(November 15 – 12:15 ET) – The
Ontario Securities Commission
has published final versions of its
new mutual fund industry rules.
The new rules replace the old
national policies 34, 36 and 39.
National Instrument 81-102,
which replaces NP 34 and 39, sets
out the basic rules for fund
operations. The OSC says it
received comments on seven
different areas:
- the use of swaps by mutual
funds; - securities lending and the use
of repurchase agreements; - a standardized regime for
funds of funds; - the timing of transfers among
financial institutions and mutual
funds; - principal trading between
mutual funds and related entities; - the acquisition of securities
by from related underwriters
inter-fund trading.
The Canadian Securities
Administrators accepted the
comments given regarding the use
of swaps. It says it will permit
changes in this area.
The OSC rule was delivered to
the Ontario Minister of Finance
on November 12. He has until
January 11, 2000 to approve it,
make it law; reject it, or return
it to the commission. If it is approved, it will come into effect on February 1, 2000.
The other major rule, 81-101, deals with simplified prospectuses and annual information forms. The Ministerial time-line for this rule is the same as set out above. In the meantime, the CSA says that it will accept pro forma or preliminary prospectuses, prepared in accordance with the new rule, after January 1 for prospectuses that must be filed in January.
Prospectuses receipted under
NP36 can be used until they
expire. Prospectuses prepared
under NP 36 can be receipted
after the new rule comes into
effect provided that a pro
forma or preliminary prospectus
was filed before the new rule
takes effect.
The new rules can be found in
the November 12 issue of the OSC’s
bulletin or on the commission’s
website: