The Ontario Securities Commission has sent a new rule regarding commodity pools to the Ontario finance minister for approval.

The rule will regulate publicly offered commodity pools. It allows commodity pools to follow investment objectives and strategies that may involve investing in commodities (either directly or through the use of derivatives), using derivatives and employing leverage in ways not permitted for conventional mutual funds.

The Ontario minister has 60 days to approval the rule, reject it, or return it for further consideration; otherwise it takes force on November 1. The rule is also expected to be adopted in Alberta, British Columbia., Saskatchewan, Manitoba, Newfoundland and Nova Scotia.

The Commission des valeurs mobilières du Québec participated closely in the development of the rule but has not yet decided to adopt the instruments. And, the British Columbia Securities Commission did not adopt some sections of the rule.

Notably, the BCSC allows mutual fund dealers to sell commodity pools with additional proficiency requirements. The OSC, however, says that it continues to believe that commodity pools are different from conventional mutual funds, including those that are primarily derivatives based mutual funds. It continues to believe in the need for additional proficiency of salespersons and dealers.