Regulators moving on advisor registration

(February 24, 2004) Although publicly focusing on larger regulatory initiatives — such as uniform securities legislation (USL) — the Canadian Securities Administrators (CSA) is quietly working on a couple of smaller projects that will have a direct impact on advisors.

“We have some interesting spinoffs from the USL project,” said CSA chair Stephen Sibold yesterday at a Canadian Institute securities conference in Toronto.

The CSA is working on a new national registration requirement rule, Sibold said. “This will provide a national uniform rule for both obtaining and maintaining registration as a broker or an advisor.”

The new rule should be published by June and implemented next year, he added.

Tied in to the national registration rule is the national registration system (NRS), which the CSA hopes to have up and running by the end of June.

“[NRS] provides a mutual reliance approach to the registration of firms and individuals, relying on a principal jurisdiction model,” Sibold explained.

The NRS was published for comment last month. Under the proposal, the home or “principal” regulator would review all advisor and firm registration applications for suitability. Other regulators would rely on the principal regulator’s recommendations to either accept or reject the application.

Advisors have long complained about the onerous process of registering in multiple jurisdictions to deal with clients who move to another province.

The rule would apply to three registration categories: investment dealers, mutual fund dealers and portfolio managers. In cases where registrants are members of a self-regulating organization (SRO), such as the IDA or the MFDA, the SRO would assume the role of principal regulator.

The CSA says the new system would reduce the time spent by applicants to prepare and file forms because only one set of documents would have to be filed with one regulator. However, there’s no expectation that NRS will lead to a single registration fee.

What do you think of this CSA initiative? Do you have any concerns about this program? Share your thoughts and opinions about this issue with your fellow advisors in the Talvest Town Hall on Advisor.ca.

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