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BCN 2010/27 Notice of Adoption of permanent BC Instrument 81-513 Self-Dealing and related consequential amendments [BCN]

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Published: 2010-09-24

Related Documents

Document
BC Reg 267-2010

Concurrently Published

Document
11-102 11-102 Passport System [MI - Rescinded]
81-107 81-107 Independent Review Committee for Investment Funds [NI - Rescinded]
81-513 81-513 Self-Dealing [BCI]

Effective September 25, 2010, the Commission made BCI 81-513 Self-Dealing and related consequential rule amendments permanent rules.

Background
On December 23, 2009, the Commission made BCI 81-513 Self-Dealing and related consequential amendments urgent rules, and the Executive Director specified Form 81-903 Report required under s.9 of BCI 81-513.

BCI 81-513 replaced the self-dealing provisions found in sections 120, 121, 122, 124, 126 and 129 of the Act, with two exceptions

1. section 124(b) is not in BCI 81-513 because the commission can provide relief under section 130
2. definitions in section 120(1) referred to in section 127 are not in the rule because they and section 127 are in section 13.5 of National Instrument 31-103 Registration Requirements and Exemptions

Below is a table of concordance showing where you find the self-dealing provisions in the rule.

 

section of the Actsection of BCI 81-513
s. 120(1)s. 1
s. 120(2)s. 2
s. 120(3)s. 3
s. 120(4)s. 4
s. 120(5)s. 5
s. 121s. 6
s. 122s. 7
s. 124s. 8
s. 126s. 9
s. 129s. 10


These related consequential rule amendments were made so the rules refer to BCI 81-513

  • Appendix D of Multilateral Instrument 11-102 Passport System
  • Appendix A and B of National Instrument 81-107 Independent Review Committee for Investment Funds

When the Commission adopted the urgent rules, they were effective until September 24, 2010. On December 23, 2009, the Commission published the urgent rules for comment.

We received comments from one commenter and made some minor changes to BCI 81-513. A summary of these comments is in Annex A to this Notice.

Please direct any questions to:

Noreen Bent
Manager and Senior Legal Counsel, Corporate Finance
British Columbia Securities Commission
e-mail: nbent@bcsc.bc.ca
phone: 604 899-6741


September 24, 2010

 


Brenda M. Leong
Chair

 

Ref:BC Instrument 81-513 Self-Dealing
 National Instrument 81-107 Independent Review Committee for Investment Funds
 Multilateral Instrument 11-102 Passport System
 BC Policy 13-601 Required Forms 
 Form 81-903F Report required under s. 9 of BC Instrument 81-513 Self-Dealing
 BCN 2009/36 Notice of Adoption as an urgent rule, and of Publication for Comment, of BC Instrument 81-513 Self-Dealing and related consequential amendments

This Notice may refer to other documents. These documents can be found at the B.C. Securities Commission public website at www.bcsc.bc.ca in the section Securities Law & Policy: Policies & Instruments.

 
Annex A

BC Instrument 81-513 Self-Dealing

In response to its publication for comment of BC Instrument 81-513 Self-Dealing, published on December 24, 2009, the Commission received comments from only one commenter, Borden, Ladner, Gervais. Our responses follow:

Comment 1(a) – amend the definition of related person to refer specifically to Part 6 of BCI 81-513

Response
We have made this change.

Comment 1(b) – delete the deeming provision in section 2(a) of BCI 81-513

Response
We have not made this change. The self-dealing restrictions imposed by other Canadian jurisdictions include a deeming provision that is similar to the one in section 2(a). We want to remain harmonized with the other jurisdictions. If the CSA reconsiders the self-dealing requirements, the Commission would consider this comment further at that time.

Comment 2 – correct the reference in section 6(1)(a) from ‘associated’ to ‘associate’

Response 
We have made this change.

Comment 3 – amend section 9 of BCI 81-513 to either
(a) restrict the application of section 9(a) (or section 9 generally) to transactions involving related persons in whom an investment would be prohibited by section 6, or
(b) include an exemption from the application of section 9(a) where the transaction is reported by the manager in accordance with NI 62-103

Response
We have not made this change. The reporting obligation found in section 9 of BCI 81-513 is the same as the self-dealing reporting obligation in other Canadian jurisdictions. We want to remain harmonized with the other jurisdictions. If the CSA reconsiders the self-dealing requirements, the Commission would consider this comment further at that time.