The Autorité des marchés financiers (AMF) has proposed a Regulation to amend Regulation 31-103 respecting Registration Requirements, Exemptions and Ongoing Registrant Obligations to set out transitional provisions to ensure that mutual fund dealers registered in Québec become members of the new self-regulatory organization (New SRO) resulting from the consolidation of IIROC and the MFDA.

All mutual fund dealers in Québec will be required to become members of the New SRO. Québec mutual fund dealers will be transitioned to the New SRO in two phases (a transition phase and permanent phase), on a number of terms and conditions. Effective January 1, 2023, mutual fund dealers in Québec will become members of the New SRO. However, they will not be subject to the rules of the New SRO, except for its operating rules. Instead, dealers will continue to be subject to the regulatory framework currently applicable in Québec. However, dealers would be able to participate in the New SRO’s committees and in its consultations.

The permanent phase will begin on the later of: (i) the implementation date of the New SRO’s harmonized rule book, (ii) the date that is one year after AMF approval of the New SRO’s harmonized rule book or on any other date determined by the AMF, on a consultative basis. As of that date, mutual fund dealers would be subject to the same oversight as in the other Canadian jurisdictions, while taking into account features specific to the framework applicable to the mutual fund sector in Québec. The transition period is expected to be at least one year following the adoption of the New SRO’s harmonized rule book. Comments on the proposed amendments are being accepted until June 27.

May 31, 2022