Released on May 12 by the Autorité des Marchés Financiers (AMF), the Proposed Amendments to amend Regulation 31-103 respecting Registration Requirements, Exemptions and Ongoing Registrant Obligations set out the transitional provisions required to ensure that mutual fund dealers registered in Québec (“Québec MFDs”) become members of the new self-regulatory organization (“New SRO”).
The Proposed Amendments follow the publication of CSA Position Paper 25-404 New Self-Regulatory Organization Framework recommending the establishment of a new self-regulatory organization consolidating the activities of the Investment Industry Regulatory Organization of Canada (“IIROC”) and the Mutual Fund Dealers Association of Canada (“MFDA”).
Transition plan for Québec MFDs
Upon recognition of the New SRO and in accordance with the proposed transitional provisions, all Québec MFDs will be required to become members of the New SRO and comply with its rules.
Transition plan for Québec MFD membership in the New SRO will be phased-in
Effective January 1, 2023, for their activities in Québec, Québec MFDs will amongst others:
Become members of the New SRO;
Not be subject to the rules of the New SRO, except for its operating rules;
Continue to be subject to the regulatory framework currently applicable in Québec, including Regulation 31-103;
Continue to be overseen by the AMF;
Not have to contribute to the new investor protection fund of the New SRO but continue to contribute to the Fonds d’indemnisation des services financiers;
Permanent phase (date to be determined): Québec MFDs will be subject to the same oversight as MFDs in the other Canadian jurisdictions, while taking into account features specific to the framework applicable to the mutual fund sector in Québec, including the mandate, role and responsibilities of the Chambre de la sécurité financière.
Comments are to be provided by June 27, 2022.