Banking and insurance

In the Canadian banking, trust and loan company, and insurance sectors, there are no “passporting” arrangements with any other jurisdiction. As mentioned, foreign financial institutions are subject to specific rules under the Bank Act, the Trust and Loan Companies Act, and the Insurance Companies Act.

Securities and derivatives

For most foreign-based securities dealers, the most common exemption from registration under Securities Laws is the international dealer exemption (IDE). The IDE allows a foreign firm to offer certain trading in securities with "permitted clients," as defined in National Instrument 31-103, without being registered in the relevant Canadian jurisdictions, as long as the foreign firm is registered to perform such functions in its home jurisdiction and subject to certain conditions. The exemption allows international securities dealers to deal with certain Canadian-permitted clients as long as certain eligibility criteria are met and filing and fee payments are made. To qualify for the IDE, a foreign firm must satisfy all of the following requirements:

• The foreign firm's head office or principal place of business must be in another jurisdiction.
• The foreign firm must be registered under the securities legislation of that foreign jurisdiction in which its head office or principal place of business is located. Its category of registration in the foreign jurisdiction must permit it to carry on the activities of a dealer.
• The foreign firm must engage in the business of a dealer in the foreign jurisdiction in which its head office or place of business is located.
• The foreign firm must be trading as a principal or agent for any of the following:
  • The issuer of the securities
  • A permitted client
  • A person or company that is not a resident of Canada
• The foreign firm has submitted to the relevant Canadian securities regulatory authority a completed Form 31-103F2 Submission to Jurisdiction and Appointment of Agent for Service.
• Foreign firms that meet the requirements above are permitted to carry on the following registerable activities while relying on the international dealer exemption:
• An activity, other than a sale of a security, that is reasonably necessary to facilitate a distribution of securities that are offered primarily in a foreign jurisdiction
• A trade in a debt security with a permitted client if the debt security is: (i) denominated in a currency other than the Canadian dollar; or (ii) is or was originally offered primarily in a foreign jurisdiction and a prospectus has not been filed with a Canadian securities regulatory authority for the distribution
• A trade in a debt security that is a foreign security with a permitted client, other than during the security's distribution
• A trade in a foreign security with a permitted client, unless the trade is made during the security's distribution under a prospectus that has been filed with a Canadian securities regulatory authority
• A trade in a foreign security with an investment dealer
• A trade in any security with an investment dealer that is purchasing as principal

A similar exemption in Canada exists for foreign licensed investment advisers, and many of the requirements mentioned above apply in addition to others, mutatis mutandis.