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Canadian securities regulators focus on areas for reducing regulatory burden for investment funds
by FCNB on 

The Canadian Securities Administrators (CSA) today published CSA Staff Notice 81-329 Reducing Regulatory Burden for Investment Fund Issuers, which outlines the CSA’s plan to pursue four initiatives in the near-term that would remove redundancies and streamline disclosure requirements for investment fund issuers.

 

“Reviewing regulatory burden for investment fund issuers is a key priority for our 2016-2019 Business Plan,” said Louis Morisset, CSA Chair and President and CEO of the Autorité des marchés financiers. “We have identified areas to lessen regulatory burden for investment funds, while maintaining investor protection and the efficient functioning of the capital markets.”


CSA staff will undertake initiatives to codify exemptive relief that is routinely granted, and to use web-based technology to provide certain information about investment funds. Other areas of focus include the removal of redundant information in select disclosure documents and minimizing the filing of documents that may contain duplicative information, such as Personal Information Forms. The CSA anticipates publishing proposed rule amendments for comment, as appropriate, to address these initiatives by March 2019.

 

The proposed four initiatives are part of the CSA Rationalization of Investment Fund Disclosure project, which was established in 2017. This project identifies opportunities for reducing regulatory burden for investment fund issuers. To identify the focus areas for the project, staff conducted a comprehensive review of the current investment fund disclosure regime. Other efforts that helped inform the proposals included evaluating disclosure elements borrowed from the non-investment fund reporting issuer regime, gathering information on relevant regulatory reforms conducted by other regulators internationally, and receiving feedback from stakeholders.

 

The notice can be found on the websites of CSA members.

 

The CSA, the council of securities regulators of Canada’s provinces and territories, coordinates and harmonizes regulation for the Canadian capital markets.

  

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For more information:
Erin King
Financial and Consumer Services Commission

506 643-7045
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Canadian securities regulators seek comment on post-trade transparency requirements for government and corporate debt securities
by FCNB on 

The Canadian Securities Administrators (CSA) today published for comment CSA Staff Notice 21-323 Proposal for Mandatory Post-Trade Transparency of Trades in Government Debt Securities, Expanded Transparency of Trades in Corporate Debt Securities and Proposed Amendments to National Instrument 21-101 Marketplace Operation and Related Companion Policy. The proposed amendments would introduce mandatory post-trade transparency requirements for government debt securities (Proposed Government Debt Framework), and expand transparency requirements for corporate debt securities (Expanded Corporate Debt Proposal). The amendments would also align the post-trade transparency regimes for government and corporate debt securities.

 

“Mandatory transparency of debt markets supports investors in making informed trading decisions and is an important element of fair and efficient capital markets,” said Louis Morisset, CSA Chair and President and CEO of the Autorité des marchés financiers.

 

The Proposed Government Debt Framework was developed with input from a working group with staff of the Bank of Canada, Department of Finance Canada and the Investment Industry Regulatory Organization of Canada (IIROC). This framework would be established as a result of the proposed amendments. Additionally, an information processor (IP) for government debt securities would be appointed and would set the requirements. The amendments would require a person or company that executes trades in government debt securities to provide information regarding these trades to the IP. Under the proposal, dealers, interdealer bond brokers (IDBBs), marketplaces and Schedule I, II and III banks would be required to report details of their government debt transactions to the IP.

 

Similarly, the Expanded Corporate Debt Proposal would extend the existing corporate debt transparency provisions to require a person or company that executes transactions in corporate debt securities to provide information regarding trades in these securities to an IP. As a result, mandatory post-trade transparency of trades in corporate debt securities would apply to entities beyond dealers, marketplaces and IDBBs and would include Schedule I, II and III banks.

 

The CSA is proposing that IIROC’s mandate as IP for corporate debt securities would be expanded to include government debt securities. CSA staff would continue to conduct oversight activities to ensure that IIROC complies with the requirements in NI 21-101 and the terms and conditions set by the regulatory authorities in each jurisdiction.

 

 

Detailed descriptions of the proposed changes can be found in Annex A of the notice, which is available on CSA members’ websites. Comments should be submitted in writing by August 29, 2018.

 

The CSA, the council of the securities regulators of Canada’s provinces and territories, co-ordinates and harmonizes regulation for the Canadian capital markets.

