Regulatory Alerts2021-02-04
Draft Regulation to amend Regulation 31-103 respecting Registration Requirements, Exemptions and Ongoing Registrant Obligations
The regulator amends Regulation 31-103 to introduce section 13.4.3, which restricts registered individuals holding positions of influence from trading or recommending securities to susceptible clients. The definition of position of influence encompasses professionals such as religious leaders, medical doctors, lawyers, and educators who are reasonably perceived to have influence over others. Registered firms and individuals are prohibited from conducting these transactions for the influenced persons or their immediate family members to prevent conflicts of interest.
REGULATION TO AMEND REGULATION 31-103 RESPECTING REGISTRATION REQUIREMENTS, EXEMPTIONS AND ONGOING REGISTRANT OBLIGATIONS Securities Act (chapter V-1.1, s. 331.1, par. (1), (3), (8), (11), (26) and (34))
- Regulation 31-103 respecting registration requirements, exemptions and ongoing registrant obligations (chapter V-1.1, r. 10) is amended by adding the following section: “13.4.3. Restrictions on a registered individual who is in a position of influence (1) In this section, “position of influence” means a position, other than a position with a sponsoring firm, if, due to the functions of the position or the training or specialized knowledge required for the position, an individual in that position would be considered by a reasonable person to have influence over other individuals. (2) For greater certainty, a position of influence under subsection (1) includes the following: (a) a leader in a religious or similar organization; (b) a medical doctor; (c) a nurse; (d) a professor, instructor or teacher at a degree or diploma granting institution; (e) a lawyer; (f) a notary. (3) A registered firm must not permit a registered individual of the firm who is in a position of influence to purchase or sell securities or derivatives for, or recommend securities or derivatives to, (a) an individual who (i) has a relationship with the registered individual arising from the position of influence, and (ii) to a reasonable person, would be considered to be susceptible to the registered individual’s influence, or (b) a spouse, parent, brother, sister, grandparent or child of an individual described in paragraph (a). (4) A registered individual who is in a position of influence must not purchase or sell securities or derivatives for, or recommend securities or derivatives to (a) an individual who (i) has a relationship with the registered individual arising from the position of influence, and (ii) to a reasonable person, would be considered to be susceptible to the registered individual’s influence, or (b) a spouse, parent, brother, sister, grandparent or child of an individual described in paragraph (a).”
2 2. This Regulation comes into force on (insert here the date of coming into force of this Regulation).