The Canadian Securities Administrators (CSA) announced last week that all CSA members except Ontario have issued an order, effective March 27, exempting from the dealer registration requirement scheduled banks, certain other financial institutions, and federally and provincially regulated loan, trust and insurance companies, for trades in a "negotiable promissory note or commercial paper maturing not more than one year from the date of issue", provided the instrument is: (i) not convertible or exchangeable into or accompanied by a right to purchase another security other than a security described in the order, and (ii) has an approved credit rating as specified in the order.

The order reflects the exemption in section 3.35 of National Instrument 45-106 Prospectus Requirements and Exemptions (NI 45-106), which expired on March 26, 2010, and will be in force until September 28, 2011. The exemption will also be reviewed during the temporary period to determine whether it should be included as part of National Instrument 31-103 Registration Requirements and Exemptions (NI 31-103).

The Notice states that in Ontario, it is expected that there will be few persons or companies affected by the unavailability of section 3.35 of NI 45-106, given that (i) in Ontario this exemption is already unavailable to most persons or companies that are "market intermediaries", and (ii) there are also alternate exemptions from the dealer registration requirement that may be available for trading in short-term debt, such as the exemption in section 8.5 [trades through or to a registered dealer] of NI 31-103 and, in the case of financial institutions, the exemptions in section 35.1 of the Securities Act (Ontario) and section 4.1 of OSC Rule 45-501 Ontario Prospectus and Registration Exemptions.

If there is a circumstance where a person or company, other than a financial institution listed above, is adversely affected by the expiry of the exemption from the dealer registration requirement contained in section 3.35 of NI 45-106, the Notice indicates that staff would be prepared to consider recommending that an appropriate exemption be granted, on a case-by-case basis.