MONTREAL, June 25, 2010 /CNW Telbec/ - The Canadian Securities Administrators (CSA) are seeking public comment on proposals to amend the regulatory framework for firms and individuals who deal in securities, provide investment advice or manage investment funds. The regulatory framework for registrants is contained in National Instrument (NI) 31-103 Registration Requirements and Exemptions and related instruments (the National Registration Rules).
The National Registration Rules came into force on September 28, 2009 and introduced a registration regime that is harmonized, streamlined and modernized. The proposed amendments are the result of the CSA's monitoring of the implementation of the National Registration Rules, including the CSA's continuing dialogue with stakeholders and its member jurisdictions' practical experience of working with the new registration framework. The CSA planned for early publication of amendments to address questions and practical issues during the initial implementation of the new regime.
"Investors will benefit from the proposed amendments to the registration regime, which includes enhanced requirements for consumer disclosure and handling investor complaints. The proposals also aim to improve the day-to-day operation of the National Registration Rules for both industry and regulators, and thereby will further enhance the efficiency of the new harmonized registration regime," said Jean St-Gelais, Chair of the CSA and President and Chief Executive Officer of the Autorité des marchés financiers (Québec).
The proposed amendments are intended to make the National Registration Rules clearer and the on-going requirements more targeted, to the benefit of registrants and the investors they serve.
The main areas that would be affected are:
- proficiency requirements;
- Know-Your-Product requirement;
- international dealer and international adviser exemptions;
- compliance systems;
- conflicts of interest;
- referral arrangements;
- guidance on handling investor complaints and dispute resolution
- account activity reporting.
The attached backgrounder provides a more detailed description of the proposed changes to NI 31-103. Copies of the proposed amendments and additional background information are available on the websites of CSA members. The comment period is open until September 30, 2010.
The CSA, the council of the securities regulators of Canada's provinces and territories, co-ordinates and harmonizes regulation for the Canadian capital markets.
For more information:
Theresa Ebden Sylvain Théberge
Ontario Securities Commission Autorité des marchés financiers
Mark Dickey Brenda Lea Brown
Alberta Securities Commission British Columbia Securities Commission
Ainsley Cunningham Wendy Connors-Beckett
Manitoba Securities Commission New Brunswick Securities Commission
Natalie MacLellan Barbara Shourounis
Nova Scotia Securities Saskatchewan Financial Services
Janice Callbeck Doug Connolly
PEI Securities Office Financial Services Regulation Div.
Office of the Attorney General Newfoundland and Labrador
Fred Pretorius Louis Arki
Yukon Securities Registry Nunavut Securities Office
Backgrounder: Summary of Proposed Changes to National Instrument 31-103
Registration Requirements and Exemptions
The National Registration Rules introduced on September 28, 2009 have higher proficiency standards for some registrants, and enhanced rules for consumer disclosure, referral arrangements, handling investor complaints, and disclosing and addressing conflicts of interest. They also introduced a registration requirement for investment fund managers, exempt market dealers and senior officers responsible for compliance. The National Registration Rules recognize that the registration regime must accommodate a wide variety of business models, scales of operation, clients and products. The amendments proposed by the CSA include proposals to
- make various minor drafting changes to NI 31-103 and clarifications to
the guidance in Companion Policy 31-103 CP Registration Requirements
and Exemptions (the Companion Policy) in order to give better effect to
the original intent and to codify staff administrative practice that is
in keeping with this original intent
- give effect to omnibus / blanket relief orders described in CSA Staff
Notice 31-315 Omnibus / blanket orders exempting registrants from
certain provisions of NI 31-103 Registration Requirements and
Exemptions; most of these relief orders address issues relating to the
transition from the old registration regime to the new regime
introduced with NI 31-103
- incorporate into Companion Policy 31-103 Registration Requirements and
Exemptions (Companion Policy) some of the guidance which we published
on December 18, 2009 and February 5, 2010 as Frequently Asked Questions
(FAQ); these FAQs are available on the websites of most of the CSA
- add an obligation for registered representatives to understand the
structure and features of each security they recommend
- propose guidance in the Companion Policy which would guide registrants
in meeting the requirement to document complaints and to fairly and
effectively respond to them
- amend the requirement to the obligation of the registered firm to
ensure independent resolution or mediation services in cases where the
complaint relates to a trading or advising activity, a breach of client
confidentiality, theft, fraud, misappropriation or forgery,
misrepresentation, an undisclosed or prohibited conflict of interest or
personal financial dealings with a client
- add obligations for investment fund managers to deliver trade
confirmations and account statements to investors who deal directly
with them, rather than through a dealer
- address the impact of the coming introduction of International
Financial Reporting Standards (IFRS) on the valuation of securities for
purposes of NI 31-103
- remove certain non harmonized provisions with respect to the mutual
fund dealer category
- grant additional exemptions to members of self regulatory organizations
(SROs) where the SRO rules adequately cover the same regulatory risks,
- extend certain exemptions to circumstances that are consistent with the
original policy intent of NI 31-103.
SOURCE Autorité des marchés financiers
For further information: For further information: Theresa Ebden, Ontario Securities Commission, 416-593-8307; Mark Dickey, Alberta Securities Commission, 403-297-4481; Ainsley Cunningham, Manitoba Securities Commission, 204-945-4733; Natalie MacLellan, Nova Scotia Securities Commission, 902-424-8586; Janice Callbeck, PEI Securities Office, Office of the Attorney General, 902-368-6288; Fred Pretorius, Yukon Securities Registry, 867-667-5225; Donn MacDougall, Northwest Territories, Securities Office, 867-920-8984; Sylvain Théberge, Autorité des marchés financiers, 514-940-2176; Brenda Lea Brown, British Columbia Securities Commission, 604-899-6554; Wendy Connors-Beckett, New Brunswick Securities Commission, 506-643-7745; Barbara Shourounis, Saskatchewan Financial Services Commission, 306-787-5842; Doug Connolly, Financial Services Regulation Div., Newfoundland and Labrador, 709-729-2594; Louis Arki, Nunavut Securities Office, 867-975-6587