The Canadian Securities Administrators last week proposed a broad range of amendments to the registrant regulatory framework ranging from those intended to codify exemptive relief and create internal consistencies to substantive amendments that would narrow the scope of activities that are conducted by certain registrants.
Specifically, such substantive amendments to National Instrument 31-103 Registration Requirements, Exemptions and Ongoing Registrant Obligations and related instruments, companion policies, OSC rules and forms would, among other things, restrict the activities that exempt market dealers may conduct and prohibit exempt market dealers from conducting brokerage activities (a proposal first discussed earlier this year), and prohibit registrants from relying on registration exemptions to conduct activity that is permitted by their category of registration. Changes to the exempt market dealer category would also clarify the limited circumstances in which exempt market dealers are able to underwrite securities.
The proposed amendments would also: (i) provide an exemption for sub-advisers and exempt registered sub-advisers from certain registrant obligations; (ii) clarify the exemption for trades made through a registered dealer to confirm that the exemption is not available if the person or company relying on the exemption solicits or contacts any purchaser in relation to the trade; and (iii) give effect to blanket rulings and OSC staff positions in regards to the international dealer and international adviser exemptions.
The CSA also proposed harmonizing the blanket exemptions previously provided from the dealer registration requirement for trades in short-term debt by specified financial institutions. Other changes include clarifying and enhancing certain proficiency requirements for registrants and providing guidance relating to registrants serving as corporate directors or with outside business activities. The companion policy is also proposed to be amended to clarify, among other things, the application of the business registration trigger to start-up issuers and to venture capital activities.
In addition to NI 31-103, the amendments will also affect NI 33-109 Registration Information, NI 52-107Acceptable Accounting Principles and Auditing Standards, OSC Rule 33-506 (Commodity Futures Act) Registration Information, OSC Rules 33-502 Non-resident Advisers, as well as related companion policies and forms.
The deadline for submitting comments is March 5, 2014.