The Canadian Securities Administrators have approved a new national rule dealing with soft-dollar commissions, the CSA said Tuesday.

National Instrument 23-102 Use of Client Brokerage Commissions, which clarifies the obligations of advisors and dealers in the provision of goods and services other than order execution in connection with client brokerage commissions and introduces new disclosure requirements for advisors, is slated to take effect on June 30, 2010.

The soft dollar policy has been in formulation for several years. The CSA notes that several changes have been made to the rule since the latest proposal, which was published in 2008, intended to clarify and simplify the requirements of the instrument, and respond to comments received.

Among the changes, the CSA has decided to return to the temporal standard for order execution goods and services proposed in the 2006 proposal to more closely align with the U.S. Securities and Exchange Commission; and, it has decided not to proceed with proposed quantitative disclosure requirements, noting that this would go further than the SEC and other regulators, creating problems for firms that deal in other jurisdictions.

“It is extremely important that advisers take appropriate steps to ensure that they don’t place their interests ahead of those of their clients and that they provide their clients with proper disclosure where appropriate,” said Jean St-Gelais, chair of the CSA and president and CEO of the Autorité des marchés financiers.

Additionally, the CSA says that on October 9, it plans to publish for comment, consequential amendments to investment fund prospectus disclosure forms to “ensure consistency between the disclosure requirements… relating to client brokerage commissions and similar disclosure prescribed for investment funds.”

Those proposed amendments will be out for comment until January 7, 2010.

IE