 

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For more information:Erin KingFinancial and Consumer Services Commission

506 643-7045
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Civil forfeiture proceeding in the matter of Phoenix Credit Risk Management Consulting Inc. and others
by FCNB on 


MINISTRY OF THE ATTORNEY GENERAL

Civil Remedies for Illicit Activities Office (CRIA)

Statutory Notice 531-16 made under Ontario Regulation 498/06

ATTORNEY GENERAL OF ONTARIO

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$ 2,955,212 IN CANADIAN CURRENCY (IN REM)

This notice relates to funds forfeited in relation to activity in contravention of the Ontario Securities Act that occurred between January 1, 2007 and June 30, 2009. 

The matter is also known as and/or related to the following companies or individuals:  2195043 Ontario Inc., Great Pacific International Inc. (GPI), OSE Corp. (OSE), Phoenix Capital Resources Inc., Phoenix Credit Risk Management Consulting Inc., Phoenix Pension Services Inc. (Phoenix), Rathore & Associates Asset Management Ltd. (R&A), Jawad Rathore, Vincenzo Petrozza, Omar Maloney  and Thalbinder Poonian.

This proceeding, commenced under the Civil Remedies Act, 2001, has resulted in the sum of $2,955,212 being deposited into a special purpose account.

All individuals or other persons who have suffered pecuniary or non-pecuniary losses (money or non money damages) as a result of the unlawful activity that was the subject of the forfeiture proceeding are entitled to make a claim for compensation.

The Crown, a municipal corporation or a public body that is a member of one of the classes of public bodies prescribed in the regulation that suffered pecuniary losses as a result of the unlawful activity that are expenses incurred in remedying the effects of the unlawful activity are also entitled to make a claim for compensation.

All claims must comply with section 6 of Ontario Regulation 498/06 or they will be denied. Regulation 498/06 may be found at: http://www.e-laws.gov.on.ca/html/regs/english/elaws_regs_060498_e.htm.

To obtain a claim form or if you have any inquiries regarding your entitlement to compensation, please email us at MAG_CriaVictims@ontario.ca, call us toll free at 1-888-246-5359, fax to 416-314-3714 or write to:

Civil Remedies for Illicit Activities Office (CRIA) Ministry of the Attorney General 77 Wellesley Street West, P.O. Box 555Toronto, ON, CANADA M7A 1N3

All completed claims must refer to Notice 531-16 and be received by CRIA no later than 5:00 PM EST on October 10, 2018 or they will not be considered. Completed claims may be submitted either in writing to the above address or electronically to the above e-mail account or via fax.

You may not be eligible for compensation if you took part in the unlawful activity giving rise to the forfeiture proceeding. Even if you are eligible for compensation, your claim may be denied if you are unable to provide proof of your claim.

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Canadian securities regulators publish IIROC oversight review report
by FCNB on 


The Canadian Securities Administrators (CSA) today released the Oversight Review Report of the Investment Industry Regulatory Organization of Canada (IIROC). The report evaluates whether specific regulatory processes were effective, efficient, and were applied consistently and fairly, and whether IIROC complied with the terms and conditions of its Recognition Orders.

IIROC is the national self-regulatory organization with a mandate to oversee all investment dealers and trading activity on debt and equity marketplaces across Canada.

On behalf of the CSA, the oversight review was conducted jointly by CSA staff of eight of the provincial securities regulators that recognize IIROC: the Alberta Securities Commission; the Autorité des marchés financiers; the British Columbia Securities Commission; the Financial and Consumer Affairs Authority of Saskatchewan; the Financial and Consumer Services Commission of New Brunswick; the Manitoba Securities Commission; the Nova Scotia Securities Commission; and the Ontario Securities Commission. IIROC is also recognized by the Newfoundland and Labrador Office of the Superintendent of Securities, and the Prince Edward Island Office of the Superintendent of Securities.   

Based on the annual risk-based assessment of IIROC’s regulatory processes, CSA staff reviewed key regulatory processes in the following functional areas: financial and operations compliance, corporate governance, risk management, and financial operations. CSA staff also followed up on findings cited in previous oversight reports which were within the scope of the review, and acknowledged that IIROC made sufficient progress in resolving those issues. All other previous findings that were not within the scope of the review, primarily due to the time commitment required by IIROC to fully implement acceptable action plans, are being tracked separately by CSA staff.

In summary, CSA staff raised one governance related medium-priority finding and acknowledge that IIROC has already taken steps to resolve the finding. One low-priority finding was also raised. No other findings were noted.

The CSA, the council of the securities regulators of Canada’s provinces and territories, co-ordinates and harmonizes regulation for the Canadian capital markets.

