At the Nova Scotia Securities Commission, we regularly get questions about categories of registration. This includes questions surrounding what the categories are, and what they allow a person to offer and not offer. Instead of rolling out a lengthy post running down all of the categories of registration we’ve decided to split it up and highlight one each week for the next month. Today we’ll start with scholarship plan dealers.
Anyone registered as a scholarship plan dealer is only licensed to sell securities of a scholarship plan. This makes what they can sell very limited and they are the most limited of all the registration categories.
A scholarship plan dealer pools contributions from numerous investors into a Registered Education Saving Plan (RESP)to invest in scholarship plan units. When you join a group plan you agree to buy a set number of plan units. These units represent your share of the plan, and the maturity date of the plan is determined by your child’s birth date.
To maintain your standing and place in the plan you must make regular contributions. Failure to make your contributions can result in you being assessed financial penalties or be terminated from the group. As long as you stay in the plan until it matures you receive a portion of the pool’s earnings to put toward your child’s post-secondary education.
Each plan can have its own specific rules so before investing in a scholarship plan make sure you thoroughly review the rules and prospectus to make sure the plan is right for you and your investing goals.