Decision No. 2021-PDG-0003: General Decision Regarding Exemptions from Certain Obligations under Regulation 81-104 on Alternative Mutual Funds

DECISION NO. 2021-PDG-0003 General Decision Regarding Exemptions from Certain Obligations under Regulation 81-104 on Alternative Mutual Funds

Having regard to Part 4 of Regulation 81-104 on Alternative Mutual Funds (the "Regulation 81-104"), RLRQ, c. V -1.1, r. 40, which provides that no natural person whose activities are restricted to mutual funds ("MFs") may carry out transactions in securities of an alternative mutual fund unless they meet the training obligations set out in paragraph 1 of Article 4.1 (the "training obligations"), and which provides that no principal dealer or participating broker may carry out transactions in securities of an alternative mutual fund in the relevant territory unless the natural person designated by them as responsible for the supervision of transactions in securities of an alternative mutual fund in the relevant territory (the "supervisor") has met the supervision obligations set out in paragraph 2 of Article 4.1 (the "supervision obligations");

Having regard to the recognition by the Autorité des marchés financiers (the "Autorité") of the limits that the training and supervision obligations may pose on the access of individual investors to alternative investment strategies through mutual fund dealers;

Having regard to the difficulties that the training and supervision obligations have created for the distribution of securities of alternative mutual funds, it is appropriate to offer to natural persons whose activities are restricted to MFs and to supervisors an additional choice of courses presenting updated and relevant information on alternative mutual funds. These courses will allow them to meet their respective training or supervision obligations and thus facilitate the access of individual investors to alternative investment strategies, while maintaining investor protection;

Having regard to Regulation 81-102 on Investment Funds, RLRQ, c. V-1.1, r. 39;

Having regard to section 263 of the Securities Act, RLRQ, c. V-1.1, which allows the Autorité, under the conditions it determines, to exempt a person or group of persons from all or part of the obligations provided for by the second to sixth titles of this Act or by regulation, when it considers that this exemption does not prejudice the protection of savers;

Having regard to the analysis carried out by the Principal Directorate of Investment Funds as well as the recommendation of the Superintendent of Securities Markets to grant the exemptions covered by this decision on the grounds that they do not prejudice the protection of savers nor the public interest;

Therefore:

1. The Autorité exempts the natural person whose activities are restricted to MFs from the obligations set out in paragraph 1 of Article 4.1 of Regulation 81-104, subject to the conditions set out below: a) They have obtained a passing grade for one of the following courses (collectively, the "alternative MF courses"): i) Canadian Securities Institute ("CSI") – The course titled Hedge Funds and Liquid Alternative Funds for Mutual Fund Representatives (the "CSI Transition Course"); ii) IFSE Institute – The course titled Investing in Alternative Mutual Funds and Hedge Funds (the "IFSE Transition Course"); iii) CSI – The course on Investment Funds in Canada, provided that the passing grade obtained relates to a subject and an exam essentially covering the content of the CSI Transition Course; iv) IFSE Institute – The course on Canadian Investment Funds, provided that the passing grade obtained relates to a subject and an exam essentially covering the content of the IFSE Transition Course; b) They only carry out transactions in securities of alternative mutual funds whose sale has been approved by their registered dealer; c) Before availing themselves of this exemption, their registered dealer has given notice to the Director of the Investment Funds Supervision Directorate by email to fonds_dinvestissement@lautorite.qc.ca specifying that natural persons whose activities are restricted to MFs registered with the registered dealer intend to avail themselves of this exemption.

2. The Autorité exempts the principal dealer or participating broker from the obligations set out in paragraph 2 of Article 4.1 of Regulation 81-104, subject to the conditions set out below: a) The supervisor of the principal dealer or participating broker has obtained a passing grade in one of the alternative MF courses;

b) Before availing themselves of this exemption, the principal dealer or participating broker has provided notice to the Director of the Investment Funds Supervision Directorate by email to fonds_dinvestissement@lautorite.qc.ca specifying that supervisors registered with the principal dealer or participating broker intend to avail themselves of this exemption.

This decision shall take effect on January 28, 2021. Made on January 27, 2021. / Louis Morisset President and Chief Executive Officer