Notice and reporting requirements for Ontario Instrument 81-508 Temporary Exemptions from the OEO Trailer Ban to Facilitate Dealer Rebates of Trailing Commissions and Client Transfers
On March 18, 2022, the Ontario Securities Commission (OSC) published Ontario Instrument 81-508 – Temporary Exemptions from the OEO Trailer Ban to Facilitate Dealer Rebates of Trailing Commissions and Client Transfers (the OSC Blanket Order). The OSC Blanket Order provides temporary exemptions from the OEO trailer ban for OEO dealers and investment fund managers (IFMs) to facilitate dealer rebates of trailing commissions to clients holding mutual funds in OEO dealer accounts and process client transfers. The OSC Blanket Order comes into effect on June 1, 2022 and expires on November 30, 2023. Other CSA jurisdictions have published exemptions in the form of local blanket orders.
As a reminder, any IFM and any OEO dealer relying on the OSC Blanket Order must, as soon as reasonably practicable and prior to relying on the OSC Blanket Order for the first time, notify the Director of the Investment Funds and Structured Products Branch (the IFSP Branch Director) by email at [email protected] stating their intention to rely on the order.
Any OEO dealer or IFM with Manitoba or Quebec as their PR jurisdiction that is also relying on the OSC Blanket Order in Ontario should notify the IFSP Branch Director by email at [email protected] stating their intention to rely on the order and also provide notification in accordance with the notice requirements set out in the local blanket orders in Manitoba and Quebec, as applicable.
Annexes A to D of the OSC Blanket Order (the Annexes) sets out certain reporting requirements relating to the dealer rebates of trailing commissions and client transfers facilitated under the temporary exemptions.
- Excel Templates – We ask that OEO dealers and IFMs use the following Excel templates for each of the Annexes:
- File Names – An Annex filed by an OEO dealer or an IFM should be named in accordance with the format set out in the name of the applicable Excel template. For example, an OEO dealer filing Annex A should name the file in the following format: NameofDealer_AnnexA_DateofsubmissionYYYY-MM-DD, e.g., ABCdealer_AnnexA_2022-07-31.
- Instructions – OEO dealers and IFMs filing an Annex should follow the instructions set out in the instructions tab for each Excel template.
- No Management Fees Rebates for Client Transfers – Any IFM not providing management fee rebates for client transfers should check off the following box under the instructions tab for Annex B:
☑Please check this box if no Management Fee Rebates will be provided for Client Transfers.
Any IFM who has checked the box in Annex B will not have to file Annex D if no management fee rebates were provided for client transfers.
- Secure Filing – Any OEO dealer or IFM who would like to use Proofpoint Share Web Application as a safe and secure means of transmission of the Annexes should email [email protected] with “Proofpoint Request” in the subject line. We will send you a reply email with the same subject line “Proofpoint Request”. To transfer your response securely to us, simply reply to that email and provide your Annex via the Proofpoint Share Web Application. You will be prompted to register with the Proofpoint Share website.
- Confidentiality - Any information provided to the OSC may be subject to requests for disclosure made by the public under the Freedom of Information and Protection of Privacy Act (FIPPA). As a result, to the extent that any information provided should be treated confidentially, please be sure to mark each document accordingly. We endeavour to respect each such expectation of confidentiality, though to the extent that a document is responsive to a request made under the FIPPA, we note that the final decision with respect to access to the records resides with Ontario's Information and Privacy Commissioner. If records are clearly identified as confidential and are requested under the FIPPA, you will be notified and provided with an opportunity to make written submissions with respect to the issue of disclosure.
- PR Jurisdictions – Any OEO dealer or IFM with PR jurisdictions not in Manitoba or Quebec must file the Annexes with the IFSP Branch Director by email at [email protected] in accordance with their local blanket orders. Any OEO dealer or IFM with Manitoba or Quebec as their PR jurisdiction that is also relying on the OSC Blanket Order in Ontario should file their Annexes with the IFSP Branch Director by email at [email protected] and also file their Annexes in accordance with the reporting requirements set out in the local blanket orders in Manitoba and Quebec, as applicable.