The Ontario Securities Commission issued a staff notice that appears to restrict, if not eliminate, certain exemptions under applicable law potentially relied on by non-OSC registered foreign brokers (including US futures commission merchants) for trading futures and options on behalf of Ontario-based persons. Under relevant futures law in Ontario, registration of a dealer (what is known as a broker or FCM in the US) is not required in respect of “a trade in a contract by a hedger through a dealer” or a “trade in a contract executed on an exchange [outside Ontario] … from an order placed with a dealer who does not carry on business in Ontario, not involving any solicitation by or on behalf of the dealer.” In connection with the so-called “unsolicited trade” exemption, the staff notice claims this was meant solely to apply to “occasional, isolated trades” for Ontario-based customers that are not solicited by a foreign broker. It was not intended “to permit the operation of unsolicited order-execution accounts,” says the staff notice, because “this would constitute trading with regularity” or trades introduced by third parties (for example, by introducing brokers or finders) for which commissions are paid. The staff notice also claims that foreign brokers that regularly conduct business with a client under another exemption—for example a securities exemption—cannot rely on the unsolicited trade exemption to conduct futures transactions with the same customer. In addition, the staff notice claims that the “hedger” exemption is flat out “not available to an unregistered foreign [broker] that wishes to trade with [a] hedger” even if the proposed transactions are bona fide hedges. OSC will continue to consider specific requests for registration exemptions from foreign brokers wishing to do futures business with certain qualified Ontario-based persons modeled under the exemptive regime for international firms in the securities industry.