On August 31, 2023, the Canadian Securities Administrators ("CSA") announced the repeal of National Instrument 81-104 Alternative Mutual Funds (“NI 81-104”) in all jurisdictions except Québec.

As part of the CSA’s Modernization of Investment Fund Product Regulation Project, the sections of NI 81-104 that previously set out a regulatory regime for alternative mutual funds were repealed in 2018, and most operational aspects of NI 81-104 were migrated to National Instrument 81-102 Investment Funds. As a result, only the proficiency and supervisory requirements for mutual fund restricted individuals trading in securities of alternative mutual funds remain in the current version of NI 81-104.

However, as we discussed in a previous post, the proficiency requirements in NI 81-104 pre-date the introduction of the alternative mutual funds regime, and the CSA issued blanket relief to provide additional course options for individuals seeking to meet applicable proficiency requirements. As the blanket orders have now been codified in the Canadian Investment Regulatory Organization’s (“CIRO’s”) Interim Mutual Fund Dealer Rule 1000 Proficiency Standards for the Sale of Alternative Mutual Funds, the CSA have determined that NI 81-104 is no longer necessary.

In Québec, the Autorité des marchés financiers (“AMF”) intends to continue to rely on the local blanket order in respect of the applicable proficiency requirements. The AMF has indicated that it will consider repealing NI 81-104 and revoking the local blanket order once it undertakes a transition plan for Québec’s mutual fund dealer membership in CIRO.

Provided that all ministerial approvals are obtained, the repeal of NI 81-104 will come into force on January 29, 2024.

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