Securities Law

BCN 2005/04 - Notice of National Instrument 31-101 National Registration System, Forms and National Policy 31-201 National Registration System [BCN - Lapsed]

Published Date: 2005-01-07
Rescinded Date: 2012-05-31
Related Document(s):

Concurrently Published:

In the attached advance notice, the Canadian Securities Administrators announce the expected implementation of National Instrument 31-101 National Registration System, Form 31-101F1, Form 31-101F2 and National Policy 31-201 National Registration System, effective April 4, 2005.

January 7, 2005

Douglas M. Hyndman

Chair

Ref:      National Instrument 31-101 National Registration System
            
Form 31-101F1 Election to Use NRS and Determination of Principal Regulator
            
Form 31-101F2 Notice of Change
            
National Policy 31-201 National Registration System

This Notice may refer to other documents. These documents can be found at the B.C. Securities Commission public website at www.bcsc.bc.ca in the Commission Documents database or the Historical Documents database.

 

Notice of Rule/Regulation
National Instrument 31‑101 National Registration System,
and Form 31‑101F1, Form 31‑101F2, and
National Policy 31‑201 National Registration System

 

Introduction

National Instrument 31‑101 National Registration System and National Policy 31‑201 National Registration System are an initiative of the Canadian Securities Administrators (CSA or we).  The CSA has developed the National Registration System (NRS), which may be used by investment dealers, advisers, mutual fund dealers and their sponsored individuals in connection with their application for initial registration, amendments to registration or reinstatement of registration or for the approval or review of certain sponsored individuals.  The requirements and procedure under NRS are set out in National Instrument 31‑101 National Registration System, Form 31‑101F1 Election to use NRS and Determination of Principal Regulator, Form 31‑101F2 Notice of Change (collectively, the Instrument) and National Policy 31‑201 National Registration System (the Policy).

The Instrument has been made or is expected to be made by each member of the CSA, and will be implemented as

  • a rule in each of   Alberta, Manitoba, New Brunswick, Newfoundland and Labrador, Nova Scotia, Ontario and Prince Edward Island,
  • a regulation in Nunavut, Saskatchewan and Québec,
  • a blanket order in British Columbia,
  • a code in the Northwest Territories, and
  • a policy in all other jurisdictions represented by the CSA.

We expect the Policy will be adopted as a policy in all jurisdictions.

NRS is being implemented pursuant to the Memorandum of Understanding for the Mutual Reliance Review System signed as of October 14, 1999 between members of the CSA (MOU).   We expect that all jurisdictions will confirm the inclusion of the Instrument and the Policy in the MOU.

In Ontario, the Instrument and other required materials were delivered to the Chair of Management Board of Cabinet (the Minister) in December.   The Minister may approve or reject the Instrument or return it for further consideration.   If the Minister approves the Instrument or does not take any further action, the Instrument will come into force on the date indicated below.

In Québec, National Instrument 31‑101 National Registration System was published as a proposed regulation in January 2004.   A regulation made under the Securities Act (Québec) (the QSA) is adopted by the Autorité des marchés financiers and, thereafter, must be approved, with or without amendment, by the Minister of Finance prior to coming into force.   In addition, it should be noted that the Autorité des marchés financiers shall adopt a regulation under the Act respecting the distribution of financial products and services (the LDPSF) in order to make the NRS applicable to firm in group‑savings‑plans brokerage and their representatives.  Furthermore, the Autorité des marchés financiers is currently evaluating whether it should adopt one or more regulations in order to implement the NRS.  Prior to coming into force, a regulation adopted by the Autorité des marchés financiers must be approved, with or without amendment, by the Quebec Government or the Minister of Finance.

In Nova Scotia, the Instrument will be delivered to the Minister for non‑objection by the Governor in Council in accordance with Nova Scotia securities law after it is adopted as a rule   by the Commission.   If the Instrument is not objected to by the Governor in Council, it will come into force in April 2004.

In Nunavut, a Request for Decision to Cabinet will be required to adopt the Instrument as a regulation under the Securities Act (Nunavut).

Provided all necessary ministerial or other governmental approvals are obtained, we expect to implement the Instrument on April 4, 2005.   We will implement the Policy at the same time as the Instrument.

Substance and Purpose

The purpose of NRS is to improve the current registration system through a mutual reliance process.   Principles of mutual reliance will be applied to the analysis of registration applications or applications for approval or review of investment dealers, advisers and mutual fund dealers and their sponsored individuals in order to reduce unnecessary duplication in the analysis of applications made in multiple jurisdictions or in subsequent jurisdictions.

The Instrument sets out the eligibility requirements for firm filers and individual filers to be able to use NRS.   An eligible firm filer elects to use NRS by submitting a Form 31‑101F1.   Eligible individual filers whose sponsoring firm has elected to use NRS must use NRS when submitting an application to a non‑principal regulator.

The Instrument provides exemptive relief so that filers under NRS only have to satisfy or comply with the fit and proper requirements, notice requirements and filing requirements applicable in their principal jurisdiction.   Fit and proper requirements relate to a filer’s suitability to be registered or to be approved.   Filers will continue to be subject to the conduct rules applicable in each jurisdiction where they are registered.  The Instrument and Policy contain further description of fit and proper requirements and of conduct rules.

The Policy sets out the procedure to be followed by filers who are submitting applications under NRS.   A filer’s principal regulator is generally the securities regulatory authority or regulator of the jurisdiction where the firm filer’s head office and directing mind and management is located and where the individual filer’s working office is located.

Generally, when submitting an application under NRS, filers will only file the materials required by their principal regulator.   Further, filers will normally only deal with their principal regulator on their initial application and when seeking to register in additional jurisdictions.   Once the principal regulator has reached a decision on the application, non‑principal regulators may opt in or opt out of NRS in connection with that application.  Opting out is expected to happen on an exceptional basis.

