Overview
The Portfolio Management Association of Canada (PMAC), through its Industry, Regulation & Tax Committee, is pleased to have the opportunity to provide the Cooperative Capital Markets Regulatory System (CCMRS) with comments on the CMRA Regulation 45-501 – Prospectus and Registration Exemptions (45-501, collectively, the Consultation).
As background, PMAC represents over 250 investment management firms registered with one or more members of the Canadian Securities Administrators (CSA) to do business Canada as portfolio managers. In addition to this primary registration, the majority of members are dually registered as investment fund managers and/or exempt market dealers. PMAC members encompass both large and small firms managing total assets in excess of $1.8 trillion for institutional and private client portfolios. Our members provide investment advice to individuals as well as institutional investors such as pension plans, foundations, endowments and first nations from coast to coast.
PMAC has been a strong supporter and vocal advocate for a common securities regulator for many years[1] as we view a national regulator as critical to enhancing investor protection and the global competitiveness of Canada’s capital markets, fostering a strong national economy and monitoring and managing systemic risk.
Importantly, PMAC views the goals of improved investor protection and streamlined regulation leading to operational and financial efficiency as critical objectives for the CCMRS to achieve from its outset.
General Comments
Overall, PMAC views the Consultation on proposed 45-501 as a positive step toward the implementation of an effective national securities regulatory system. Members are appreciative of the reduced filing obligations proposed under 45-501 with respect to prospectus-exempt issuances of securities.
However, PMAC is concerned about the impact of the remaining numerous jurisdictional exemptions in 45-501 which create a non-harmonized instrument within the CCRMS system and members have voiced fears that 45-501 may represent a re-packaging of existing regulations with minimal additional benefit. They expressed serious concern and disappointment that a non-nationally harmonized instrument and, to a lesser extent, the continued availability of certain jurisdiction-specific exemptions, will mean that, in practice, 45-501 may do little to streamline regulation and lead to operational and financial efficiency.
We are also concerned about the silence from the CCMRS on matters including interface between participating and non-participating jurisdictions and fees. We believe that additional harmonization and additional communication regarding these matters can help stakeholders be more prepared for and supportive of the launch of the CCMRS.
[1] Please see the PMAC website for a listing of all government submissions including our submission dated December 8, 2014 with respect to the CMSA and the draft Provincial Capital Markets Stability Act consultation.