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CSA Propose Narrowing Scope of Information Required as Part of Registration Process

Stikeman Elliot | Mar 5, 2021

Cutting red tape - CSA Propose Narrowing Scope of Information Required as Part of Registration ProcessProposals by the Canadian Securities Administrators (CSA) seek to clarify registration information requirements and extend filing deadlines.

  • Amendments to National Instrument 33-109 Registration Information (NI 33-109) proposed by the CSA are intended to provide registrants with greater clarity on the information required to be provided to regulators as part of the registration process.
  • Among other things, the proposed amendments would clarify the reporting requirements regarding outside business activities (which would now be referred to as “outside activities”) and attempt to reduce the regulatory impact on firms in respect of certain required information.
  • The CSA are accepting stakeholder feedback on the proposed amendments until May 4, 2021.

On February 4, 2021, the 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”. According to the CSA, industry stakeholders have suggested that some of the registration information currently required is “disproportionately burdensome”, while the breadth of some required information is unclear.

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The Proposed Amendments are not intended to change the nature of the registration process, the requirement to register or the assessment of suitability for registration. Rather, they are intended to modernize the registration information requirements while still ensuring that regulators have the information necessary to satisfy their regulatory roles and protect investors.

Outside Business Activities

Currently, individual registrants must disclose all employment and business activities in which they are engaged outside their sponsoring firms, as well as officer or director positions, and positions of influence. According to CSA Staff, late disclosures are common, and concerns have been raised by stakeholders regarding the broad nature and lack of clarity in respect of the information required to be disclosed.

The Proposed Amendments thus seek to apply a “clearer, more consistent, and principles-based approach” to reporting what would be referred to as “outside activities”. To that end, the Proposed Amendments seek to establish six categories of outside activities that must be reported to regulators, specifically:

  • activities with another registered firm;
  • activities with an entity that receives compensation from a registered firm;
  • other securities-related activities;
  • provision of financial or financial-related services;
  • positions of influence; and
  • specified activities.

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Guidance would be added to NI 33-109CP regarding these categories, while guidance regarding the CSA’s expectations in respect of firm oversight would also be added to the Companion Policy to National Instrument 31-103 Registration Requirements, Exemptions and Ongoing Registrant Obligations.

Certain specified activities would be reportable only if the time spent by the individual registrant exceeded, on average, 30 hours per month. Meanwhile, volunteer and community work that does not involve financial services would no longer be reportable.

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