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Bulletin #0327-P

Policy
MFDA Rule 2.4.1 (Payment of Commissions to Non-Registered Entities) - Suspension in Manitoba

Contact: Aamir
Mirza
BULLETIN #0327 – P
Senior Legal & Policy Counsel
September 16, 2008
Phone: 416-945-5128
E-mail: amirza@mfda.ca

MFDA Bulletin

Policy

For Distribution to Relevant Parties within your Firm

MFDA Rule 2.4.1 (Payment of Commissions to Non-Registered Entities) –
Suspension in Manitoba

The Manitoba Securities Commission (“MSC”) has made a Variation Order to the Terms and
Conditions of MFDA Recognition as a Self-Regulatory Organization in Manitoba to suspend
MFDA Rule 2.4.1 until such time as a decision or legislative amendments have been made with
respect to the payment of commissions to non-registered entities. MFDA Rule 2.4.1 requires
that any remuneration in respect of business conducted by an Approved Person on behalf of a
Member be paid by the Member (or an affiliate) directly to and in the name of the Approved
Person.

The securities regulatory authorities in British Columbia, Nova Scotia, Ontario and
Saskatchewan have suspended Rule 2.4.1 until December 31, 2008. As described in MFDA
Bulletin #0325-P, published on September 9, 2008, the MFDA has submitted an application to
the securities regulatory authorities in these jurisdictions to amend the Recognition Orders to
extend the suspension of Rule 2.4.1 to December 31, 2010. The application and related
documents were published for comment on August 29, 2008, with the comment period expiring
on September 29, 2008.

The Alberta Securities Commission has not suspended Rule 2.4.1 and, accordingly, commissions
must be paid directly to the registered salesperson. The New Brunswick Securities Commission
has made a Variation Order to suspend Rule 2.4.1 in New Brunswick until such time as a
decision or legislative amendments have been made with respect to the payment of commissions
to non-registered entities.

Further Information

The Manitoba Variation Order can be accessed through the MSC website at
http://www.msc.gov.mb.ca/legal_docs/orders/mfda_2.html.

DOCs#149988