Many firms are registered under all three categories, whether or not they use all three. While this is a convenient approach, there are certain circumstances where this may create unintended consequences.

For example, an IFM is permitted to distribute its own product to subscribers without having an EMD registration by relying on Section 8.6 of 31-103. The exemption under Section 8.6 permits a registered advisor to sell to a subscriber without EMD registration (though as mentioned, Registrants often maintain EMD registration regardless). However, “blocker rules” prevent use of the exemption under Section 8.6. if the Registrant possesses a license that could be used to make that distribution (namely the EMD registration). This means that the registrant could be prevented from making a distribution to a subscriber under the Section 8.6 exemption if it has the EMD registration. In that case, the regulators would expect the registrant  to make the distribution under its EMD license even if this would be impractical.

Fortunately, there are several approaches to dealing (pun intended) with this issue, ranging from seeking a surrender of the EMD license, to seeking comfort from the OSC that the exemption will nonetheless be relied upon in light of the blocker rules creating unintended consequences.