January 11, 1994
TO: BOARD OF GOVERNORS NO. 6-94
INTERNATIONAL MEMBERS NO. 1-94
INVESTMENT ADVISER MEMBERS NO. 2-94
RE: ONTARIO TO PERMIT NON-RESIDENT FUND MANAGERS
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As you may know, the Institute has been working in recent months to
obtain an interpretation of Ontario law that would permit a U.S. investment
adviser with no Canadian business presence to manage a publicly-offered
Canadian mutual fund. In this regard, the Institute submitted a letter to and
met with Ontario Securities Commission ("OSC") staff last June to urge a
modification of the requirement that only a Canadian resident firm may
register as an investment counsel/portfolio manager and manage a publicly-
offered mutual fund.
We are pleased to report that the OSC staff recently indicated to the
Institute that it will permit a U.S. resident adviser to register as an
investment counsel/portfolio manager if the adviser a) complies with all
applicable regulatory requirements and b) satisfies the OSC that an
appropriate level of proficiency is met. As a registered investment counsel/
portfolio manager, a U.S. adviser could sponsor and advise a publicly-offered
Canadian fund on a cross-border basis, i.e., without establishing an office in
Canada. We intend to make a second submission to the OSC proposing further
clarification of the specific regulatory and proficiency requirements that
would apply to non-resident U.S. advisers.
We will keep you informed of developments.
Matthew P. Fink