CSA / ACVM Canadian Securities Autorités canadiennes Administrators en valeurs mobilières REQUEST FOR COMMENT Notice of Proposed Amendments to National Instrument 31-101 ─ National Registration System and to National Policy 31-201 ─ National Registration System Introduction The Canadian Securities Administrators (the CSA or we) are publishing for comment proposed amendments to National Instrument 31-101 ─ National Registration System (NI 31-101) and to National Policy 31-201 ─ National Registration System (NP 31-201). NI 31-101 and NP 31-201 are currently in force in all Canadian jurisdictions. The National Registration System (NRS) may be used by investment dealers, advisers, mutual fund dealers and their sponsored individuals in connection with their application for initial registration, amendments to registration or reinstatement of registration or for approval or review of certain sponsored individuals. The purpose of the NRS is to improve the registration system through a mutual reliance process. Principles of mutual reliance are applied to the analysis of registration applications or applications for approval or review of investment dealers, advisers and mutual fund dealers and their sponsored individuals in order to reduce unnecessary duplication in the analysis of applications made in multiple jurisdictions or in subsequent jurisdictions. Substance and Purpose of Proposed Amendments Section 3.2(4) of NP 31-201 lists factors a firm filer should consider when selecting its principal regulator. In the CSA Staff Notice 31-308 issued on April 22, 2005 (the Notice), we indicated that the appropriate principal regulator will normally be the jurisdiction in which the firm's head office is located. If the firm selects a different jurisdiction as its principal regulator, the regulators will seek further information from the firm to substantiate the firm's decision. Unless there are compelling reasons for the firm's principal regulator to be in a different jurisdiction, the regulators will exercise their discretion as described in section 3.3 of NP 31-201 to designate the jurisdiction in which the firm's head office is located as the firm's principal regulator. The substance and purpose of the proposed amendments to NI 31-101 and NP 31-201 are to require that a firm filer select as its principal regulator the local securities regulatory authority or regulator in the jurisdiction where the filer’s head office is located. In exceptional circumstances, factors other than the firm’s head office may be considered when the firm filer applies for a change of principal regulator, as provided in the proposed amendment to section 3.3 of NP 31-201. The proposed amendments are consistent with the selection of an issuer's principal regulator under:
- 2 - • National Policy 43-201 ─ Mutual Reliance Review System for Prospectuses and Annual Information Forms, and • Multilateral Instrument 11-101 Principal Regulator System. Summary of Proposed Amendments The proposed amendments revise NI 31-101 and NP 31-201 to require that a firm filer select as its principal regulator the local securities regulatory authority or regulator in the jurisdiction where the filer’s head office is located. Authority for Proposed Amendments In Ontario, paragraph 143(1)1 of the Securities Act (Ontario) (the Ontario Act) authorizes the Ontario Securities Commission (the Ontario Commission) to make rules prescribing requirements in respect of applications for registration and the renewal, amendment, expiration or surrender of registration. Paragraph 143(1)2 of the Ontario Act authorizes the Ontario Commission to make rules prescribing conditions of registration or other requirements for registrants or any category or subcategory of registrant. Unpublished Materials In proposing the amendments to NI 31-101 and NP 31-201, the Ontario Commission has not relied on any significant unpublished study, report or other written materials. Alternatives Considered The Ontario Commission did not consider any alternatives to the proposed amendments to NI 31-101 and NP 31-201. Anticipated Costs and Benefits It is anticipated that the proposed amendments to NI 31-101 and NP 31-201 will reduce the time and costs of a firm filer associated with determining its principal regulator. Comments Interested parties are invited to make written submissions with respect to these proposed amendments. Submissions received by March 1, 2006 will be considered. If you are not sending your submissions by e-mail, please include a diskette or CD containing your submission (in Windows format, Word)
