A New Records Filing System is Coming to the Canadian Capital Markets

The Canadian Securities Administrators (CSA) are seeking input on a comprehensive records filing system for Canada’s capital markets (the Renewed System) that will, among other things, replace the System for Electronic Document Analysis and Retrieval (SEDAR), the System for Electronic Disclosure by Insiders (SEDI) and the National Registration Database (NRD).

The Renewed System was laid out in a serious of CSA staff notices and national instruments as well as rule, policy and instrument amendments on May 2, 2019 (the Proposed Amendments).

The Renewed System is expected to be implemented in four phases beginning in early 2021. The first phase will include the replacement of SEDAR, the National Cease Trade Order Database, the Disciplined List and certain filings in the British Columbia Securities Commission eServices system and the Ontario Securities Commission Electronic Filing Portal. Filings made by insiders, registrants and other regulated entities will be addressed in future phases.

Proposed Amendments

The primary purpose of the Proposed Amendments in the first phase is to introduce National Instrument 13-103 – System Replacement Rule (NI 13-103), the new central rule outlining the requirements and procedure for the Renewed System.

According to the CSA, the Renewed System will have several benefits once it is fully implemented, by being more uniform, expanding public search functionality, enforcing modern access controls and providing more secure, single-window access for market participants to file documents and pay fees. The Proposed Amendments have been designed by the CSA to reduce annual system fees by seven per cent or $1.7 million, minimize fee changes (especially for smaller filers) and simplify the fee design by adopting flat fees and eliminating some fees, as well as to add new fees for significant new services.

NI 13-103 will require issuers to electronically transmit each document required or permitted to be filed with or delivered to a securities regulatory authority through the Renewed System, excluding a limited number of specified documents. In addition, filers must pay regulatory and system fees through the Renewed System.

The Proposed Amendments would also replace principal and non-principal regulator fees with flat fees per filing type, paid only to a filer’s principal regulator. These flat fees are intended to better align system fees that users must pay with the CSA’s anticipated costs to operate the Renewed System, based on market participants’ expected system usage. System fees will rise in some cases and fall in other cases, based primarily on filing behaviour and volume of use. Further, system fees for certain filing types would be removed while some new fees for filing types would be introduced.

Next Steps

The Proposed Amendments have been published for a 90-day public comment period expiring on July 31, 2019. The Renewed System is expected to be implemented in four phases beginning in early 2021.

You can read more here and here.

DISCLAIMER: This post is intended to convey general information about legal issues and developments as of the date above. It does not constitute legal advice and must not be treated or relied on as such.