National Instrument

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BLG’S R

EGISTRANT

R

EGULATION AND

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OMPLIANCE

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RACTICE

OurRegistrant Regulation and Compliance Practiceis the largest practice of its kind in Canada, with recognized experts in this field. We work with Canadian and international advisers (portfolio managers and investment counsel), fund managers and dealers, including SRO members and exempt (limited) market dealers. We act for the Investment Industry Regulatory Organization of Canada, the Mutual Fund Dealers Association of Canada, the Investment Counsel Association of Canada and the Investment Industry Association of Canada, along with other industry trade associations, and have excellent working relationships with the Canadian securities regulators and other government officials. We provide a full range of legal services, including advice and assistance on becoming and continuing to be registered with the Canadian securities regulators and/or members of the SROs. Our services for our clients have included developing and designing, as well as reviewing and assessing, compliance procedures and practices relating to regulatory and internal policy requirements, assisting in building or strengthening compliance capability, conducting audits and investigations, identifying operational problems and devising appropriate solutions and responding to regulatory developments. We also provide advice on structuring investment funds and offerings of investment funds, including hedge funds, pursuant to private placements and public offerings within Canada to comply with Canadian securities laws.

Please contact any of the following lawyers if you have any questions about National Instrument 31-103 and its application to your business.

TORONTO:

Prema K.R. Thiele Laurie J. Cook Rebecca A. Cowdery Marsha P. Gerhart

416-367-6082 416-367-6639 416-367-6340 416-367-6042

[email protected] [email protected] [email protected] [email protected]

VANCOUVER: CALGARY: MONTRÉAL:

Jason J. Brooks H. Scott McEvoy Angie Redecopp François Brais

604-640-4102 604-640-4170 403-232-9504 514-954-3143

[email protected] [email protected] [email protected] [email protected]

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AUGUST 2009

National Instrument 31-103

At a Glance

Keeping Reforms in Sight:

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D E A L E R S

BORDEN LADNER GERVAIS LLP INVESTMENT MANAGEMENT ADVISORY

2 BORDEN LADNER GERVAIS LLP

INVESTMENT MANAGEMENT ADVISORY

3

Fitness for Registration

Client Relationships, Compliance, Internal Controls

Dealing

Representative

UDP and CCO

Minimum Capital

Financial

Account

Recordkeeping

Compliance

Complaint

Proficiency

and Insurance

Reporting

Opening

and Reporting

Systems

Handling

Investment

Dealer

IIROC Membership

Business of trading in any securities and/or acting as underwriter of any securities

Set by IIROC UDP – CEO

CCO – Officer or partner. Set by IIROC

Set by IIROC Set by IIROC

Note: CSA/SROs to require all registrants to prepare financial statements in

accordance with IFRS as of January 1, 2011

KYC, suitability and relationship disclosure set by IIROC

Referral arrangements and client disclosure set by NI 31-103

Accurately record business and demonstrate compliance Keep records for 7 years and in format so that they can be read by regulator

Quarterly statements of account to clients – monthly if account activity or on client request Trade confirmations set by IIROC

System of controls and supervision: compliance with securities legislation and manage business risks Written policies and procedures

Identify and respond to conflicts of interest

Complaint handing procedures

Dispute resolution or mediation services, and disclosure to clients

Mutual Fund

Dealer

MFDA Membership

Business of trading in mutual fund securities

CIFE, CSCE or IFICCE or advising rep (portfolio manager) proficiency

UDP – CEO CCO - Officer or partner with rep proficiency plus PDO Exam or MFDCE or CCO (portfolio manager) proficiency

Set by MFDA Set by MFDA

Note: CSA/SROs to require all registrants to prepare financial statements in accordance with IFRS as of January 1, 2011

Suitability and relationship disclosure set by MFDA KYC set by NI 31-103 Referral arrangements and client disclosure set by NI 31-103

as for investment dealers but no monthly statements and trade confirmations set by MFDA

as for investment dealers as for investment dealers

Scholarship

Plan Dealer

Business of trading in scholarship plan securities

RESPDAC sales rep exam

UDP – CEO CCO – Officer or partner with rep proficiency plus PDO Exam and RESPDAC Branch Manager Proficiency Exam

Capital – $50K Insurance – based on formula with minimum of $50K per employee, agent and dealing representative or $200K (whichever is less)

Annual audited and Form 31-103F1 within 90 days of year end and quarterly unaudited and Form 31-102F1 within 30 days of quarter end

