The jurisdictions participating in the Cooperative Capital Markets Regulatory System released for public comment a revised consultation draft of the uniform provincial/territorial Capital Markets Act, as well as a draft of the initial regulations. This is an important step in the transition to the Cooperative Capital Market Regulatory System. The materials are available at The comment period will run to December 23, 2015.

The proposed legislation and regulations have been based on existing requirements in the participating jurisdictions, which are intended to minimize disruption to market participants and facilitate the regulatory interface with non-participating jurisdictions. However, the proposed framework represents a significant advance towards harmonization by eliminating several of the carve-outs and local variations from the current patchwork of national and multilateral instruments, local rules, policies and forms. Harmonization towards a single set of consistent requirements across the participating jurisdictions would be a significant improvement for market participants.

The regulatory regimes for derivatives in the participating jurisdictions are not currently harmonized. The initial regulations provide for the adoption of the exchange contract model for exchange-traded derivatives and maintains the regulation of over-the-counter derivatives as securities for certain purposes as an interim step. However, the draft legislation contemplates the development of a new regulatory regime for both exchange-traded and over-the-counter derivatives, similar to the recent amendments to the Securities Act (Ontario) and other jurisdictions. This structure will allow for the combination of the regulatory reform regarding derivatives currently being undertaken by members of the CSA.

Additional draft regulations regarding prospectus exemptions and fees will be published in the future to allow for additional work to resolve differences in the existing rules of the participating jurisdictions.