MSC Notice 2013-49
Proclamation of Amendments to The Securities Act and
Transitional matters relating to the regulation of Derivatives under the Act
The Manitoba Securities Commission (Commission or MSC) is publishing this Notice to provide
an update with respect to amendments being made to The Securities Act (the Act) which come
into force on December 31, 2013. These amendments are contained in S.M. 2012, c.12 which
can be found at the following link:
http://web2.gov.mb.ca/laws/statutes/2012/c01212e.php
The amendments to the Act that come into force on December 31, 2013
1
include authority to
regulate over-the-counter derivatives. This includes authority over the trading and advising in
derivatives as well as the recognition of clearing agencies and trade repositories. Amendments
are also being made to the French version of the Act to ensure consistency of expression.
The trading and advising in the trading of exchange traded futures and options contracts
continues to be regulated by the Commission pursuant to powers contained in The Commodity
Futures Act.
Designation of Derivatives
Section 1(1.5) of the amended Act provides authority to the Commission to make an order
designating a contract or instrument or class of contracts or instruments as a derivative or
designated derivative for the purpose of the Act. The Commission has not issued orders under
this section and has no orders under consideration at this time.
1
Sections 1, 40, 44, 49(c) & 53 of S.M. 2012, c.12 which do not involve the regulation of derivatives came into
effect on June 14, 2012. The amendments that came into force in 2012 permit alternate disclosure for mutual
funds as well as amendments to the limitation period for persons seeking to commence lawsuits on the basis of
secondary market disclosure.
As no designation order has been issued by the Commission the requirement for a Disclosure
Document contained in section 79.1 of the Act currently has no application.
Derivatives Rules
The Commission continues to work with other members of The Canadian Securities
Administrators (CSA) on rules for the regulation of derivatives. The CSA Derivatives Committee
has published (and will be publishing) a series of Concept Papers. Model Rules have also been
published for comment.
On November 14, 2013 the Commission published the following rules which will come into force
on December 31, 2013:
MSC Notice 2013-41 - MSC Notice of Manitoba Securities Commission Rules 91-506
Derivatives: Product Determination and 91-507 Trade Repositories And Derivatives Data
Reporting
http://www.msc.gov.mb.ca/legal_docs/legislation/notices/91_506_507_notice_package.pdf
Clearing Agencies - Blanket Order
The Commission published for comment a Model Rule for the regulation of Clearing Agencies
on December 12, 2013. Until such time as the Commission has put into force rules for the
regulation of Clearing Agencies a blanket order has been issued by the Commission exempting
Clearing Agencies from the requirement to be recognized that is contained in section 31.7 of the
amended Act. This blanket order will be in effect until such time as a rule is implemented to
regulate the recognition of clearing agencies that carry on business in Manitoba.
The order can be found at the following link:
http://www.msc.gov.mb.ca/legal_docs/orders/6859_clearing_agency_bo.html
Registration Requirements
The CSA Derivatives Committee published a concept paper on the topic of registration on April
18, 2013. Comments made to the Committee following this publication are currently under
review by the Committee and will be the subject of a Model Rule which is expected to be
published in 2014.
The requirements of National Instrument 31-103 will continue to apply. For the purposes of the
trading and advising in the trading of derivatives firms and individuals must continue to be
registered in the category of Investment Dealer. The requirements imposed by Investment
Industry Regulatory Association of Canada (IIROC) will continue to apply.
Other matters
Other sections of the Act amendments are largely permissive in nature and do not impose
mandatory requirements that require further blanket relief at this time. However, Commission
staff will continue to monitor the impact of the amended Act on the market to determine if other
blanket orders or other forms of relief are required.
Commission staff are also prepared to consider applications under section 20(1) for specific
orders exempting a market participant from a requirement contained in the amended Act if the
market participant can demonstrate the granting of such an order would not be prejudicial to the
public interest.
Further Notices will be issued in the event further blanket orders are issued or the existing
orders are amended or revoked.
Questions may be referred to:
Douglas R. Brown
Director
The Manitoba Securities Commission
204-945-0605
Doug.brown@gov.mb.ca
December 18, 2013
THE MANITOBA
THE SECURITIES ACT
)
Order No. 6859
SECURITIES
)
COMMISSION
Subsection 20(1)
)
December 17, 2013
BLANKET ORDER
EXEMPTION FROM REQUIREMENT FOR A CLEARING
AGENCY TO BE RECOGNIZED PURSUANT TO SECTION 31.7
OF THE SECURITIES ACT
WHEREAS:
(A)
An application has been made by Staff to The Manitoba Securities
Commission (the "Commission") for an Order under Section 20(1) of The Securities
Act (the "Act") granting an exemption from the requirement that a Clearing Agency
be recognized by the Commission pursuant to Section 31.7 of the Act.
(B)
Background:
(1)
The Act is being amended to put into force on December 31 ,
2013 a requirement that a Clearing Agency be recognized in
writing by the Commission in order to conduct business in
Manitoba.
(2)
The Commission, along with other members of the Canadian
Securities Administrators are currently developing a Rule which
will set out both the process for recognition and continuing
requirements to maintain recognition by a Clearing Agency (the
"CSA Rule").
(3)
The Commission is of the view that the CSA Rule will provide
the necessary standards for the application of the requirement
for recognition of a Clearing Agency pursuant to Section 31.7 of
the Act and that enforcing this provision prior to conclusion of
the CSA Rule would be disruptive to the markets and not in the
public interest.
(C)
The Commission is of the opinion that it would not be prejudicial to the
public interest to grant the order requested .
S00-~10 SI. Mary Awnu , Winnit>t'K, Manitoba RJC 4KS lel : (:?041 94.'i .2S4)1 fax: (204) 94S.03JO www.m$C.Jtcnr.mb.i;-d
2
IT IS ORDERED:
1.
THAT, under section 20(1) of the Act, the requirement for a Clearing
Agency to be recognized by the Commission to carry on business in Manitoba
contained in section 31. 7 of the Act, does not apply to a Clearing Agency provided
that the Clearing Agency is in compliance with the laws of the jurisdiction in which it
is located to carry on business as a clearing agency.
2.
THAT this Order takes effect on December 31 , 2013.
BY ORDER OF THE COMMISSION
You are being directed to the most recent version of the statute which may not be the version considered at the time of the judgment.