Note: CSA to require all registrants to prepare financial statements in accordance with IFRS as of January 1, 2011

KYC, suitability and relationship disclosure Referral arrangements and client disclosure

No suitability or relationship disclosure for “permitted clients” who waive requirements

as for investment dealers, with trade confirmations set by NI 31-103 and annual (not quarterly) statements of account to clients

as for investment dealers as for investment dealers

Exempt Market

Dealer

Business of trading in prospectus exempt securities (including securities that are quali-fied under a prospectus, but could have been sold pursuant to exemptions) or acting as underwriter of prospectus exempt securities

N/A in British Columbia, Alberta, Manitoba and the territories for EMDs entitled to rely on local exemptions

CSCE, EMPE or advising rep (portfolio manager) proficiency

UDP – CEO CCO – Officer or partner with rep proficiency plus PDO Exam or CCO (portfolio manager) proficiency

as for scholarship plan dealers

Annual audited and Form 31-103F1 within 90 days of year end

Note: CSA to require all registrants to prepare financial statements in

accordance with IFRS as of January 1, 2011

as for investment dealers with trade confirmations set by NI 31-103

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ADVISERS (PORTFOLIO MANAGERS) AND INVESTMENT FUND MANAGERS

Portfolio

Manager

Business of advising others in any

securities

Advising Rep:

(i) CFA and

12 months “relevant investment

management” experience or (ii) CIM and 48 months of “relevant investment management” experience

Associate Advising Rep: Level 1 of CFA or CIM and

24 months of experience

UDP – CEO CCO – Officer or partner, with (i) CFA, CA, CGA, CMA, Québec Notary or lawyer with CSCE and PDO Exam and 3 years specified experience or (ii) CSCE and PDO Exam and employed by (a) registrant (adviser or investment dealer) for 5 years, including 3 years in compliance or (b) employed by financial institution for 5 years in portfolio management comp-liance and 1 year by registered dealer or adviser or (iii) advising rep proficiency and PDO Exam

Capital – $25K Insurance – $50K if not holding or access to client assets. If hold or have access to client assets, based on formula with minimum of $200K

Annual audited and Form 31-103F1 within 90 days of year end

Note: CSA to require all registrants to prepare financial statements in accordance with IFRS as of January 1, 2011

as for scholarship plan dealers, but exemption allowing no provision of relationship disclosure to “permitted clients” who waive the requirements only applies if portfolio manager does not act as an adviser to permitted client’s managed account

as for mutual fund dealers, but no trade confirmations

as for investment dealers

Investment

Fund Manager

Acting as investment fund manager

N/A UDP – CEO

CCO – Officer or partner with (i) CFA, CA, CGA, CMA, Québec Notary or lawyer with CSCE and PDO Exam and specified investment management experience (of either 3 or 4 years) or (ii) CIFE, CSCE or IFICCE, PDO Exam and 5 years experience with a registrant or an investment fund manager, including 3 consecutive years in compliance capacity or (iii) portfolio manager CCO proficiency

Capital – $100K Insurance – based on formula with a minimum of $200K

for scholarship plan dealers, with annual and quarterly description of any NAV adjustments Note: CSA to require all registrants to prepare financial statements in accordance with IFRS as of January 1, 2011

None, other than in respect of referral arrangements and client disclosure

as for portfolio managers, but no

required client reporting

None

Fitness for Registration

Client Relationships, Compliance, Internal Controls

Advising

Representative

UDP and CCO

Minimum Capital

Financial

Account

Recordkeeping

Compliance

Complaint

Proficiency

and Insurance

Reporting

Opening

and Reporting

Systems

Handling

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T R A N S I T I O N

6 BORDEN LADNER GERVAIS LLP

INVESTMENT MANAGEMENT ADVISORY

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Rep.

