Decision No. 2026-PDG-0028: Coordinated General Decision 31-935 Regarding Exemption from Client Disclosure Obligations for Certain Institutional Clients and Overflow Accounts

DECISION No. 2026-PDG-0028
Coordinated General Decision 31-935 Regarding Exemption from Client Disclosure Obligations for Certain Institutional Clients and Overflow Accounts of Registered Advisors

Definitions

1. The expressions defined in the Securities Act, RLRQ, c.V-1.1 (the "Act"), Regulation 14-101 on Definitions, RLRQ, c.V-1.1, r. 3, Regulation 31-103 on Registration Requirements and Continuous Obligations of Registered Persons, RLRQ, c.V-1.1, r. 10 (the "Regulation 31-103"), and Regulation 45-106 on Prospectus Exemptions, RLRQ, c.V-1.1, r. 21
   (the "Regulation 45-106") have the same meaning in this Decision, unless the context requires otherwise or a different definition is provided.

2. In this Decision, the following terms apply:
   "institutional client": any authorized client that is not a natural person, who receives institutional client information regarding their accounts, and whose governing bodies possess sufficient knowledge and experience to a) understand the investments, significant risks, costs, and fees associated with these accounts, b) make informed investment decisions regarding these accounts, and c) negotiate effectively the service terms and the terms of information provision regarding their accounts; "overflow account": any account opened for one or more related entities, other than natural persons, controlled by an institutional client, but which are not "authorized clients" because they do not meet the financial threshold set out in paragraph q of the definition of that expression in section 1.1 of Regulation 31-103; "institutional client information": any information provided on an ongoing basis that is substantially similar to that required under individual client disclosure obligations, but adapted to the needs of an authorized client, other than a natural person, meeting the criteria set out in paragraphs a, b, and c of the definition of "institutional client", and which may exclude information regarding costs embedded in investment funds traded on a market; "institutional qualified investor": any investor, other than a natural person, falling within the definition of "qualified investor" set out in section 1.1 of Regulation 45-106, with the exception of paragraphs e, e.1, j, j.1, k, and l, and who would be an institutional client but not an "authorized client" because they do not meet the financial threshold set out in paragraph q of the definition of that expression in section 1.1 of Regulation 31-103;

"individual client disclosure obligations": the obligations set out in sections 14.2, 14.2.1, 14.14.1, 14.14.2, 14.17, 14.17.1, and 14.18 of Regulation 31-103.

Context
3. In accordance with individual client disclosure obligations, a registered advisor is required to provide certain information to its clients regarding accounts, including information on the relationship, account statements, reports on fees and other forms of remuneration, and performance reports.

4. Individual client disclosure obligations do not apply to an "authorized client" that is not a natural person, or provide an exemption for such clients.

5. The principle justifying the statutory exemption mentioned in paragraph 4 is that an authorized client that is not a natural person is considered a sophisticated institutional investor in financial matters, notably as having the capacity to negotiate effectively the service terms with a registered advisor, and thus is able to decide on the information it needs regarding its accounts. Requiring a registered advisor to provide an institutional client with reports conforming to individual client disclosure obligations, in addition to the information agreed upon with the client, would incur significant additional costs and burden the advisor's resources without providing any benefit to the client.

6. Similarly, requiring a registered advisor to comply with individual client disclosure obligations regarding an institutional qualified investor or an overflow account holder would contradict the principle set out in paragraph 5.

Decision
7. Pursuant to section 263 of the Act and considering that this does not undermine investor protection or the public interest, respectively, the Autorité des marchés financiers exempts any registered advisor from individual client disclosure obligations regarding each of its overflow accounts and institutional qualified investor accounts, provided that:

a) the overflow account holder or institutional qualified investor meets the following criteria:

i) they receive institutional client information; ii) they have been notified that they will not receive the account information prescribed by individual client disclosure obligations to which they would have been entitled in the absence of this Decision; iii) they receive an explanation of the content of the institutional client information provided by the registered advisor in relation to that prescribed by individual client disclosure obligations;

b) the information and explanation mentioned in sub-paragraphs ii and iii of paragraph a are provided as follows:

i) in the case of a new overflow account holder or new institutional qualified investor, at the first account opening; ii) in the case of an existing overflow account holder or institutional qualified investor, in a timely manner and no later than three months after the date on which the registered advisor first relies on this Decision;

c) before relying on this Decision, the registered advisor declares its intention to do so to its primary regulator via a single notice sent to the email address indicated in Annex A.

Effective Date and Duration
8. This Decision takes effect on June 25, 2026, and will cease to have effect on the date of entry into force of regulatory or legislative amendments dealing essentially with the same subject matter as this Decision.

Made on June 25, 2026
Yves Ouellet
President and Chief Executive Officer

ANNEX A – Primary Regulator Contact Information
British Columbia: registration@bcsc.bc.ca
Alberta: registration@asc.ca
Saskatchewan: registrationfcaa@gov.sk.ca
Manitoba: registrationmsc@gov.mb.ca
Ontario: registration@osc.ca
Quebec: inscription@lautorite.qc.ca
New Brunswick: registration-inscription@fcnb.ca Prince Edward Island: ccis@gov.pe.ca Nova Scotia: NRS@novascotia.ca Newfoundland and Labrador: scon@gov.nl.ca Northwest Territories: SecuritiesRegistry@gov.nt.ca Yukon: Securities@yukon.ca