Section 8.6 of NI 31103 provides an exemption whereby registered advisers (or international advisers exempted under section 8.26) do not require a dealer registration for trades in securities of nonprospectus qualified investment funds.
The exemption is available provided that:
- the registered firm acts as the fund’s portfolio manager and investment nfund manager
- trades are made only to managed accounts of the firm’s clients
This exemption recognizes that advisers often establish pooled funds to facilitate the efficient investment of their clients’ money. However, one aspect of the exemption that receives less attention is that firms that rely on it must provide written notice to the regulator within 10 days of its first use.
While there are no late fees in Ontario with respect to the filing of this notice, there may be regulatory implications of noncompliance.