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CSA Notice of AmendmentsSupplement to the OSC Bulletin imposing a statutory fiduciary duty when a client grants discretionary authority in those jurisdictions which donot currently have this provision; clarifying the role of ultimate designated persons and chief compliance officers; reviewing titles and designations; reviewing referral arrangements; revisiting the provision, originally included in the Proposals, relating to publicly available information.Summary of Written Comments Received by the CSADuring the comment period, we received submissions from 135 commenters. We have considered the comments received andthank all of the commenters for their input. A summary of comments together with our responses is set out in Annex B. Thenames of commenters are contained in Annex C – List of commenters.Copies of the comment letters were posted on the following websites: the Alberta Securities Commission at www.albertasecurities.com the Autorité des marchés financiers at www.lautorite.qc.ca the Ontario Securities Commission at www.osc.gov.on.caSummary of Changes to the ProposalsIn developing the Amendments, we carefully reviewed the comments that we received on the Proposals. Public comments makea valuable contribution to the rulemaking process. This includes finding the right balance between achieving regulatory goalsand the associated burdens. We found some of the comments recommending changes to be persuasive and revised theProposals accordingly. We believe we have achieved an appropriate balance, keeping the core elements of the CFRs intactafter streamlining the Proposals to remove obstacles to effectively operationalizing them. Ultimately, these measures will helpachieve the investor protection goals of the CFRs.Among the more notable changes, which are summarized below, we have, added a materiality qualifier in the conflicts of interest provisions, removed prescriptive restrictions on referral arrangements, removed the proposed new provision for publicly available information, and made changes to parts of the Rule and added guidance in the Companion Policy to help registered firms toscale the CFRs to their particular operations.In addition to these notable changes, the Amendments also include other changes to the Rule and revisions to the guidance inthe Companion Policy, which are primarily intended to clarify the interpretation of the new requirements.The changes to the Proposals and our reasons for making them are discussed in more detail in Annex B.Referral arrangements We removed the proposed restrictions on referral arrangements and referral fees (existing requirements relatingto referral arrangements remain in place and the enhanced standard for conflicts of interest will apply to referralarrangements).Publicly available information October 3, 2019We removed the proposed requirement to make certain information publicly available.3(2019), 42 OSCB (Supp-1)

CSA Notice of AmendmentsSupplement to the OSC BulletinConflicts of Interest We added a materiality threshold with respect to conflicts of interest, and guidance to explain when a conflict ofinterest is “material”. We removed the proposed prohibitions on acting as a power of attorney or trustee for clients.Suitability We removed certain proposed suitability assessment factors from the express list in the Rule requirement,addressing them, instead, with guidance in the Companion Policy, includingothe features and associated costs of the account type made available to the client, andothe overall concentration and liquidity across all of the client’s accounts at the firm. We removed the proposal to include “any other factor that is relevant under the circumstances”. We expanded the existing exemption for permitted clients so that non-individual permitted clients can waivesuitability determinations for managed accounts. We removed proposed guidance suggesting that a registrant should inquire about a client’s other investmentsor holdings held elsewhere in order to inform the registrant’s suitability determination. We also removed the proposed statement in the Companion Policy that “Unless a registrant has a reasonablebasis for determining that a higher cost security will be better for a client, we expect the registrant to trade, orrecommend, the lowest cost security available to the client in the circumstances that meets the requirements ofsubsection 13.3(1)”. We removed the proposed Rule requirement to update KYC if the registrant reasonably ought to know of asignificant change in the client’s information (the requirement will still apply if the registrant becomes aware ofa significant change). We made the KYC gathering exemption for non-individual permitted clients consistent with the expandedexemption in the suitability provisions. We added Companion Policy guidance to clarify how the KYC requirements can apply to registrants’ differentbusiness models. We added Companion Policy guidance to more fully address the scalability of the KYP requirements, dependingon the nature and complexity of the securities involved. We removed the following from the proposed Rule changes:KYCKYPOctober 3, 2019othe requirement that a registered firm must perform a comparison between the securities it makesavailable to clients and other similar securities in the market;oprescriptive requirements in respect of securities transferred in (instead, we explain in guidance thatregistrants must take reasonable steps to understand transferred in securities within a reasonable timeafter their transfer);othe requirement that a registered firm must monitor and reassess a security (firms are only required tomonitor for significant changes);othe requirement that registered individuals must take reasonable steps to understand, at a generallevel, each type of security available to clients, and how those securities compare;othe requirement that a registered firm must maintain an offering of securities and services that isconsistent with how the firm holds itself out (instead, we discuss holding out in the guidance relating tomisleading communications);4(2019), 42 OSCB (Supp-1)

