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ARTICLE · 17 JUNE 2022

Regulators Issue Temporary Exemptions From The OEO Trailer Ban

Stikeman Elliott LLP
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The Ontario Securities Commission (OSC) recently announced a temporary exemption from the order execution only (OEO) trailer ban in order to facilitate client transfers and rebates of trailing commissions.

CanadaCorporate/Commercial Law
Stikeman Elliott LLP
Stikeman Elliott LLP
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The Ontario Securities Commission (OSC) recently announced a temporary exemption from the order execution only (OEO) trailer ban in order to facilitate client transfers and rebates of trailing commissions. Other Canadian securities regulators, including the British Columbia Securities Commission and Alberta Securities Commission, have released similar exemptions.

As we've previously discussed, amendments to National Instrument 81-105 Mutual Fund Sales Practices that came into force on June 1, 2022 prohibit the payment of trailing commissions to, and the solicitation and acceptance of trailing commissions by, dealers that do not have an obligation to make a suitability determination. Such dealers include OEO dealers and dealers acting on behalf of a "permitted client" that has waived suitability requirements.

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