Regulators issue passport model update

The 12 Canadian provinces and territories who have signed on to the passport model have released a progress report on their continuing efforts to harmonize the country’s securities regulations.

The model became effective on September 19, 2005, giving participants access to markets in multiple jurisdictions simply by dealing with the rules of their principle, or home regulator. But Ontario refused to participate, holding out for some kind of single securities regulator, a point emphasized on Thursday by new OSC chair David Wilson.

“We need a common securities regulator in Canada to improve both the efficiency and attractiveness of our capital market,” Wilson said in his first speech as chair.

For now, the passport system is limited to areas where there is already sufficient harmonization, the six page update notes, such as prospectuses, continuous disclosure and registration (through the National Registration System).

However, jurisdictions participating in the passport model provide registrants with the benefits of an additional exemption, the update says. “A registrant may be exempted from registering in a new jurisdiction when an existing clients moves to that jurisdiction and when the registrant has few eligible clients and a small amount of assets under management there. This mobility exemption removes an irritant for registrants and their clients.”

A task force, chaired by Alberta, has been set up in an effort to implement “highly harmonized and simplified” securities laws by the end of 2006 and complete a fee review. Jurisdictions will retain the authority to set and collect fees, the update notes. “However, work will commence on addressing the principles of fee collection that would apply under a full passport system.”

Further ahead, regulators plan to explore options for further reform and consolidation by the end of 2007.

Filed by Doug Watt, Advisor.ca, doug.watt@advisor.rogers.com