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For more information:
Erin King
Financial and Consumer Services Commission
506 643-7045

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Joint Forum of Financial Market Regulators holds its Annual Meeting
by FCNB on 


The Joint Forum of Financial Market Regulators (Joint Forum) has concluded its Annual Meeting held in Montréal, Québec. The Joint Forum brings together members of the Canadian Council of Insurance Regulators (CCIR), the Canadian Securities Administrators (CSA), the Canadian Association of Pension Supervisory Authorities (CAPSA) and representation from the Canadian Insurance Services Regulatory Organizations (CISRO).

“The current financial services marketplace, marked by new and innovative technologies, products, services, and delivery models, combined with rapidly developing consumer expectations around service, transparency and accountability, presents a dynamic regulatory landscape with important challenges for regulators,” noted Patrick Déry, Superintendent, Solvency, at the Autorité des marchés financiers (Québec), Chair of the CCIR and Chair of this year’s Joint Forum meeting.

Plenary discussions focused on these realities and the important progress being made to support the development of innovative products, services and applications, and their impact over the members’ oversight models, to ensure consumers are protected and treated fairly. Of particular interest were lessons emerging from the development and implementation by the CSA of a regulatory sandbox to support fintech businesses, as well as various initiatives led under the Cooperative Market Conduct Supervision Framework by CCIR members.

“This annual meeting of the Joint Forum represents a unique opportunity for provincial and territorial financial market regulators to share information on common developing trends observed in the markets they oversee with a view to identifying cross-sectoral issues that pose real threats to the protection of investors and consumers. This meeting’s extensive attendance by members of all Joint Forum constituent organizations is evidence of the regulators’ engagement to streamline and harmonize regulatory outcomes across sectors and jurisdictions where required,” said Louis Morisset, CSA Chair and President and CEO of the Autorité des marchés financiers (Québec). 

Joint Forum participants also focused on the expansion of automated financial advice, recovery of enforcement sanctions and administrative monetary penalties, and cooperative supervision activities. CCIR members provided updates on the prototype fee statement for segregated funds. Projects relating to the enhancement of obligations registrants owe their clients and regulation of investment fund fees, both pursued by the CSA, were also discussed. Finally, a CAPSA presentation on leverage investment strategies of pension plans was made, and members shared updates on ombudservice oversight across banking services and investments, life, health and general insurance sectors. The organizations were all focused on consumer protection and the fair treatment of consumers.

“As members of the Joint Forum, we are committed to providing greater opportunities for regulators to exchange views and share best practices, enhance cooperation and build regulatory capacity to support the consumer expectations as mentioned above, while ensuring consumers are protected and treated fairly,” added Angela Mazerolle, Chair of CAPSA and Superintendent of Pensions and Insurance at the Financial and Consumer Services Commission (New Brunswick).

Coming away from this year’s meeting, the Joint Forum is considering how to best increase the regular periodic sharing of issues facing regulators in each sector.

For more information:
Erin King
Financial and Consumer Services Commission
506 643-7045

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Canadian securities regulators seek input on the proposed derivatives registration rule
by FCNB on 


The Canadian Securities Administrators (CSA) today published for comment Proposed National Instrument 93-102 Derivatives: Registration and Proposed Companion Policy 93-102 Derivatives: Registration (collectively, the Proposed Instrument). The Proposed Instrument establishes a new regime for the registration of dealers and advisers transacting in the over-the-counter (OTC) derivatives markets in Canada.

 

The Proposed Instrument together with Proposed National Instrument 93-101 Derivatives: Business Conduct (NI 93-101), which was published for comment on April 4, 2017, establishes a comprehensive investor protection regime for OTC derivatives markets that is consistent with international standards and foreign requirements. The CSA has developed the Proposed Instrument to help protect investors, reduce risk, and improve transparency and accountability in the OTC derivatives markets.

 

“Canadian firms, large and small, as well as individuals, are using the OTC derivatives market to hedge their business and financial risks and for speculative purposes,” said Louis Morisset, CSA Chair and President and CEO of the Autorité des marchés financiers. “We believe the proposed registration regime will allow securities regulators to contribute to protecting these firms and individuals in their derivatives activities by establishing minimum standards of integrity, solvency and proficiency for firms and individuals offering OTC derivatives products or related advice.”

 

“Many of the entities that would be required to be registered under the Proposed Instrument are already subject to other regulatory regimes,” continued Mr. Morisset.  “The Proposed Instrument includes provisions to minimize duplicative regulation for these entities.” 

