The Nova Scotia Securities Commission is adopting a rule to allow principal-agent business models in that province.

The rule makes it clear that person who is in a contractual relationship with a dealer under the authority of the Investment Dealers Association’s by-law governing principal-agent relationships, “is deemed to be an employee of the dealer for the purpose of the Act, the regulations and the rules and is qualified for registration as a salesman of the dealer.”

The rule ensures that firms have supervisory responsibility for their salesmen, even if they are organized as agents of the firm for tax purposes.

The new rule is set to take effect on August 26, unless the Governor in Council disapproves the rule or returns it to the commission for further consideration.