Application for registration or approval of individual filers will be made through the National Registration Database (NRD) implemented under Multilateral Instrument 31‑102 National Registration Database and Multilateral Instrument 33‑109 Registration Information.   In order to allow efficient implementation and application of NRS, three key changes will be made to technology underlying NRD.  These changes relate to the selection of principal regulator, opt in / opt out function and unique designation of NRS submissions.

In Québec, NRD implementation is principally governed by Regulation 31‑102Q respecting National Registration Database and Regulation 33‑109Q respecting Registration Information.   Those regulations came into force on January 1st, 2005.

NRS does not apply to renewals of registrations as the CSA feels that processing renewals under current legislation through NRS could be lengthier than the current process.

Background

The Instrument and Policy were published for comment in January and February, 2004.   The comment period expired in April, 2004.

Summary of written comments received by the CSA

During the comment period, the CSA received submissions from nine commentors on the Instrument and Policy.   We have considered the comments received and thank all the commentors.   The names of the nine commentors and a summary of the comments on the Instrument and Policy, together with our responses, are contained in Appendix A and Appendix B to this Notice.

After considering the comments, we have made amendments to the Instrument and Policy to improve the clarity and consistency of the Instrument and Policy. However, as these changes are not material, we are not republishing the Instrument or Policy for a further comment period. 

Summary of Changes to the Proposed Instrument and Policy

See Appendix C to this Notice for a description of the changes made to the versions of the Instrument and Policy since they were published.

Local Amendments

We are amending or repealing elements of local securities legislation and securities directions in conjunction with implementing NRS.   The provincial and territorial securities regulatory authorities may publish, or may have published, these local changes or proposed changes separately in their local jurisdiction.

Questions

Please refer your questions to any of:

Jim Wahl
Manager, Registration & Compliance
Alberta Securities Commission
4th Floor, 300 - 5th Avenue S.W.
Calgary, AB   T2P 3C4
Direct: (403)297-4281
Fax:      (403)297-4113
E-mail:             jim.wahl@seccom.ab.ca

Susan Toews
Senior Legal Counsel
Capital Markets Regulation
British Columbia Securities Commission
P.O. Box 10142, Pacific Centre
701 - West Georgia Street
Vancouver, BC   V7Y 1L2
Direct: (604)899-6764
Fax:      (604)899-6814
E-mail:            stoews@bcsc.bc.ca

Douglas R. Brown
General Counsel &
Director - Legal, Enforcement & Registration
The Manitoba Securities Commission
1130 - 405 Broadway
Winnipeg, MB  R3C 3L6
Direct: (204) 945-0605
Fax:      (204) 945-0330
E-mail:             doubrown@gov.mb.ca 

Andrew Nicholson
Director Market Regulation
New Brunswick Securities Commission
606 - 133 Prince William Street
Saint John, NB   E2L 2B5
Direct: (506) 658-3021
Fax:      (506) 658-3059
E-mail: andrew.nicholson@nbsc-cvmb.ca

Susan W. Powell
Manager, Corporate Finance and Market Conduct
Securities Commission of Newfoundland and Labrador
Government of Newfoundland and Labrador
2nd Floor, West Block
Confederation Building
P.O. Box 8700
St. John’s, NL   A1B 4J6
Direct: (709)729-4875
Fax:      (709)729-6187
E-mail: spowell@gov.nl.ca

Brian W. Murphy
Deputy Director, Capital Markets
Nova Scotia Securities Commission
Joseph Howe Building
2nd Floor, P.O. Box 458
Halifax, Nova Scotia   B3J 2P8
Direct: (902) 424-4592
Fax:      (902) 424-4625
E-mail:             murphybw@gov.ns.ca

David M. Gilkes, BA, MA, CFE
Manager, Registrant Regulation
Capital Markets Branch
Ontario Securities Commission
18th Floor, 20 Queen Street West
Toronto, ON   M5H 3S8
Direct: (416)593-8104
Fax:      (416)593-8240
E-mail:             dgilkes@osc.gov.on.ca

Mark Gallant
Registrar of Securities
PEI Securities Division
Office of the Attorney General
P.O. Box 2000
95 Rochford Street
4th Floor, Shaw Building
Charlottetown, PE   C1A 7N8
Direct: (902) 368-4552
Fax:      (902) 368-5283
E-mail:             mlgallant@gov.pe.ca 

Maryse Pineault
Directrice des pratiques de distribution
Direction de l’encadrement de la distribution
Autorité des marchés financiers
Place de la Cité, Tour Cominar
3e étage
2640, boulevard Laurier
Sainte-Foy, QC   G1V 5C1
Direct: (418) 525-0558 ext. 4781
Toll Free:   1-877-525-0337 ext. 4781
Fax:      (418) 525-5178
E-mail: maryse.pineault@lautorite.qc.ca

Gary Crowe
Registrar of Securities
Legal Registries Division, Department of Justice
Government of Nunavut
P.O. Box 1000, STN 570
1st Floor, Brown Building
Iqaluit, NU   X0A 0H0
Direct: (867) 975-6586
Fax:      (867) 975-6594
E-mail:             gcrowe@gov.nu.ca 

M. Richard Roberts
Manager, Corporate Affairs
Registrar of Securities
Corporate Affairs / Community Services
Government of Yukon
P.O. Box 2703
2134 Second Avenue
Whitehorse, YT   Y1A 5H6
Direct: (867) 667-5225
Fax:      (867) 393-6251
E-mail:             richard.roberts@gov.yk.ca

Instrument and Policy

The text of the Instrument and Policy follow or can be found elsewhere on a CSA member website.

January 7, 2005