Sceptre Investment Counsel Ltd. has received relief from the Ontario Securities Commission exempting it from dealer registration requirements for trades with its managed accounts and funds of funds. The exemption also lets Sceptre continue its wholesaling and marketing activities.
Sceptre is registered both an advisor and as a mutual fund dealer, and it has applied for registration as a limited market dealer in Ontario. Sceptre Mutual Fund Dealer Inc., a wholly owned subsidiary, is registered as a mutual fund dealer and has been granted membership in the Mutual Fund Dealers Association.
Once the fund dealer subsidiary is registered as a mutual fund dealer in each jurisdiction, Sceptre will assign all of its accounts to it, except Sceptre’s managed accounts and fund of fund trades.
Sceptre will then voluntarily surrender its registration as a mutual fund dealer. It had sought regulatory relief to allow it to continue wholesaling and distributing units to its managed accounts and fund of funds without having to maintain its MFDA membership.
“The effect of the MFDA’s membership rules is to preclude a mutual fund dealer such as Sceptre from conducting its principal business of acting as an investment counsel and accepting discretionary portfolio management mandates,” notes the OSC’s decision. The OSC granted the relief with certain conditions.