Canadian securities regulators are adopting some tweaks to the passport system that aim to make it easier for orders made in one jurisdiction to apply across the country.
The Canadian Securities Administrators (CSA) are introducing a new rule that will allow cease trade orders stemming from the failure to file continuous disclosure documents to automatically apply in multiple jurisdictions. They are also adopting amendments to the passport system that will allow issuers to only file with their principal regulator when they apply to cease to be a reporting issuer; and to have this apply in all jurisdictions where they have reporting issuer status.
The new measure to automatically apply certain cease trade orders (CTOs) follows the Alberta Securities Commission's (ASC) move last year to adopt a provision that automatically reciprocates sanctions and restrictions, including CTOs, that are imposed in other provinces. "Other jurisdictions are considering enacting a similar provision," the CSA says in a notice outlining the new measures.
"The new failure-to-file cease trade order rule will allow Canadian securities regulators to more efficiently carry out their common mission to protect investors and the integrity of Canada's capital markets," said Louis Morisset, chair of the CSA and president and CEO of the Autorité des marchés financiers (AMF), in a statement.
The Ontario Securities Commission (OSC), which does not participate in the passport system, is not adopting either new measure. However, the CSA indicates that "streamlined interfaces… will allow Ontario to opt into an order issued by another jurisdiction that is acting as principal regulator." The ASC is also not adopting the new rule on CTOs; instead, it will rely on its new provision for reciprocating sanctions without introducing the new rule.
The new measures are slated to take effect on June 23.