CSA Staff Publish Notice Regarding Transition To New Registration Regime

 
FREE EXCERPT

Staff of the Canadian Securities

Administrators (CSA Staff)

published CSA Staff Notice

31-311 (the Staff Notice), which

outlines the CSA Staff's detailed recommendations to the

relevant securities regulatory authorities and ministries regarding

the transition of firms and individuals from the existing

registration regime to the new one under proposed National Instrument 31-103

Registration Requirements (NI

31-103). The recommendations apply to both Canadian and

non-resident registrants, and to firms that are not currently

subject to registration but will be required to register under NI

31-103. These procedural recommendations do not address any of the

substantive requirements of NI 31-103. The CSA Staff will seek

final approval to publish the final version of NI 31-103 on or

about July 17, 2009 intending for it to come into force on or about

September 28, 2009 (the effective date).

The notice discusses a number of issues, including the

conversion of existing registrants to new categories of

registration, timelines for transition and compliance under the new

registration regime, as well as the proposed "freeze

period" of the National Registration

Database (NRD) to allow staff to

transition registrants and activate the new forms under proposed

revised National Instrument 33-109

Registration Information (NI

33-109). While the Staff Notice contains detailed and

helpful information on key transition issues, CSA Staff caution

that it reflects only what CSA Staff are recommending.

Conversion

During the "freeze period", discussed below, the CSA

propose to convert the existing categories of registration for

firms and individuals to the equivalent categories under NI 31-103,

where applicable, as set out in Appendix A to the Staff Notice.

Generally, where there is no equivalent category of registration,

the firm will no longer be registered. Of note, and as discussed

further below, International Dealers currently registered in

Ontario and Newfoundland and Labrador are no longer proposed to be

transitioned to the Exempt Market Dealer category as proposed in

the most recently published draft of NI 31-103, released in

February 2008 (the 2008 Proposal).

The Investment Industry Regulatory

Organization of Canada (IIROC)

also plans to publish its own notice regarding the conversion of

registration categories.

Transition Timelines

The CSA Staff are recommending varied transition periods to

allow firms and individuals to "adjust to, and comply

with" the new requirements.

For firms registered in a jurisdiction

before the effective date, the CSA Staff's

recommendations are as follows:

Generally

3 months for firms to designate and apply for registration for

the Ultimate Designated Person (UDP) and Chief

Compliance Officer (CCO);

12 months for firms to satisfy capital requirements and notify

the regulator of a subordination agreement;

6 months for firms to satisfy bonding or insurance

requirements;

6 months for firms to comply with referral arrangement

requirements;

12 months for firms to deliver relationship disclosure

information to clients; and

24 months for firms to ensure that an independent dispute

resolution or mediation service is available to resolve client

complaints.

Capital and insurance in accordance with current...

To continue reading

FREE SIGN UP