Sell mutual funds? CSA may not grant AR registration

Sell mutual funds? Work for an IIROC dealer? Are you an investment banker?

You may not qualify to be registered as an Advising Representative of a portfolio manager, say the Canadian Securities Administrators.

Read: CSA paper highlights ugly truth

The CSA has issued a staff notice detailing why it accepts or rejects applications to become Advising Representatives (ARs) or Associate Advising Representatives (AARs), which have portfolio management duties.

It’s received more than 2,500 applications since September 2009.

Read: Prepare to be squeezed

Applicants must meet educational qualifications laid out in NI 31-103 as well as possess relevant investment management experience. The purpose of this notice was to further clarify what qualifies as relevant experience.

The litmus test is “sufficient experience performing securities research and analysis,” as well as whether the applicant is providing specific advice, says the notice.

So if your application to become an AR was rejected, here are some possible reasons:

• You’re an AAR without sufficient experience to qualify as an AR
• You only have client relationship management experience, but not enough securities analysis experience
• You don’t provide specific advice, and don’t develop investment policy statements for clients
• You have corporate finance experience but not portfolio analysis or securities selection experience
• You sell a limited number of portfolio solutions at an IIROC dealer (in this case, you may qualify as an AAR)
• You’re a consultant who doesn’t specifically research individual securities
• You only sell mutual funds

The notice stresses that if you provide specific advice to clients, you may require registration.

Read the full notice.

Melissa Shin

Melissa is the editorial director of Advisor.ca and leads Newcom Media Inc.’s group of financial publications. She has been with the team since 2011 and been recognized by PMAC and CFA Society Toronto for her reporting. Reach her at mshin@newcom.ca. You may also call or text 416-847-8038 to provide a confidential tip.