At Your Service
Are you planning to start, acquire or grow an asset management business? Do you know whether your business needs to get registered with securities regulators or about you and your firm’s ongoing obligations under securities laws? Are you planning to launch a private or public investment vehicle in Canada or do you need legal or regulatory compliance advice about its operations? AUM Law has the expertise, experience and connections to help you navigate Canada’s securities regulatory landscape.
- Registration / licensing of firms and individuals
- Compliance documentation including compliance manuals
- Ongoing registrant obligations, including know-your-client (KYC), know-your-product (KYP), suitability and conflicts of interest rules
- Compliance training
- Compliance risk assessments (aka “mock audits”)
- Assistance with implementing the Client-Focused Reforms (CFRs) to National Instrument 31-103 (including regulatory gap analyses, developing implementation plans, updating compliance documentation and customer-facing documents, and training)
- NRD and other regulatory filings
- Assistance in completing the Ontario Securities Commission's 2020 Risk Assessment Questionnaire (RAQ)
- Assistance with regulatory audits and other regulatory examinations
- Exemptive relief applications and interpretations of securities law
- Registrant misconduct matters
- Formation of public and private, pooled investment vehicles
- Establishment and acquisition of asset management businesses
- Drafting prospectus, offering memoranda, terms sheets and other investor disclosure documents
- Ongoing support for investment fund managers, portfolio managers and dealers
- Exemptive relief applications and interpretations of securities law
- SEDAR, SEDI and exempt trade report filings
- Private placements
- Formation and organization of business entities including corporations, medical professional corporations (MPCs), veterinary professional corporations (VPCs), limited and general partnerships, and trusts
- Mergers, acquisitions and restructurings
- Material business agreements
- Due diligence
- Custody and maintenance of minute books and corporate record books
- Corporate governance and compliance
- Organization of board of directors and shareholder meetings
Frequently Asked Questions
Does my business need to get registered with the securities regulatory authorities?
In general, a firm must register with a securities regulator in Canada pursuant to National Instrument 31-103 Registration Requirements, Exemptions and Ongoing Registrant Obligations (NI 31-103) if it trips the “business trigger” for registration in one or more provinces or territories, meaning that it is in the business of trading in or advising on securities.
Furthermore, in Ontario, a firm may be required to register if it conducts trading activities involving commodity futures contracts or commodity futures options, if it is acting as an underwriter, or if it is acting as an investment fund manager.
If you set up a vehicle that invests in mortgages and market it to Ontario residents, you also might trigger a requirement to register with the Financial Services Regulatory Authority of Ontario (FSRA).
Similarly, individuals must register with (or be approved by) the securities regulator if they trade, advise or underwrite on behalf of a registered dealer or adviser, or act as the ultimate designated person (UDP), chief financial officer (CFO), chief compliance officer (CCO), chief operating officer (CCO) or significant shareholder of a registered firm.
AUM Law can:
- Conduct a registration analysis to determine whether your business needs to be registered with securities regulators;
- Advise on whether the entities and individuals who need to be registered meet the registration criteria;
- Prepare and submit application materials to register those entities and related individuals, prepare applications for exemptive relief from specific regulatory requirements as needed; and
- Engage with regulators on your behalf to resolve any outstanding issues and obtain the required registrations and exemption orders.
What are some of the legal and regulatory compliance factors to consider when setting up an investment vehicle?
Factors to consider include the following:
Timelines and Compliance Costs
A publicly offered investment vehicle can attract a much wider range of investors, who do not have to meet the criteria for an exemption from the prospectus requirements and/or who might be attracted to the greater liquidity of publicly traded securities. However, the upfront costs of a prospectus-qualified distribution, as well as the ongoing costs of operating a publicly traded investment vehicle, are significant. Private investment vehicles generally can be marketed to investors more quickly and have lower initial and ongoing regulatory compliance costs.
AUM Law can advise you on the legal and regulatory factors relevant to your choice of investment vehicle, draft the offering documents and subscription documents, prepare and submit all of the regulatory filings, and engage with securities regulators on your behalf as needed.
Tax considerations tend to drive the structure of many investment vehicles. AUM Law can take charge of structuring the vehicle on your behalf while working seamlessly with the tax and other advisors who are handling other aspects of the transaction.
Registration requirements are also a consideration. Please see our FAQ “Does my business need to get registered with the securities regulatory authorities?” above for more information.
How can AUM Law help my firm stay on top of regulatory changes and ongoing responsibilities?
AUM Law offers fixed-fee compliance support plans as well as á la carte services such as the following:
- We monitor regulatory developments and advise you about the changes might affect your operations
- We prepare compliance calendars so that you can plan for upcoming regulatory obligations
- We deal with regulatory inquiries or issues
- We prepare, review and update compliance manuals, tailored to your business so that they reflect the latest regulatory developments
- We review and update offering and other disclosure documents, client account documentation such as subscription agreements, investment management agreements, and know-your-client (KYC) forms, and material business agreements as required to reflect changes in the applicable laws
- We provide training to your firm’s managers and employees regarding their legal and regulatory obligations
- We review business activities for potential conflicts of interest and provide legal advice on how to manage such conflicts
- We advise on and help your firm prepare and file reports to comply with anti-money laundering (AML), anti-terrorist financing (ATF) and Canadian sanctions legislation
- We conduct two-year effectiveness reviews of firms AML/ATF programs
- We conduct general or targeted compliance risk assessments (aka “mock audits”) to help your firm prepare for regulatory examinations
- We provide ongoing registration filing services and advice related to the National Registration Database (NRD), the System for Electronic Document Access and Retrieval (SEDAR), and the System for Electronic Disclosure by Insiders (SEDI)
- We prepare and file prescribed reports such as Form 45-106F1 Report of Exempt Distribution (for privately offered securities).
If a legal or regulatory issue arises that falls outside the scope of AUM Law’s services, we can manage the matter for you as your general counsel by sourcing the relevant expertise, offering you a choice of providers (based on timing, cost and other considerations), briefing them, and then overseeing their work on your behalf.
The Ontario Securities Commission's Compliance and Registrant Regulation Branch just told me they’re coming to do a regulatory compliance audit. What do I do now?
Securities regulators including the OSC conduct compliance reviews of registered advisers, dealers, and investment fund managers to determine whether they are complying with applicable securities laws and rules.
The best preparation for a compliance review is to have AUM Law conduct a compliance risk assessment (aka a “mock audit”) well before the regulator comes knocking at your door. Our mock audit will help you identify potential compliance deficiencies and begin remediating them, as well as provide you with documented evidence that your firm takes its compliance responsibilities seriously. We can also provide compliance audit training to your staff, so they are better prepared and more comfortable engaging with the regulator’s staff during an audit.
But if a securities regulator calls you before you call us, we can:
- Prepare you and your staff for the compliance review so you know what to expect and are strategically better positioned to provide a vital, good first impression to the regulator’s staff in the initial meeting; and
- To the extent possible during this limited time frame, identify and address material issues that would otherwise result in a more difficult and costly compliance review that could potentially result in regulatory sanctions.
“I really appreciate the quick response (also the late phone consultation and the early morning email). Also, I have never seen positive feedback to a Compliance Training session like we have had at Forthlane. Thank you for achieving the impossible!”
Mark H. Roth, Co-President, Operations and Strategy, Forthlane Partners
“AUM Law provides wise counsel, great service, and always valuable input. They are key to keeping us on track with regulators.”
Lawrence J. Dittrich, Chief Compliance Officer, Wickham Investment Counsel Inc.
“AUM Law is responsive, pragmatic and sensible.”
David Moss, General Counsel and Head of Compliance, Permian Global