CSA Notice of AmendmentsoSupplement to the OSC Bulletinthe requirement that a registrant must understand the returns of a security (the Companion Policyguidance notes that under the KYP provisions, registrants should understand the basis of the security’sreturn, among other factors).RDI We clarified that the required discussion of any limitations on products and services offered to a client is onlyrequired to be at a general level. We expanded the requirement to provide a general description of the products or services a registered firm willoffer to clients in order to make it clear that the description must include reference to any restrictions on theclient’s ability to liquidate or resell a security. We removed restrictions on the products offered to a client (such as only offering proprietary products) from theimpacts that must be discussed with clients. We clarified that the required discussion of impacts of fees and charges on a client’s investment returns is onlyrequired to be at a general level and relates to potential impacts.TransitionWe are providing for a phased transition period, with the Amendments relating to conflicts of interest and the associated RDIprovisions taking effect on December 31, 2020, and the remaining Amendments taking effect on December 31, 2021. Registrantswill have to comply with the applicable Amendments after those dates. There are no grandfathering provisions.We will establish an implementation committee to provide guidance, respond to questions and otherwise assist registrants tooperationalize the Amendments.We wish to make it clear that it is not our expectation that current registrants would have to update all existing clients’ KYCinformation and reassess the suitability of their investments as of the effective date of the relevant Amendments (December 31,2021) or immediately after that date. We would expect registrants to continue to schedule reassessments in accordance withcurrent requirements up until then, and to schedule reassessments in accordance with the triggers in the Amendments after thatdate.List of AnnexesThis notice contains the following annexes: Annex A – Summary of changes to the InstrumentAnnex B – Summary of comments on the Proposals and responsesAnnex C – List of commentersAnnex D – Adoption of the AmendmentsAnnex E – Amendments to NI 31-103Annex E1 – Blackline showing changes to NI 31-103Annex E2 – Blackline showing changes to 31-103CPThis notice will also be available on the following websites of CSA .caOctober 3, 20195(2019), 42 OSCB (Supp-1)

CSA Notice of AmendmentsSupplement to the OSC BulletinQuestionsPlease refer your questions to any of the following:Isaac FilatéSenior Legal CounselCapital Markets RegulationBritish Columbia Securities Commission604-899-6573 and 1-800-373-6393ifilate@bcsc.bc.caBonnie KuhnSenior Legal CounselMarket RegulationAlberta Securities Commission403-355-3890bonnie.kuhn@asc.caLiz KutarnaDeputy Director, Capital MarketsSecurities DivisionFinancial and Consumer Affairs Authority of Saskatchewan306-787-5871liz.kutarna@gov.sk.caChris BeskoDirector, General CounselThe Manitoba Securities Commission204-945-2561 and 1-800-655-5244(Toll Free (Manitoba only))chris.besko@gov.mb.caDebra FoubertDirector, Compliance and Registrant RegulationOntario Securities Commission416-593-8101dfoubert@osc.gov.on.caChris JepsonSenior Legal CounselOntario Securities Commission416-593-2379cjepson@osc.gov.on.caErin SeedSenior Legal CounselOntario Securities Commission416-596-4264eseed@osc.gov.on.caKat SzybiakSenior Legal CounselOntario Securities Commission416-593-3686kszybiak@osc.gov.on.caMartin PicardAnalyste expert à l’encadrement des intermédiairesAutorité des marchés financiers514 395-0337 and 1 877 525-0337martin.picard@lautorite.qc.caOctober 3, 20196(2019), 42 OSCB (Supp-1)

