Securities regulators have granted an exemption from part of the sales practices rule, allowing the fund companies that are members of the Canadian Institute for Financial Planners to subsidize its educational conferences, subject to certain conditions.

According to the OSC Bulletin, the securities commissions received an application from the CIFPs on behalf of each member of the organization to permit the firms to pay a portion of its direct costs incurred in organizing and presenting its annual national conference, held in June, and other future educational events.

The relief was necessary because the Investment Funds Institute of Canada, which sponsored the creation of the CIFPs, is now no longer affiliated with it. And, the existing sales practices rule includes an exemption to permit fund firms to pay to IFIC direct costs relating to a conference or seminar, subject to certain conditions.

The members of the CIFPs have agreed to reimburse to CIFPs a portion of the direct costs it incurred for staging its annual conference, and for its future educational events. These payments will comply with the conditions set out in the rule, including: the primary purpose is the provision of educational information about financial planning, and matters relating to mutual funds and related products; none of the firms will pay more than 10% of the total direct costs; the selection of a representative of a participating dealer to attend the conference is made exclusively by the dealer; and, the events are held in Canada or the continental United States.

The exemption was granted so long as the fund firms comply with the conditions set out in the rule. Also, the relief will terminate one year after the rule is changed to make the relief unnecessary or provides similar relief on a different basis or subject to different conditions.