UDP and CCO

Minimum Capital

Financial

Account

Recordkeeping

Compliance

Complaint

Proficiency

and Insurance

Reporting

Opening

and Reporting

Systems

Handling

Investment

Dealer

IIROC Member

Mutual Fund

Dealer

MFDA Member

Scholarship

Plan Dealer

Exempt Market

Dealer

Firms operating as of September 28, 2009

must apply for registration as EMD by

September 28,

2010

Portfolio

Manager

Investment Fund

Manager

Firms operating as of September 28, 2009

must apply for registration as IFM by

September 28, 2010

No transition Designate UDP and

apply to register CCO and UDP – December 28, 2009

No transition No transition No transition, but transition

for relationship disclosure set by IIROC and transition until March 28, 2010 for referral arrangements (both existing and new)

No transition No transition No transition, except for

dispute resolution or mediation services – September 28, 2011

No transition Existing reps grandfathered

as for investment dealers, but with transition for new CCOs proficiency until September 28, 2010 Existing CCOs grandfathered

No transition No transition No transition, but transition

for relationship disclosure set by MFDA and transition until March 28, 2010 for referral arrangements (both existing and new)

No transition, but transition for quarterly statements of account for clients until September 28, 2011

No transition

September 28, 2010

Existing registrants (LMDs): September 28, 2010

New applicants: comply when applying for registration

as for mutual fund dealers

New capital requirements: September 28, 2010 New insurance requirements: March 28, 2010

No transition No transition for KYC and

suitability

Transition for referral

arrangements: March 28, 2010 Transition for relationship disclosure: September 28, 2010

No transition No transition

as for mutual fund dealers for existing LMDs

as for scholarship plan dealers for existing LMDs New applicants: comply when applying for registration

No transition for existing LMDs New applicants: comply when applying for registration

as for scholarship plan dealers for existing LMDs New applicants: comply when applying for registration

No transition for existing LMDs

as for mutual fund dealers

No transition as for scholarship plan

dealers

No transition

N/A Comply when applying

for registration Deadline: September 28, 2010

Comply when applying for registration Deadline: September 28, 2010 Comply when applying for registration Deadline: September 28, 2010

Comply when applying for registration

Deadline: September 28, 2010

No transition as for investment dealers

N/A

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BLG’

S

I

NVESTMENT

M

ANAGEMENT

G

ROUP

TheInvestment Management Groupat Borden Ladner Gervais LLPconsists of a team of over 50 lawyers located in offices across Canada who understand the business, regulatory and administrative issues that face participants in the Canadian investment management industry. We have the largest and most experienced investment management practice in Canada, having provided legal services to Canadian and international industry participants for over 50 years.

Our lawyers are leaders in investment funds, registrant regulation and compliance, private pooled and hedge funds and structured products. BLG's Investment Management Group is ranked Number 1 in Canada in The Best Lawyers in Canada(2008 and 2009). Several of our lawyers are recognized as leaders in the area of investment funds in industry publications, including:

• Guide to Leading 500 Lawyers in Canada (Lexpert/American Lawyer) • Canadian Legal Lexpert Directory

• Best Lawyers in Canada

• Who’s Who Legal The International Who’s Who of Business Lawyers • PLC Cross border Investment Funds Handbook

Our clients, both Canadian and international, include open and closed-end investment fund complexes, providers of alternative investment, pooled and private equity products, investment advisers and dealers, financial institutions, service providers, securities regulators, self-regulatory organizations and industry trade associations.

Our lawyers have long-standing working relationships with the Canadian securities regulators, including self-regulatory organizations and other government officials, as well as with The Investment Funds Institute of Canada, the Investment Counsel Association of Canada, other industry trade associations and key industry leaders.

Our goal at BLG is quite simple: to provide our clients with the best service, by the best professionals. At BLG, it begins with service.

Our approach to professional and service excellence is based upon personal standards of absolute integrity, unfailing mutual respect and dedication in all that we do for our clients.

BLG is a leading, full-service, integrated national law firm focusing on business law, litigation and intellectual property solutions for our clients. With more than 750 lawyers, intellectual property agents and other professionals in Vancouver, Calgary, Toronto, the Waterloo Region, Ottawa and Montréal, clients turn to BLG for assistance with their legal needs, from major litigation to corporate finance and patent registration.

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BLG’

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TORONTO OFFICE

LAWYER

TELEPHONE

E-MAIL

National Leader John E. Hall 416.367.6643 [email protected]

Regional Leader Lynn M. McGrade 416.367.6115 [email protected] John F.T. Warren 416.367.6276 [email protected] Robert P. Hutchison 416.367.6212 [email protected] Paul G. Findlay 416.367.6191 [email protected] Alfred L.J. Page 416.367.6020 [email protected] Richard E. Austin 416.367.6147 [email protected] Rebecca A. Cowdery 416.367.6340 [email protected] Carol E. Derk 416.367.6181 [email protected] Ronald M. Kosonic 416.367.6621 [email protected] Marsha P. Gerhart 416.367.6042 [email protected]