 

In developing the Proposed Instrument, the CSA leveraged the existing registration regime in the securities market while tailoring the requirements to the OTC derivatives market. The Proposed Instrument sets out fundamental obligations for OTC derivatives dealers and advisers. These include requirements designed to mitigate risks to market participants, requirements for key staff members of derivatives dealers and advisers to have specific education, training and experience, and requirements for firms and individual representatives to register with applicable securities regulators in Canada.

 

The Proposed Instrument provides exclusions and exemptions for certain persons or companies from the requirements to register as a derivatives dealer or as a derivatives adviser subject to certain conditions.  

 

The CSA anticipates publishing NI 93-101 for a second comment period during the consultation period for the Proposed Instrument. The CSA is holding an extended comment period (150 days) on the Proposed Instrument, to give stakeholders the opportunity to consider the Proposed Instrument and NI 93-101 together. Comments should be submitted in writing on or before September 17, 2018.

 

The Proposed Instrument can be found on CSA members’ websites.

 

The CSA, the council of the securities regulators of Canada’s provinces and territories, co-ordinates and harmonizes regulation for the Canadian capital markets.

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For more information:
Erin King
Financial and Consumer Services Commission

506 643-7045
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Canadian securities regulators seek comment on soliciting dealer arrangements
by FCNB on 


The Canadian Securities Administrators (CSA) today published for comment CSA Staff Notice 61-303 and Request for Comment Soliciting Dealer Arrangements. The notice outlines regulatory issues raised by soliciting dealer arrangements and seeks input on the practice, which generally involves an issuer paying a dealer to successfully solicit securities from a securityholder in connection with corporate transactions.

“The practice of soliciting dealer arrangements raises certain securities regulatory issues, notably around conflicts of interest and the integrity of the voting/tendering process,” said Louis Morisset, CSA Chair and President and CEO of the Autorité des marchés financiers. “In light of these issues, we believe it is appropriate to assess how these arrangements are being used and whether further regulatory action is appropriate.” 

Soliciting dealer arrangements may be used to solicit securities from securityholders to vote in connection with a matter requiring shareholder approval, or to tender securities for a takeover bid. These arrangements may also be used to incentivize dealers to contact securityholders to participate in a rights offering, to exercise rights to redeem or convert securities, or to attain the requisite quorum for amendments to documents affecting the rights of securityholders.

The Staff Notice can be found on CSA members’ websites.

Comments should be submitted in writing by June 11, 2018.

The CSA, the council of the securities regulators of Canada’s provinces and territories, co-ordinates and harmonizes regulation for the Canadian capital markets.

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For more information:
Erin King
Financial and Consumer Services Commission
506 643-7045

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Canadian securities regulators outline disclosure expectations for real estate reporting issuers
by FCNB on 


The Canadian Securities Administrators (CSA) today published CSA Staff Notice 52-329 Distribution Disclosures and Non-GAAP Financial Measures in the Real Estate Industry. The notice details findings of a recent review and provides additional guidance on disclosure expectations relating to distributions and non-GAAP financial measures for real estate reporting issuers.

 

“We continue to closely monitor non-GAAP financial measures in the real estate sector,” said Louis Morisset, CSA Chair and President and CEO of the Autorité des marchés financiers. “Investors need sufficient information to understand what these measures represent and how they are calculated. Real estate reporting issuers are expected to provide transparent disclosures regarding distributions and non-GAAP financial measures.”

 

The CSA reviewed distribution disclosures relative to National Policy 41-201 Income Trusts and Other Indirect Offerings and non-GAAP financial measure disclosures relative to CSA Staff Notice 52-306 (Revised) Non-GAAP Financial Measures. The findings of the review indicate that the quality of disclosure pertaining to distributions and non-GAAP financial measures in the real estate industry needs improvement.

 

Key findings from the review included the following items. For distributions, staff found opportunities for better disclosure when distributions exceed operating cash flows. For non-GAAP financial measures, staff identified a lack of transparency about various adjustments made in arriving at non-GAAP financial measures, particularly those relating to maintenance capital expenditures and working capital. Staff also noted instances where non-GAAP financial measures were presented with greater prominence than the most directly comparable measure specified under the issuer’s GAAP.

 

Non-GAAP financial measures and distribution disclosures continue to remain areas of focus for the CSA, and real estate reporting issuers are encouraged to refer to the guidance published.

 

The notice can be found on CSA members’ websites.

 

The CSA, the council of the securities regulators of Canada’s provinces and territories, co-ordinates and harmonizes regulation for the Canadian capital markets.