CSA Notice of AmendmentsSupplement to the OSC BulletinSophie JeanDirectrice de projets, Encadrement des intermédiairesAutorité des marchés financiers514-395-0337 and 1-877-525-0337sophie.Jean@lautorite.qc.caSandrine SieweAnalyste, Direction de l’encadrement des intermédiairesAutorité des marchés financiers514-395-0337 and 1-877-525-0337sandrine.siewe@lautorite.qc.caChris PottieDeputy Director, Registration & ComplianceNova Scotia Securities even DowlingActing DirectorConsumer, Labour and Financial Services DivisionJustice and Public SafetyGovernment of Prince Edward Island902-368-4551sddowling@gov.pe.caJason AlcornSenior Legal Counsel and Special Advisor to the Executive DirectorFinancial and Consumer Services Commission of New Brunswick506-643-7857jason.alcorn@fcnb.caJohn O’BrienSuperintendent of SecuritiesService NLGovernment of Newfoundland and Labrador709-729-4909johnobrien@gov.nl.caJeff MasonDirector of Legal RegistriesDepartment of Justice, Government of Nunavut867-975-6591jmason@gov.nu.caThomas HallSuperintendent of SecuritiesDepartment of JusticeGovernment of the Northwest Territories867-767-9305tom hall@gov.nt.caRhonda HorteDeputy SuperintendentOffice of the Yukon Superintendent of r 3, 20197(2019), 42 OSCB (Supp-1)

Annex A: Summary of Changes to the InstrumentSupplement to the OSC BulletinANNEX ASUMMARY OF CHANGES TO THE INSTRUMENTThis annex summarizes the changes that the Amendments will make to the current versions of the Rule and Companion Policy.In addition to the changes summarized in this annex, the Amendments also include technical drafting changes and clarifications.ExemptionsThe following exemptions will continue in effect or have been expanded: certain KYC requirements and the suitability determination obligation do not apply in respect of certain permittedclients if they have consented; suitability and related KYC requirements do not apply to registrants dealing with clients in the context of orderexecution-only services (which are subject to IIROC member rules), or to trades directed by portfolio managers; investment fund managers are exempted from the following provisions, unless they are acting under anadditional registration in a dealer or adviser category oKYC,oKYP, andosuitability determination;conflicts of interest obligations set out in sections 13.4 and 13.4.1 do not apply to investment fund managers inrespect of investment funds that are subject to National Instrument 81-107 Independent Review Committee forInvestment Funds.Custody obligations for mutual fund dealers registered in Québec – Part 9 [Membership in an SRO]For clarity, we are adding provisions to section 9.4 to the effect that mutual fund dealers registered in Québec that are MFDAmembers may rely on certain of the exemptions for MFDA members in subsections 9.4(1) and (2) relating to custody of assets,provided the registered firm complies with the corresponding MFDA provisions.Internal controls and systems – Part 11The Amendments include changes to the requirements for training and record-keeping corresponding to the new and enhancedrequirements in respect of KYC, KYP, suitability determinations and conflicts of interest. Section 11.1 [Compliance system and training] is expanded to require registered firms to provide training to theirregistered individuals on compliance with securities legislation, includingothe KYC, KYP and suitability determination obligations, andoconflicts of interest requirements.Section 11.5 [General requirements for records] is expanded to include requirements forodemonstrating compliance with KYP requirements,odemonstrating how the firm has addressed, or plans to address, conflicts of interest identified undersubsections 13.4 and 13.4.1 in the best interest of its clients,odocumenting October 3, 2019the firm’s sales practices, compensation arrangements and incentive practices, and8(2019), 42 OSCB (Supp-1)

