An order execution only service dealer (“OEO Dealer”), i.e., one that does not make a suitability determination before arranging for a client to invest in a mutual fund is permitted, as a temporary (e.g., until May 31, 2025) exemption to a ban (imposed effective June 1, 2022) on OEO Dealers from being paid trailer fees by a mutual fund or its manager, to receive a trailing commission from the mutual fund or dealer in order to facilitate the OEO Dealer paying a rebate of such amount to its clients who held their investment in the mutual fund prior to June 1, 2022, or who transferred their mutual fund units into OEO Dealer accounts on or after June 1, 2022 (an “OEO Rebate”). The Directorate stated:
[W]here an OEO Rebate is paid by an OEO Dealer to a unitholder in a trust, in the [above] circumstances … it is likely that the OEO Rebate would be considered to be in respect of the activities of the trust or in respect of an expense of the trust. In the result, subsection 12(2.1) would likely be considered to apply and the amount of the OEO Rebate included in the income of the trust pursuant to paragraph 12(1)(x).