In July 2009, the Canadian Securities Administrators (“CSA”) published the details of a new national process for the registration of firms and individuals who deal in securities, provide investment advice or manage investment funds. The new process is a passport registration process and is being introduced by the CSA together with a new national registration regime for securities dealers and advisors. Both are part of the CSA’s larger Registration Reform Project. The Registration Reform Project aims to harmonize and streamline the different sets of registration rules that exist in each Canadian jurisdiction into one national regime.
The registration process is set out in a new policy, National Policy 11-204 Process for Registration in Multiple Jurisdictions (“NP 11-204”). NP 11-204 will replace and streamline the current National Registration System and establish the process for obtaining registration in multiple jurisdictions, including Ontario. The new registration regime will be covered by a new national instrument, National Instrument 31-103 Registration Requirements and Exemptions. Multilateral Instrument 11-102 Passport System will be amended to apply the passport system to the dealer and advisor community.
The new registration process will be a passport system, similar to the current passport system used in CSA jurisdictions for filing prospectuses. A key feature of the registration passport system is that it will allow individuals and firms to register in more than one Canadian jurisdiction by dealing only with a “principal regulator”, rather than dealing separately with the securities regulatory body of each jurisdiction in which they want to register.
All CSA jurisdictions, except Ontario, have approved the rule and policy amendments relating to the new passport registration system. CSA members in all provinces and territories (including Ontario) have approved a new policy containing procedures for registration in multiple jurisdictions. The policy also includes an interface system for firms and individuals registered in passport jurisdictions in Canada to also register in Ontario. Although the passport system will not be adopted in Ontario, the Ontario Securities Commission (“OSC”) can still act as the “principal regulator” under the passport system. This means that Ontario-based registrants will only need to deal with the OSC, even when they are also active in other parts of Canada.
Both the new registration regime and process will come into force on September 28, 2009.
If you have any questions about the new dealer/advisor registration process or related matters, contact any member of Clark Wilson LLP’s Corporate Finance & Securities Group.