CSA to Reboot Electronic Document Filing Systems Starting in 2021
The Canadian Securities Administrators (CSA) are proposing to replace CSA national systems starting in 2021 with a more centralized CSA IT system (the 2021 System). CSA systems that will be affected include the System for Electronic Document Analysis and Retrieval (SEDAR), the National Cease Trade Order Database, the Disciplined List, the System for Electronic Disclosure by Insiders (SEDI), the National Registration Database (NRD) and the National Registration Search.
The CSA initiative will be implemented in 4 phases beginning in early 2021.
The first phase (Phase 1) will replace:
- the National Cease Trade Order Database
- the Disciplined List
- certain filings in the British Columbia Securities Commission eServices system (BC Portal)
- certain filings in the Ontario Securities Commission Electronic Filing Portal (OSC Portal).
The NRD and SEDI are not being replaced in Phase 1. Future phases of the 2021 System are expected to address filings made by insiders, registrants, derivatives market participants and regulated entities (such as marketplaces, self-regulatory bodies and clearing agencies).
The CSA proposals do not mention the Cooperative Capital Markets Regulatory System which might be in effect by 2021.
Public comments on the CSA proposals may be submitted until July 31, 2019.
In connection with the development of the 2021 System, the CSA is also proposing to change the structure of applicable system fees. The CSA proposes to replace principal and non-principal regulator fees with flat fees per filing type (flat fee design) paid only to a filer’s principal regulator.
Phase 1 Systems Amendments to Start in 2021
Phase 1 amendments will:
- Introduce a new national rule (NI 13-103) that will address requirements and procedures for the electronic transmission of documents through the 2021 System. Under the new NI 13-103:
- all documents to be filed with, or delivered to, a regulator will need to be transmitted electronically through the 2021 System, unless specifically excluded;
- certain prescribed documents will never be filed or delivered through the 2021 System, including documents in connection with a hearing, compliance review, proceeding or investigation;
- filers will have to complete and maintain a profile on the 2021 System; and
- regulatory and system fees will be paid through the 2021 System.
- Provide companion policy guidance on how the CSA interprets NI 13-103.
- Update existing SEDAR, BC Portal and OSC Portal filing requirements so that they work with the 2021 System.
- Repeal NI 13-101 and the SEDAR Filer Manual. The 2021 System will offer online help features that will replace the SEDAR Filer Manual.
- Amend existing rules and policies on the transmission of documents to a securities regulator.
The 2021 System is intended to provide more secure, “single-window” access for market participants to file documents and pay fees, using a more uniform filing process. Public search functionality will also be expanded.
CSA System Fees Proposals
In connection with the 2021 Systems, starting in Phase 1, the CSA is also proposing to adopt flat fees per filing type (the Fee Proposals). Under this proposed flat fee design, system fees would only be paid to a filer’s principal regulator.
System fees for certain filing types would be removed, while some new fees for filing types would be introduced. Some system fees will rise or be newly introduced, while some will fall, based primarily on filing behaviour and volume of use.
Other key features of the Fee Proposals include:
- Eliminating system fees associated with certain prescribed filing types.
- Harmonizing system fees and introducing system fees for new filing types:
- international dealers and advisers would pay a new system fee for filing a notice of reliance on the international dealer or adviser registration exemption in NI 31-103. International dealers and advisers will not be required to file this document using the 2021 System until a future phase;
- new system fees for a “pre-filing” or “application” transmitted through the 2021 System, including applications for exemptions;
- once registrant activities are included in the 2021 System, a registrant that requires an exemption from a registration requirement would file that application through the 2021 System and pay a related system fee; and
- under the 2021 System, all jurisdictions will require reports of exempt distribution (Form 45-106F1 Report of Exempt Distribution) to be filed through the 2021 System and filers to pay a system fee.
We invite you to contact a member of our Securities Regulation and Investment Products Group should you have any questions regarding how these proposals might affect your business.