By The Book: One step closer to passport

The Canadian Securities Administrators has published a notice implementing the regulatory passport system, which streamlines nationwide access to the capital markets.

The notice outlines the new rule, which will result in the full implementation of Multilateral Instrument 11-102 Passport System, slated to take effect March 17, 2008.

“The passport rule, together with the national policies, will simplify the regulatory approval process and benefit businesses and investors in all provinces and territories,” said Jean St-Gelais, chair of the CSA and president and chief executive officer of the Autorité des marchés financiers (Québec). “This phase of passport will give issuers access to Canada’s capital markets by allowing them to deal with only one regulator and one set of harmonized requirements.”

The notice includes an explanation of how market participants working in signatory provinces can interact with Ontario, the only province that has not signed onto the system.

The Government of Ontario has refused to officially join the system without assurances that it would lead to a harmonized, single national regulator.

Under the passport system, market participants need only comply with the regulations of their home province to be recognized across the country. For example, a mutual fund manufacturer would be required to file a prospectus only with its home regulator, which would allow the fund to be sold across the country.

Issuers outside Ontario will also need to have their prospectuses reviewed and receipted by the Ontario Securities Commission. Ontario market participants have direct access to the markets in other jurisdictions by dealing only with the OSC.

Two new policies have been implemented to facilitate such filings: National Policy 11-202, Process for Prospectus Review in Multiple Jurisdictions, and National Policy 11-203, Process for Exemptive Relief Application Reviews in Multiple Jurisdictions.

Passport for registration is expected to proceed once the national rule on registration requirements (NI 31-103) is finalized.

(01/25/08)

Staff

The staff of Advisor.ca have been covering news for financial advisors since 1998.