 

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For more information:Erin KingFinancial and Consumer Services Commission506 643-7045
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Canadian securities regulators report on climate change-related disclosure project
by FCNB on 


The Canadian Securities Administrators (CSA) today published CSA Staff Notice 51-354 Report on Climate change-related Disclosure Project.  The report summarizes the findings of the CSA’s previously announced project to review the disclosure by reporting issuers of risks and financial impacts associated with climate change, and outlines its plans for future work.

“We now have a better understanding of the current state of climate change-related disclosure in Canada,” said Louis Morisset, CSA Chair and President and CEO of the Autorité des marchés financiers.  “Moving forward, we will aim to improve the disclosure of risks and related governance and oversight processes, while recognizing both investors’ and issuers’ perspectives.”

The CSA intends to develop new guidance and initiatives to educate issuers about the disclosure of climate change-related risks, opportunities and financial impacts. The CSA also intends to consider new disclosure requirements regarding non-venture issuers’ corporate governance practices in relation to material business risks including, for example, emerging or evolving risks and opportunities arising from climate change, potential barriers to free trade, cybersecurity and disruptive technologies. As a general rule, materiality is the determining factor in considering whether information must be disclosed to investors. 

In addition to these initiatives, the CSA will continue to monitor the quality of issuers’ climate change-related disclosures, best practices in this area and developments in reporting frameworks. The CSA will also continue to assess whether investors require additional types of information, such as disclosure of certain categories of greenhouse gas emissions, to make investment and voting decisions.

The report reflects the CSA’s consideration of key research findings, a review of the disclosure of large TSX-listed issuers, a survey of TSX-listed issuers and extensive consultation with investors, issuers and other stakeholders. The CSA also reviewed how current Canadian securities disclosure requirements differ from or are consistent with international climate change-related disclosure requirements and voluntary frameworks.

Key themes from the CSA’s review are outlined in the notice. A backgrounder with additional details regarding the review can also be found on CSA members’ websites.

The CSA, the council of the securities regulators of Canada’s provinces and territories, co-ordinates and harmonizes regulation for the Canadian capital markets.

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For more information:
Erin King
Financial and Consumer Services Commission
506 643-7045
__________________________________________________________________________________________________________________________________

Backgrounder: CSA Staff Notice 51-354 Report on Climate change-related Disclosure Project

Project overview

On March 21, 2017, the Canadian Securities Administrators (CSA) announced a project to review the disclosure by reporting issuers (issuers) of risks and financial impacts associated with climate change.

The objectives of the project were:
  • to assess whether Canadian securities legislation and related guidance are sufficient for issuers to determine what climate change-related disclosures they should provide,
  • to better understand what climate change-related information investors need to make informed voting and investment decisions, and
  • to see whether or not issuers are providing appropriate disclosures in this regard.

The CSA is publishing CSA Staff Notice 51-354 Report on Climate change-related Disclosure Project to report on the work performed in connection with the project and the key themes identified, and to outline the CSA’s plans for future work in this area.

Research and consultation

The CSA completed an extensive and multifaceted review to gather information on the state of climate change-related disclosure in Canada. This work included:

  • Disclosure review – Focused review of mandatory and voluntary climate change-related disclosure of 78 large issuers from the S&P/TSX composite Index.
  • Online survey – Review of responses to a voluntary anonymous online survey sent to all TSX-listed issuers regarding current climate change-related disclosure practices (97 issuers responded to survey). 
  • Consultations – Fifty (50) consultations, including in-person focus groups with reporting issuers, investors, advisors and other users of disclosure (“users” refers to investors, investor advocates, experts, academics, crediting rating agencies and analysts).
  • Research – Review of climate change-related disclosure requirements in selected jurisdictions outside of Canada, as well as prominent voluntary disclosure frameworks.

Key themes

A number of key themes emerged from the work completed for the project. These include, among others:

Materiality – As a general rule, materiality is the determining factor in considering whether information must be disclosed to investors. The project revealed a wide range of perspectives on the materiality of climate change-related risks and opportunities. Most of the users consulted considered climate change-related risks to be a conventional business issue affecting issuers in a wide range of industries, and not solely a sustainability or environmental issue. In their view, the significance of these risks is not adequately reflected in the continuous disclosure documents of reporting issuers. Most issuers consulted acknowledged the materiality of some climate change-related information, such as risk factors and regulatory considerations, while noting that other climate change-related information is either not material, or is so uncertain or remote that its ultimate materiality and financial impact cannot be assessed or quantified.

