News Releases

Passport to Bay Street

May 28, 2007

Four of Canada’s securities regulators are meeting with some of Bay Street’s leading investment and business people in Toronto to explain how the securities passport system will improve capital-raising and simplify securities regulation across the country.


In a session today at the TSX Broadcast Centre (Gallery) at The Exchange Tower in downtown Toronto, Autorité des Marchés Financiers President & Chief Executive Jean St-Gelais, Manitoba Securities Commission Chair Don Murray, Alberta Securities Commission Chair Bill Rice and British Columbia Securities Commission Chair Doug Hyndman present how the Passport System – a set of harmonized regulatory requirements consistently interpreted and applied throughout Canada – will work.


The Canadian Securities Administrators’ (CSA) Proposed National Instrument 11-102 Passport System is a major step toward meeting the commitments set out in the memorandum of understanding regarding securities regulation among the governments of all provinces and territories, except Ontario.


“We want to give the investment industry and business people the facts about how the Passport System is a practical, achievable and significant improvement in how we regulate securities in this country,” says Hyndman.


“When we implement passport, market participants will get faster and simpler access to Canada’s capital markets because they will be allowed to deal with only one regulator and one set of harmonized requirements,” says St-Gelais.


The passport will allow someone to clear a prospectus, register as a dealer or adviser, or obtain a discretionary exemption from the home province regulator and have that clearance, registration or exemption automatically apply in all other provinces and territories. It also ensures that public companies are subject to only one set of harmonized continuous disclosure requirements.


All provinces, except Ontario, are currently fielding comments about the proposal for implementing the second phase of the passport system.


“With the comment period for this proposal ending today, we want to make sure that we hear from as many market participants as possible so coming here to Bay Street and answering their questions directly is important,” says Rice.


The proposed rule is expected to be finalized by the end of 2007 and implemented in stages starting in early 2008 as the proposed new national rules on prospectus requirements (NI 41-101) and registration requirements (NI 31-103) are finalized.


“This passport is a Pan-Canadian system that can simplify regulation and benefit businesses and investors in all provinces and territories,” said Murray. “Although the Ontario Securities Commission is not participating in the proposal, we have set it up so Ontario can join if it makes the necessary legislative changes.”


The proposed rule and related documents are available on various CSA members’ websites. The comment period ends today, May 28, 2007.


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


Passport system



What is passport?

A system that gives a public company or an investment firm access to markets across Canada by dealing only with its principal regulator and complying only with harmonized laws

How does it work?



·    Each market participant has a principal regulator

·    A market participant can clear a prospectus, register as a dealer, adviser or representative, or obtain an exemption across Canada through its principal regulator

·    Market participants are subject only to harmonized prospectus, registration and continuous disclosure requirements across Canada


What are the benefits of passport?



Simpler     – need only one decision

                – comply only with harmonized laws 

Faster       – deal with one regulator

Cheaper   – eliminate professional costs for dealing with multiple regulators and different laws



A market participant filing a prospectus across Canada will

·    need to comply only with harmonized prospectus requirements

·    have its prospectus reviewed by only one regulator

·    need a receipt for the prospectus from only one regulator



A firm or individual already registered as a dealer or adviser across Canada

·    is automatically transferred to passport unless the dealer or adviser opts out

·    continues to deal with the IDA, where applicable

A firm or individual seeking registration as a dealer or adviser across Canada will

·      file an application only in one jurisdiction

·      have its application reviewed by only one regulator

·      need a decision from only one regulator

All firms and individuals under passport will need to comply with

·    harmonized registration requirements

·    a few local requirements that CSA will attempt to harmonize

·    only with the terms and conditions imposed by their principal regulator


Discretionary exemptions

A market participant that needs a discretionary exemption in multiple jurisdictions will

·    file an application only in one jurisdiction

·    have its application reviewed by only one regulator

·    need a decision from only one regulator


Continuous disclosure

An issuer that is a reporting issuer across Canada will

·    need to comply only with harmonized continuous disclosure requirements

·    have any continuous disclosure exemption granted to it under the principal regulator system (MI 11-101) grandfathered


For more information:

Andrew Poon
British Columbia Securities Commission

Frédéric Alberro
Autorité des marchés financiers

Mark Dickey
Alberta Securities Commission

Ainsley Cunningham
Manitoba Securities Commission