On February 4, the Canadian Securities Administrators (CSA) published proposed amendments to NI 33-109 and its Companion Policy (NI 33-109CP) (collectively, the Proposed Amendments) intended to provide “greater clarity on what information is required as part of the registration process”.
The proposed amendments will help Regulated Persons (i.e. individuals and firms) provide complete and accurate registration information while allowing the CSA to receive the information necessary to carry out its mandates.
The CSA seek to address issues identified by its staff and respond to concerns raised by Regulated Persons.
Outside Activities and positions of influence
Currently, Individual Registrants are required to disclose “any employment and business activities outside the sponsoring firm”. To ensure that Regulated Persons comply efficiently and in a timely manner to the requirements relating to the disclosure of outside activities, the CSA proposed, among other things, to establish 6 categories of Outside Activities that must reported to regulators including:
Activities with another registered firm
Other securities related activities
Provision of financial or financial related services
The CSA also proposed to extend the deadline for reporting new Outside Activities or changes in Outside Activities to 30 days.
The current rules require Regulated Persons to inform regulators of changes to registration information within 10 calendar days of the change. Because Regulated Persons, especially larger firms with numerous Individual Registrants, has raised concerns about the challenge in complying with this reporting timeline, the CSA proposed to extend the reporting deadlines from 10 days to 15 days for changes in certain registration information. Extend the reporting deadline from 10 days to 30 days for changes for certain information including:
An Individual Registrant’s current and previous residential address;
A registered firm’s securities registration;
A registered firm’s conflicts of interest.
Regulatory burden of certain reporting requirements
To reduce regulatory burden related to reporting requirements the CSA proposed, among others, to:
Reduce the requirement for reporting changes in percentage ownership on an ownership chart to when the percentage ownership exceeds or falls below 10%, 20%, or 50%
Provide a mechanism for a registered firm to delegate to another registered firm the requirement to notify the regulator of changes in certain registration information
Common errors and updated certification requirements
Currently, information provided to regulators by Regulated Persons in the Registration Form must be true and complete. To reduce the regulatory burden caused by issues related to inaccurate or incomplete information, the CSA proposed to provide guidance regarding the completion of the Registration Forms including clarify what registration information must be disclosed in the Individual Registration Form.
Privacy notice and consent
The CSA proposed to update the notice of use and collection of personal information in each of the Registration Forms and improve readability. These Proposed Amendments are scheduled to come into force at the end of 2021, with the changes relating to positions of influence subject to a six-month transition period.
Comments on the Proposed Amendments are to be provided by May 5, 2021.