The Alberta Securities Commission has given final approval of a couple of new rules implementing the National Registration Database at the end of next March.

Some of the new rules will take effect February 3, 2003, requiring a firm to enroll to use NRD prior to the launch of NRD if a firm is registered at that time.

The remaining provisions are effective March 31, 2003, the date on which NRD is scheduled to launch.

Proposed Multilateral Instrument 31-102 National Registration Database establishes requirements for the electronic submission of information through NRD.

It requires that certain registration information be submitted to regulators electronically through the NRD, and that fees paid in respect of registration and the use of the NRD are paid through NRD.

A companion policy consolidates and harmonizes requirements regarding the initial submission of registration information and the updating of that information.

The new rules have few changes, and they reveal that the regulators reject the industry’s most notable complaints about the new system. For example, NRD fees will increase one commentator’s registration costs by nearly 40% per year. And, it says that the savings provided by the system will not offset this amount. The regulators respond that, “Based on the conclusions of the survey conducted by the chief economist’s office of the Ontario Securities Commission, the Canadian Securities Administrators is of the view that over time most firms will realize significant benefits from the implementation of NRD.”

Another firm said that the CSA should reduce the proposed NRD user fees by applying registration fees to pay for NRD. The CSA says, “NRD user fees cover the cost of NRD while registration fees cover the cost of ongoing regulator operations. If, following the implementation of NRD, a regulator realises a reduction in its operational costs and decides to pass those savings to industry, that should be done by reducing registration fees.”

To suggestions that a mutual reliance system should be implemented, the CSA says, “The use of mutual reliance in other areas of securities regulation such as registration is being considered. While there is no formal mutual reliance registration system yet, NRD will provide many of the benefits of such a system by streamlining the submission and response process. NRD will act as a foundation for the regulators to create a formal mutual reliance registration system.”

It notes that discussions are being undertaken with the Mutual Fund Dealers Associaton about its members using the system, although the MFDA’s requirements have not been finalized.

The CSC rejects calls to scrap the NRD in the face of the BC Securities Commission considering disbanding the current registration structure. “One jurisdiction asked industry to comment on ideas for reforming the registration process. However, to date, no jurisdiction has implemented any proposal to do so. NRD will provide benefits for the present registration regime and therefore it is not prudent to delay the delivery of such benefits based on ideas that may or may not come to fruition,” it says.