Manoj Pundit 416.367.6577 [email protected]

Prema K.R. Thiele 416.367.6082 [email protected] Dolores Di Felice 416.367.6128 [email protected] Brian D. Behrman 416.367.6652 [email protected] Kyle S. Pohanka 416.367.6218 [email protected] Laurie J. Cook 416.367.6639 [email protected] Donna Spagnolo 416.367.6236 [email protected] Michael C. DeCosimo 416.367.6222 [email protected] Kathryn M. Fuller 416.367.6731 [email protected]

Erin C. Seed 416.367.6351 [email protected]

Sarah K. Gardiner 416.367.6221 [email protected]

Julie Hesse 416.367.6224 [email protected]

Neda Bizzotto 416.367.6066 [email protected] Matthew P. Williams 416.367.6261 [email protected]

K. Ruth Liu 416.367.6383 [email protected]

William J. E. Jones 416.367.6346 [email protected] Francesca Smirnakis 416.367.6443 [email protected] Jessica Stern 416.367.6604 [email protected] Leigh-Ann Ronen 416.367.6616 [email protected]

Senior Advisor Barry J. Myers, FCA 416.350.2633 [email protected]

Tax Group Craig J. Webster 416.367.6149 [email protected] Stephen J. Fyfe 416.367.6650 [email protected] Laura M. White 416.367.6268 [email protected] Natasha Miklaucic 416.367.6233 [email protected]

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BLG’

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MONTRÉAL OFFICE

LAWYER

TELEPHONE

E-MAIL

Regional Leader François Brais 514.954.3143 [email protected]

Fred Enns 514.954.2536 [email protected]

Louis Clément 514.954.2524 [email protected]

Anick Morin 514.954.2532 [email protected]

Christian Faribault 514.954.2501 [email protected]

Élise Renaud 514.954.3168 [email protected]

Réda Ray Saad 514.954.2541 [email protected]

Tax Group Virginie Chan 514.954.3160 [email protected]

VANCOUVER OFFICE

LAWYER

TELEPHONE

E-MAIL

Regional Leader Jason J. Brooks 604.640.4102 [email protected] H. Scott McEvoy 604.640.4170 [email protected] G. Eric Doherty 604.640.4193 [email protected] Jennifer Wilson 604.640.4148 [email protected] Michael Waters 604.632.3476 [email protected] Stephen P. Robertson 604.632.3473 [email protected]

OTTAWA OFFICE

LAWYER

TELEPHONE

E-MAIL

Regional Leader Jeremy S.T. Farr 613.787.3511 [email protected]

Tim McCunn 613.787.3532 [email protected]

R. Steve Thomas 613.787.3539 [email protected]

Tax Group Bernie G. Roach 613.787.3523 [email protected]

CALGARY OFFICE

LAWYER

TELEPHONE

E-MAIL

Regional Leader Brad J. Pierce 403.232.9421 [email protected] Angie Redecopp 403.232.9504 [email protected]

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Borden Ladner Gervais LLP Lawyers•Patent & Trade-mark Agents C a l g a r y

1000 Canterra Tower 400 Third Avenue S.W. Calgary, Alberta, Canada T2P 4H2

tel: 403 232-9500 fax: 403 266-1395

M o n t r é a l

1000 de La Gauchetière Street West

Suite 900, Montréal, Québec, Canada H3B 5H4 tel: 514 879-1212

fax: 514 954-1905

O t t a w a

World Exchange Plaza 100 Queen St., Suite 1100 Ottawa, Ontario, Canada K1P 1J9

tel: 613 237-5160 1-800-661-4237 legal fax: 613 230-8842

IP fax: 613 787-3558

To r o n t o

Scotia Plaza, 40 King Street West Toronto, Ontario, Canada M5H 3Y4

tel: 416 367-6000 fax: 416 367-6749

V a n c o u v e r

1200 Waterfront Centre 200 Burrard Street, P.O. Box 48600

Vancouver, British Columbia, Canada V7X 1T2

tel: 604 687-5744 fax: 604 687-1415

W a t e r l o o R e g i o n

Waterloo City Centre 100 Regina Street South, Suite 220

Waterloo, Ontario, Canada N2J 4P9 tel: 519 579-5600 fax: 519 579-2725 IP fax: 519 741-9149

www.blgcanada.com

Borden Ladner Gervais LLP is an Ontario Limited Liability Partnership

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