Current disclosure practices – Our disclosure review did not result in any re-filings, restatements or other corrective actions being requested. However, there is variation in disclosure practices and room for improvement in the disclosure of several issuers.

Dissatisfaction with state of disclosure – Substantially all users consulted were dissatisfied with the state of climate change-related disclosure and believe that improvements are needed. Some users suggested that current disclosure requirements, supplemented by additional guidance and education, may be adequate, while others maintained that new disclosure requirements should be imposed. Additionally, substantially all users consulted believe that issuers in many industries will be affected by climate change-related risks and should provide disclosure regarding their governance and oversight of climate change-related risks. Users’ views differed on whether issuers should be required to disclose greenhouse gas emissions and/or scenario analyses in their regulatory filings.

Concerns about mandatory disclosure requirements – Many issuers identified concerns about mandatory disclosure requirements in relation to climate change. Issuers expressed concerns about regulatory burden, and also noted that some of the demand for climate change-related information is driven by considerations other than investment considerations, and therefore may not be aligned with the interests of shareholders. Issuers also expressed concern that mandatory reporting could result in a disproportionate emphasis on climate change-related risks relative to other equally or more significant risks. Issuers indicated a strong preference for the current disclosure requirements, where information determined to be material for purposes of securities law in Canada must be disclosed in continuous disclosure filings, while additional non-material information may be generally disclosed on a voluntary basis.

Next steps

Based on the findings of the project, the CSA intends to undertake work in the following three areas:
  • Guidance and education – The CSA intends to develop new guidance and consider initiatives to educate Canadian reporting issuers on the disclosure of climate change-related risks, opportunities and financial impacts.
  • Focus on risk governance and oversight – The CSA intends to consider new disclosure requirements in respect of issuers’ governance processes relating to material risks and opportunities and how issuers oversee the identification, assessment and management of material risks.  This would include, for example, emerging or evolving risks and opportunities arising from climate change, potential barriers to free trade, cyber security and disruptive technologies.
  • Monitoring – CSA staff will continue to monitor the ongoing development of climate change-related disclosure practices, and evaluate the disclosure of issuers to assess whether their disclosure continues to evolve and improve. This would include monitoring developments in reporting frameworks, evolving disclosure practices and users’ need for additional types of climate change-related disclosure, including whether disclosure of certain categories of greenhouse gas emissions are warranted in the future.

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Canadian securities regulators publish amendments relating to designated rating organizations
by FCNB on 


The Canadian Securities Administrators (CSA) today published final rule amendments and policy changes relating to designated rating organizations (DROs) and credit ratings of DROs.

The amendments relate to an application by Kroll Bond Rating Agency, Inc. (Kroll) for designation as a DRO. The CSA has amended National Instrument 44-101 Short Form Prospectus Distributions and National Instrument 44-102 Shelf Distributions to recognize the credit ratings of Kroll, but only for the purposes of the alternative eligibility criteria for issuers of asset-backed securities to file a short-form prospectus or shelf prospectus, respectively. The amendments also address other matters. Provided all necessary Ministerial approvals are obtained, the amendments will be in effect on June 12, 2018.

Subject to confirmation and completion of certain matters, staff expect that Kroll will be designated as a DRO for purposes of the alternative eligibility criteria when the amendments come into effect.
 
The notice of amendments also provides an update on proposed amendments to National Instrument 25-101 Designated Rating Organizations (NI 25-101) that were published for comment on July 6, 2017. The proposed amendments to NI 25-101 were meant to reflect new European Union (EU) requirements for credit rating organizations, to ensure the EU continued to recognize the Canadian regime for DROs as “equivalent” for regulatory purposes after these new requirements go into effect on June 1, 2018. Subsequently, the European Securities and Markets Authority (ESMA) published final guidance in November 2017 which indicates that since the existing DROs in Canada are only relying on the EU “endorsement” regime, the CSA does not have to finalize the amendments to NI 25-101 before the EU equivalency deadline of June 1, 2018. The CSA has asked ESMA for a formal decision on this matter.

Consequently, the CSA is still considering the comments received during the comment period and plans to delay the amendments to NI 25-101 until a later date in 2018. Those amendments to NI 25-101 would be required in order for the Canadian regime for DROs to be recognized within the EU “equivalence/certification” regime. 

The notice of amendments can be found on CSA members’ websites.

The CSA, the council of the securities regulators of Canada’s provinces and territories, co-ordinates and harmonizes regulation for the Canadian capital markets.

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For more information:
Erin King
Financial and Consumer Services Commission
506 643-7045

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