurisdictions would allow the applicable exemptions found in NI 31-103 to expire, but would subsequently interpret the registration requirements to only require registration as an investment fund manager in a jurisdiction if the investment fund manager directs or manages the business, operations or affairs of an investment fund in that jurisdiction.
The MP 31-202 jurisdictions noted that many of the comments received in response to an earlier version of MP 31-202 agreed that a registration trigger based on the functions and activities of investment fund managers was preferable to one based on the presence of security holders or solicitation of investors. Notably, New Brunswick, which had previously been a party to MI 32-102 along with Ontario, Quebec and Newfoundland and Labrador, has now switched sides to join the majority of the jurisdictions.
As we described our February post, both camps proposed earlier versions of their multilateral instruments/policies earlier this year. Assuming ministerial approvals, the new and amended instruments and policies will now come into effect on September 28, 2012.
The CSA also announced that they are reviewing the dispute resolution provisions in NI 31-103 and may publish proposed amendments in the future. In the meantime, the CSA are extending the exemption from the requirement to provide dispute resolution services until the earlier of September 28, 2014 or the coming into effect of amendments to the dispute resolution provisions.