The Portfolio Management Association of Canada (PMAC), through its Industry, Regulation & Tax Committee, is pleased to have the opportunity to submit the following comments regarding CSA Notice and Request for Comment – Proposed National Systems Renewal Program Rule and Related Amendments (the Renewed System Consultation) as well as on CSA Notice and Request for Comment – Proposed Repeal and Replacement of Multilateral Instrument 13-102 – System Fees for SEDAR and NRD (the System Fees Consultation).
PMAC represents over 270 investment management firms registered to do business in Canada as portfolio managers. In addition to this primary registration, most of our members are also registered as investment fund managers and/or exempt market dealers. PMAC’s members encompass both large and small firms managing total assets in excess of $2.7 trillion for institutional and private client portfolios.
We view the Renewed System as an important opportunity to improve information flow that is worth the short-term investment for the longer-term benefit of all stakeholders, including for investors and the CSA. Our comments are set out below.
Overview
1) Renewed System
PMAC is very supportive of the CSA’s proposed centralized information technology system (the Renewed System), as well as the harmonized approach the CSA is taking with respect to this Renewed System. We believe that replacing outdated, fragmented reporting systems and databases with more efficient, centralized, and secure technology is a key step in reducing regulatory burden, increasing information security, and facilitating information flow in an efficient and cost-effective manner.
2) System Fees
PMAC is also generally supportive of the System Fees Consultation and applauds the CSA for simplifying its fee design through the imposition of flat fees, the elimination of certain fees, minimizing fee changes – especially for small registrants, and for reducing system fees overall. The CSA’s proposal that filers only will pay fees to their principal regulator is a sensible way to simplify fee calculations and payment.
We are pleased that the CSA devised a new System Fee schedule that is anticipated to result in only 1% of filers having fee increases of over $1,000.
With respect to the new annual fee payable by international advisers to file a notice of reliance on the international adviser exemption (other than for those operating solely in Ontario and satisfying the Ontario Rule requirements), we believe the Proposal is unclear about how to determine which CSA member to which payment should be made. Since the new fee model is generally dictated by a registrant’s principal regulator, we believe further clarity as to how international advisers should pay the new fee is needed.