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(March 10, 2005) The National Registration System (NRS) — which goes live April 4 — will make it easier for securities firms to register representatives in more than one province. At least it will once compliance and registration staffers get used to the system.
Kenneth Parker, capital markets director for the Alberta Securities Commission, says NRS won’t relieve anyone from having to file, but also won’t increase the number of people who must file.
And it will reduce the paperwork for representatives being registered in more than one province. “A company filing multiple registrations will continue to file with its principal regulator,” he said at an NRS conference earlier this week sponsored by the Strategy Institute. “And then you send copy paperwork to the non-principal regulators.”
Ontario Securities Commission registration manager David Gilkes added: “And, of course, take the opportunity to staple a cheque to the package.” He, and others, stressed there will be no extra fees to add registrations through NRS — other than those incurred to put a representative on the books in another province.
Prema Thiele, a partner at Borden, Ladner, Gervais in Toronto said the process of adding jurisdictions will be streamlined. “In cases where B.C. is the principal regulator and you want to add Saskatchewan, there will be nothing other than the election form to file in Saskatchewan,” she said. Since the IDA stands in the stead of the B.C. Securities Commission (BCSC), a firm would file with the IDA and then add the other province.
Further, Susan Toews, a senior legal counsel with the BCSC, said even though registration in some provinces requires proof of insurance or other documentation — such as a copy of the firm’s compliance procedures — there is no need to send anything other than the registration. All of the support documentation will reside with the principal regulator.
The exception is Quebec, which will expect firms to provide a copy of their errors and omissions (E&O) insurance bonds, according to Nancy Chamberland of Quebec’s Autorité des Marchés Financiers. “In Quebec, you will have to take out E&O and will have to present proof with the application. There will be no exceptions,” she said. “Without it the firm can have its registration revoked.”
Chamberland further clarified that, in the event a registrant works for a Quebec-based company, but lives and works in another province, he or she will not be required to carry E&O insurance. In other cases, the bond provided to the principal regulator will have to show proof that securities activity also is covered in other provinces.
Registrants also will be expected to adhere to the rules of their principal regulators regarding minimum capital requirements, experience level requirements for compliance officers, as well as book and records retention.
That raises questions about provinces not wanting to admit representatives from provinces they perceive to have lower standards. The regulators insisted that won’t be a problem. If one province had no standards, Parker said, there would be issues. But that’s not the case, so he’s confident cross-registration won’t lead to regulators deciding a particular registrant is unfit to do business in their province.
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Toews added, “There are distinctions between fit and proper [what people have to do to get in the door] and [your] conduct in the local jurisdiction. Compliance matters fall under conduct.”
As to where an investment advisor needs to be registered, several speakers noted there is no material change in the way things have been handled since the 1930s. So, if a representative is living in British Columbia, he or she will have to be registered in B.C., even if all of the clients live in Ontario and everything is being done by phone.
Filed by Philip Porado, Advisor’s Edge, philip.porado@advisor.rogers.com
(03/10/05)