- 3 - Submissions should be addressed to all of the CSA members listed below: Autorité des marches financiers Ontario Securities Commission Alberta Securities Commission British Columbia Securities Commission Saskatchewan Financial Services Commission It is not necessary to send your comments separately to all CSA member authority authorities. Please send them to the following people. CSA staff will ensure they are sent to the other CSA members. c/o John Stevenson Secretary to the Commission Ontario Securities Commission 20 Queen Street West, Suite 1903, Box 55 Toronto, ON M5H 3S8 Fax: (416) 593-2318 e-mail: jstevenson@osc.gov.on.ca c/o Me Anne-Marie Beaudoin Directrice du Secrétariat Autorité des marchés financiers Tour de la Bourse 800, Square Victoria C.P. 246 Montréal (Québec) H4Z 1G3 Fax : (514) 864-8381 e-mail consultation-en-cours@lautorite.qc.ca We cannot keep submissions confidential because securities legislation in certain provinces requires that a summary of the written submissions received during the comment period be published. Questions Please refer your questions to any of: Jim Wahl Manager, Registration & Compliance Alberta Securities Commission 4th Floor, 300 - 5th Avenue S.W. Calgary, AB T2P 3C4 Direct: (403) 297-4281 Fax: (403) 297-4113 E-mail: jim.wahl@seccom.ab.ca
- 4 - Sandy Jakab Manager-Policy Capital Markets Regulation British Columbia Securities Commission P.O. Box 10142, Pacific Centre 701 - West Georgia Street Vancouver, BC V7Y 1L2 Direct: (604) 899-6869 Fax: (604) 899-6814 E-mail: sjakab@bcsc.bc.ca Douglas R. Brown General Counsel & Director - Legal, Enforcement & Registration The Manitoba Securities Commission 500-400 St. Mary Avenue Winnipeg, MB R3C 4K5 Direct: (204) 945-0605 Fax: (204) 945-0330 E-mail: doubrown@gov.mb.ca Andrew Nicholson Director Market Regulation New Brunswick Securities Commission 606 - 133 Prince William Street Saint John, NB E2L 2B5 Direct: (506) 658-3021 Fax: (506) 658-3059 E-mail: andrew.nicholson@nbsc-cvmb.ca Douglas J. Connolly Director of Financial Services Regulation Financial Services Regulation Division Department of Government Services Government of Newfoundland and Labrador 2nd Floor, West Block Confederation Building P.O. Box 8700 St. John’s, NL A1B 4J6 Direct: (709) 729-2954 Fax: (709) 729-6187 E-mail: dconnolly@gov.nl.ca
- 5 - Brian W. Murphy Deputy Director, Capital Markets Nova Scotia Securities Commission Joseph Howe Building 2nd Floor, P.O. Box 458 Halifax, Nova Scotia B3J 2P8 Direct: (902) 424-4592 Fax: (902) 424-4625 E-mail: murphybw@gov.ns.ca David M. Gilkes, BA, MA, CFE Manager, Registrant Regulation Capital Markets Branch Ontario Securities Commission 18th Floor, 20 Queen Street West Toronto, ON M5H 3S8 Direct: (416) 593-8104 Fax: (416) 593-8240 E-mail: dgilkes@osc.gov.on.ca Mark Gallant Registrar of Securities PEI Securities Division Office of the Attorney General P.O. Box 2000 95 Rochford Street 4th Floor, Shaw Building Charlottetown, PE C1A 7N8 Direct: (902) 368-4552 Fax: (902) 368-5283 E-mail: mlgallant@gov.pe.ca Maryse Pineault Directrice des pratiques de distribution Autorité des marchés financiers 800 square Victoria, 22e étage C.P. 246, Tour de la Bourse Montréal, QC H4Z 1G3 Direct: (514) 940-2199 ext. 4781 Fax: (514) 864-7854 E-mail: maryse.pineault@lautorite.qc.ca
- 6 - Dean Murrison Deputy Director, Legal/Registration Securities Division Saskatchewan Financial Services Commission 6th Floor, 1919 Saskatchewan Drive REGINA SK S4P3V7 Tel: 306 787-5879 Fax: 306 787-5899 email: dmurrison@sfsc.gov.sk.ca Gary Crowe Registrar of Securities Legal Registries Division, Department of Justice Government of Nunavut P.O. Box 1000, STN 570 1st Floor, Brown Building Iqaluit, NU X0A 0H0 Direct: (867) 975-6586 Fax: (867) 975-6594 E-mail: gcrowe@gov.nu.ca M. Richard Roberts Manager, Corporate Affairs Registrar of Securities Corporate Affairs / Community Services Government of Yukon P.O. Box 2703 2134 Second Avenue Whitehorse, YT Y1A 5H6 Direct: (867) 667-5225 Fax: (867) 393-6251 E-mail: richard.roberts@gov.yk.ca The text of the proposed amendments follow or can be found elsewhere on a CSA member website. November 25, 2005
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