National Registration Database in final testing phase

(February 11, 2003) The long-awaited National Registration Database is just weeks away from launching, with regulators currently completing final tests. February 7, 2003, was the deadline for firms to register. The NRD, which will allow companies to file registration forms online for multiple jurisdictions, will be up and running March 31.

All provinces and territories are participating in the project, with the exception of Quebec. Investment Dealers Association firms are also taking part. It’s estimated the NRD will initially have about 100,000 registrants.

The database, which will be mandatory for all advisors, was originally scheduled to launch November 2002 but was delayed in order to facilitate improvements.

“Different groups were suggesting new features and we just decided to extend the process so we could respond to those suggestions,” says Ontario Securities Commission spokesperson Jeff Codispodi.

But everything is on track for next month’s launch, Codispodi insists. “We’re just proceeding with some of the final testing,” he told Advisor.ca. “We have people from the OSC and the IDA and other regulators go in and attempt different scenarios, such as transferring an advisor from one firm to another.”

A study conducted by the OSC in 2001 suggested the NRD will save the financial services industry $85 million over five years.

The NRD will also be a timesaver for firms, Codispodi explains, since they will no longer to have send in supporting documentation for each jurisdiction.

“With NRD, you submit that documentation once electronically and select how many jurisdictions you want to apply to,” he says. “So you submit once instead of having to fill out and send in all those forms.” Under the current paper-based system, registration forms can take up to six weeks to process.

The database will also solve the problem of forms that aren’t filled out properly, a common source of delays. NRD won’t accept a submission if there’s a deficiency, Codispodi explains. “We’re still applying the same level of scrutiny, but we’re spending a lot of time on document deficiencies.”

The original NRD model proposed a “permanent” registration system, ending the requirement that advisors renew annually. Codispodi says regulators have shelved that idea for the time being, deciding that they still want the chance to determine each year whether an individual is suitable for registration. “It’s an investor protection objective,” he says.

The NRD will provide for a common registration renewal date across the country. Every December, firms will be given a list of their registrants. If the firms take no action, NRD will charge the annual $75 for each registrant.

“To decide you’re not going to renew somebody is a far simpler process than removing an existing registrant,” Codispodi says. “We wanted to have that flexibility.”

Regulators have created a special Web site for information on the NRD.

Filed by Doug Watt, Advisor.ca, dwatt@advisor.ca