31-103 – Registration Requirements, Exemptions and Ongoing Registrant Obligations (National Instrument)

Amendments to National Instrument 31-103

Full cost disclosure and product performance reports for segregated funds and investment funds (“Total Costs Report”).

Effective Date: January 1, 2026. In Saskatchewan: If this Instrument is filed with the Registrar of Regulations after January 1, 2026, this Instrument comes into force on the day on which it is filed with the Registrar of Regulations.

amendments_to_ni_31_103_with_csa_and_ccir_joint_notice_of_publication_for_implementation_april_20_2023.pdf

Amendments to National Instrument 31-103

Effective Date: September 13, 2023. In Saskatchewan: November 24, 2023.

The Amendment Regulations make the following changes to NI 31-103:

• The repeal the definition of “Canadian financial institution”. This definition is no longer required as the definition of that expression in National Instrument 14-101 Definitions will apply to NI 31-103.
• References to “financial intermediary” are being removed since that expression is narrower than “Canadian financial institution” and thus not necessary.
• Reference to “CICA Handbook” is being replaced with “Handbook”.

Please see Part XLIX on page 5 of the PDF.

31_103_amendments_november_24_2023.pdf

Amendments to National Instrument 31-103

Effective Date: June 6, 2022. In Saskatchewan: June 6, 2022.

The Amendment Regulations make changes to section 12.7 of NI 31-103 to clarify that the expiry date of a registered firm’s insurance policy does not need to be reported where the insurance policy has not lapsed and there have been no other changes to the insurance policy.

The Amendment Regulations also add section 13.4.3 that will replace the existing practice of imposing terms and conditions which restrict the client base of registered individuals and permitted individuals whose activities outside of their sponsoring firms are positions of influence over certain clients.

Please see Part XLIX on page 55-56 of the PDF.

Amendments to National Instrument 31-103

Effective Date: June 1, 2022. In Saskatchewan: June 1, 2022.

On February 20, 2020, the Canadian Securities Administrators (CSA), with the exception of Ontario, published Multilateral CSA Notice of Amendments to National Instrument 81-105 Mutual Fund Sales Practices, Changes to Companion Policy 81-105CP to National Instrument 81-105 Mutual Fund Sales Practices and Changes to Companion Policy 81-101CP to National Instrument 81-101 Mutual Fund Prospectus Disclosure relating to Prohibition of Deferred Sales Charges for Investment Funds (the Multilateral CSA Notice). The amendments published in the Multilateral CSA Notice prohibit the payment by fund organizations of upfront sales commissions to dealers, which results in the discontinuation of all forms of the deferred sales charge option, including low-load options (collectively, the DSC option)(the Multilateral DSC Ban).

As the Multilateral DSC Ban did not include Ontario, the amendments published in the Multilateral CSA Notice included certain provisions relating to Ontario (the Ontario references) in NI 31-103 and 31-103CP. Further to amendments published in the OSC Notice, the Ontario References are no longer applicable.

Once the Multilateral DSC Ban come into effect on June 1, 2022 (the Effective Date), the provisions requiring disclosure of the DSC option in the simplified prospectus, the fund facts document and pre-trade disclosure will no longer be applicable as the DSC option will no longer be offered (the DSC references). The OSC Notice published related consequential local amendments and changes in Ontario to remove DSC References from NI 81-101, 81-101CP, NI 31-103 and 31-103CP as of the Effective Date.

The Amendment Regulations remove the Ontario references and the DSC references.

Please see Part XLIX on page 4 of the PDF.

Amendments to National Instrument 31-103

Effective Date: January 5, 2022. In Saskatchewan: February 8, 2022.

The Amendment Regulations repeal the definition of "designated rating" and substituting the following: "'designated rating' has the same meaning as in National Instrument 81-102 Investment Funds;".

Please see Part XLIX on page 46 of the PDF.

Amendments to National Instrument 31-103

Effective Date: December 31, 2021. In Saskatchewan: December 31, 2021.

Seniors are a growing segment of investors whose needs and issues demand attention. Delivering strong investor protection and responding to the needs and priorities of older and vulnerable investors are key components of the Canadian Securities Administrators' (the CSA) mandate. The Amendment Regulations are part of the CSA’s initiative to enhance protection of older and vulnerable clients by providing registrants with tools and guidance to address issues of financial exploitation and diminished mental capacity.

Trusted Contact Person

The Amendment Regulations will require registrants to take reasonable steps to obtain the name and contact information of a trusted contact person (TCP), as well as the client’s written consent to contact the TCP in prescribed circumstances.

Temporary Holds

In addition, the Amendment Regulations will clarify that registered firms and registered individuals are not prohibited from placing a temporary hold on the purchase or sale of a security on behalf of a client or on the withdrawal or transfer of cash or securities from a client’s account, provided that they take certain prescribed steps, in the following circumstances:

• where a registered firm reasonably believes that financial exploitation of a vulnerable client has occurred, is occurring, has been attempted or will be attempted, or
• where a registered firm reasonably believes that the client does not have the mental capacity to make decisions involving financial matters.