Annex A: Summary of Changes to the Instrument oSupplement to the OSC Bulletinother compensation arrangements and incentive practices which may benefit the firm, itsregistered individuals or any affiliate or associate of the firm, anddemonstrating compliance with requirements relating to misleading communications.We have added some guidance in the Companion Policy setting out our expectations concerning firms’ training programs,particularly with respect to the addressing of conflicts of interest in the best interests of their clients, as well as guidance concerningpolicies and procedures relating to the new record-keeping requirements.KYC – section 13.2The Amendments expand the KYC requirements in section 13.2 [Know your client] to support the enhanced suitabilitydetermination requirement by clarifying the content and scope of the KYC process. 13.2(2)(c) – expands the list of KYC information that must be collected by registrants in order for them tounderstand their clients well enough to meet their suitability determination obligations. The additional informationrequired includes the client’sopersonal circumstances (not limited to financial circumstances),oinvestment knowledge,orisk profile (guidance clarifies that this includes both the client’s risk tolerance and their risk capacity),andoinvestment time horizon. 13.2(3.1) – new subsection requiring registrants to take reasonable steps to obtain clients’ confirmation of theaccuracy of their KYC information. 13.2(4) – expands requirement to keep KYC information current to expressly require updating the client’sinformation if the registrant become aware of a significant change. 13.2(4.1) – new subsection specifying minimum intervals when a client’s KYC information must be reviewed: o12 months for managed accounts;o12 months before making a trade or recommendation for exempt market dealers;o36 months for other cases.New guidance in the Companion Policy discusses, among other things,othe ways a registrant may tailor its KYC process to reflect its business model and the nature of itsrelationships with clients,ousing technology for the collection of KYC information, andoour expectations with respect to the KYC information that must be collected by registrants to meet therequirements in the Rule on an ongoing basis.KYP – new section 13.2.1There is currently no explicit Rule requirement concerning KYP, while the Companion Policy currently provides only limitedprinciples-based guidance on our KYP expectations in the context of the proficiency and suitability requirements. The Amendmentsintroduce an express KYP Rule requirement in new section 13.2.1 [Know your product]. Like the enhanced KYC requirements,this is intended to support an enhanced suitability determination obligation. 13.2.1(1) – obligation of registered firms to take reasonable steps to ensure that the securities that they makeavailable to clients areoOctober 3, 2019assessed with regard to their relevant aspects, including for their structure, features, risks, initial andongoing costs, and the impact of those costs,9(2019), 42 OSCB (Supp-1)

Annex A: Summary of Changes to the InstrumentSupplement to the OSC Bulletinoapproved to be made available to clients, andomonitored for significant changes. 13.2.1(2) – obligations of registered individuals to take reasonable steps to understand the securities that theypurchase, sell or recommend to a client, including the impact of the initial and ongoing costs associated withacquiring and holding each security, sufficient to enable them to make a suitability determination. 13.2.1(3) – registered individuals must only purchase or recommend securities approved by their firm to bemade available to clients.The Companion Policy codifies our KYP expectations of firms and registrants as set out in previous CSA and SRO guidance. Italso sets out our views on how firms can tailor their processes for meeting the KYP obligation depending on a firm’s business model, a security’s type, whether other registrants are also involved in a security’s distribution to the client, and whether a security is being transferred in.Suitability determination – section 13.3The Amendments enhance the suitability determination obligation in section 13.3 [Suitability determination] with, among otherthings, a new core requirement that registrants must put their clients’ interests first when making a suitability determination. 13.3(1) – current suitability requirement replaced with new subsection providing that before a registrant opensan account for a client, purchases, sells, deposits, exchanges or transfers securities for a client’s account, takesany other investment action for a client, or makes a recommendation or exercises discretion to take any suchaction, the registrant must determine, on a reasonable basis, thatoo October 3, 2019the action is suitable for the client, based on the following factors: KYC information; the registrant’s assessment or understanding of the security; the impact of the action on the account, including its concentrat

Reforms to Enhance the Client-Registrant Relationship (Client Focused Reforms) October 3, 2019 Introduction The Canadian Securities Administrators (the CSA or we) are adopting amendments (the Amendments) to National Instrument 31-103 Registration Requirements, Exemptions and Ongoing Registrant Obligations (NI 31-103 or the Rule) and Companion