The Canadian Securities Administrators (the CSA) recently published the highlights of their achievements over the past three years (the Highlights), as well as their business plan for 2016 to 2019 (the Business Plan). Looking forward, the CSA’s priorities are:
- The protection of investors from unfair, improper and fraudulent practices
- The ongoing efficient functioning of capital markets
- The reduction of risks to market integrity and to investor confidence in the markets
- The enhancement of information technology
Under these priorities, the CSA intends to, among other things:
- Develop and build a new national filing system to replace the core CSA national systems (SEDAR, SEDI, NRD, National Registration Search, Disciplined List, National CTO Database), including a national exempt distribution reporting system;
- Complete the development and implementation of rules for an OTC derivatives regulatory framework;
- Conduct a targeted review of certain aspects of the corporate governance regime, including the independence of board and committee members, to assess whether these aspects are appropriate for today’s environment;
- Review the regulatory burden for reporting issuers;
- Finalize the CSA risk classification methodology for use in Fund Facts documents and proposed ETF point-of-sale disclosure; and
- Improve the Canadian proxy voting infrastructure by way of industry protocols clarifying the roles and responsibilities of key entities.
As an overarching theme, the CSA will be monitoring the impact of past initiatives, including the Client Relationship Model – Phase 2 and Point of Sale amendments and the expansion of the exempt marketplace. Technology also plays a key role in the Business Plan with the CSA looking to monitor and assess the implications of fintech innovations, including blockchain, robo advising, peer-to-peer lending and online crowdfunding portals, and aiming to improve collaboration and communication on cybersecurity issues with market participants. The strengthening of enforcement technology capabilities and strategies has also been listed as a priority.
Looking at the past, the CSA Highlights reflect achievements by the CSA between 2013 and 2016 with respect to the following past priorities, a number of which are similar to those put forward in the Business Plan:
- Enhance retail investor protection
- Capital raising by small and medium sized enterprises and exempt market initiatives
- Shareholder democracy and protection
- Market regulation
- Enhancement of enforcement effectiveness
- Enhancement of information technology
Some of the key achievements of the CSA include the implementation of mutual fund point-of-sale disclosure obligations (Fund Facts documents), an amended regulatory framework for firms and individuals who trade in securities, provide investment advice or manage investment funds, the publication of CSA Consultation Paper 33-404 outlining a standard of conduct for advisers and dealers, significant amendments to the exempt marketplace, including the introduction of a number of new prospectus exemptions, a review of the proxy voting infrastructure, amendments to the take-over bid regime and the early warning system, and the development of consultation papers and proposed rules for the regulation of OTC derivatives.
The Highlights and Business Plan were published on July 6 and 7, respectively, and follow the Ontario Securities Commission’s publication of its 2016-2017 Statement of Priorities. For further information please see CSA Business Plan 2013-2016 Achievement Highlights and CSA Business Plan 2016-2019.