31_103_amendments_december_31_2021.pdf

Amendments to National Instrument 31-103

Effective Date: March 1, 2021. In Saskatchewan: March 1, 2021.

The Amendment Regulations make the following amendments:

• In section 8.12, subsection (3) they strike out "In Alberta. British Columbia, Manitoba, New Brunswick, Quebec and Saskatchewan, subsection (2)" and substitute "Subsection (2)"; and
• Repeal section 8.12, subsection (4).

Please see Part XLIX on page 17 of the PDF.

Amendments to National Instrument 31-103

Effective Date: Subsections 2(20) to (26) and (28) to (30) of these regulations come into force on December 31 , 2020.
Section 1 and subsections 2(1) to (19), (27), (31) and (32) of these regulations come into force on December 31 , 2021.

In Saskatchewan: Subsections 2(20) to (26) and (28) to (30) of these regulations come into force on December 31 , 2020.
Section 1 and subsections 2(1) to (19), (27), (31) and (32) of these regulations come into force on December 31 , 2021.

The Amendment Regulations implement the Client Focused Reforms (CFRs) which make changes to the registrant conduct requirements in order to better align the interests of securities advisers, dealers and representatives (registrants) with the interests of their clients, improve outcomes for clients, and make clearer to clients the nature and the terms of their relationship with registrants.

The CFRs are based on the concept that in the client-registrant relationship, the interests of the client come first. Under the Amendments, registrants will be required to

• address material conflicts of interest in the best interest of the client,
• put the client’s interest first when making a suitability determination, and
• do more to clarify for clients what they should expect from their registrants.

These core elements of the Amendment Regulations are supported with the introduction of a know your product (KYP) provision in NI 31-103 and enhancements to the existing know your client (KYC), suitability, conflict of interest, and relationship disclosure information (RDI) requirements. These provisions set out the fundamental obligations of registrants toward their clients and are essential to investor protection. They are designed to work together throughout the client-registrant relationship, as an extension for the duty of registrants to deal fairly, honestly and in good faith with their clients.

The Amendment Regulations' changes to the KYC requirements are needed to support the enhanced suitability determination obligations. The new KYP requirements set out firm and registered individual obligations that support the enhanced suitability determination obligation and the enhanced conflicts of interest requirement. Amendment Regulations' changes to the conflicts of interest provisions support the new obligation to address conflicts in the client’s best interest with requirements for registered firms and registered individuals concerning the identification and disclosure of material conflicts. The Amendment Regulations' changes to the RDI requirements include requirements to inform clients about potentially significant restrictions, costs and limitations relating to the products and service offered to them. There are also new provisions concerning misleading communications. Finally, the Amendment Regulations include additions to internal controls and a requirement for firms to provide training to their registered individuals. The Amendment Regulations also include some technical, non-substantive consistency changes to the Instrument.

Some of the changes in the Amendment Regulations will impose new requirements, while others codify best practices set out in existing Canadian Securities Administrators, Investment Industry Regulatory Organization of Canada and the Mutual Fund Dealers Association of Canada's guidance. We believe that, taken together, they will result in a new, higher standard of conduct across all categories of registered dealer and registered adviser.

31_103_amendments_december_31_2020_and_december_31_2021.pdf

Amendments to National Instrument 31-103

Effective Date: June 12, 2019. In Saskatchewan: June 12, 2019.

Amendments to National Instrument 31-103

Effective Date: June 12, 2018. In Saskatchewan: June 12, 2018.

Amendments to National Instrument 31-103

Effective Date: December 4, 2017. The following provisions come into force on June 4, 2018:
(a) subsections 4(1) and (2);
(b) clauses 4(12)(c), (d) and (e);
(c) clauses 4(14 )(c), (d) and (e);
(d) clauses 4(16)(c), (d) and (e);
(e) clauses 4(18)(c), (d) and (e);
(f) clause 4(26);
(g) clause 4(28)(b);
(h) subsections 4(29) to (34), (47) to (50) and (52) to (55).

In Saskatchewan: December 4, 2017. The following provisions come into force on June 4, 2018:
(a) subsections 4(1) and (2);
(b) clauses 4(12)(c), (d) and (e);
(c) clauses 4(14 )(c), (d) and (e);
(d) clauses 4(16)(c), (d) and (e);
(e) clauses 4(18)(c), (d) and (e);
(f) clause 4(26);
(g) clause 4(28)(b);
(h) subsections 4(29) to (34), (47) to (50) and (52) to (55).

Amendments to National Instrument 31-103

Effective Date: February 1, 2017. In Saskatchewan: February 8, 2017.