The provinces and territory (British Columbia, New Brunswick, Ontario, Prince Edward Island, Saskatchewan, and Yukon – the Participating Jurisdictions) participating in the development of the Cooperative Capital Markets Regulatory System (Cooperative System) have published for comment a draft prospectus and related registration exemption regulations (the draft regulations) under the proposed provincial-territorial Capital Markets Act (CMA) for a period ending August 7, 2018.

When in force, the CMA and the initial regulations would constitute the single set of substantive provincial/territorial capital market laws under the Cooperative System. The draft regulations currently are contemplated as a possible single set of prospectus and related registration exemptions that would apply in the Participating Jurisdictions on the launch of the Cooperative System. These draft regulations were not part of the draft initial regulations that were published for comment in August 2015.

The Participating Jurisdictions also plan to publish for comment a draft prospectus exemption for certain distributions made through investment dealers in the near future.  Additionally, they are also considering additional regulations on a registration exemption for certain financial institutions, as well as transitional matters and fees under the CMA and the federal Capital Markets Stability Act (CMSA). Consultations on these items are expected in advance of the launch of the Capital Markets Regulatory Authority (CMRA).

The CMRA, when in place, will administer the Cooperative System, and is intended to be a single operationally independent capital markets regulatory authority, with an expert Board of Directors, a regulatory division, and an adjudicative tribunal. It will administer the CMA and the CMSA and a single set of regulations under authority delegated by the participating jurisdictions. It is intended to be responsible for regulatory, enforcement, and adjudicative functions, and will have the authority to identify and manage systemic risk. The CMRA will represent Canada internationally in matters of capital markets regulation.

Currently, the timeline for the implementation of Cooperative System is in a holding pattern pending an appeal to the Supreme Court of Canada by the Quebec Court of Appeal that was heard on March 22, 2018, on the constitutionality of elements of the Cooperative System. The Supreme Court’s decision will determine the future of the Cooperative System. If the Supreme Court overturns the Quebec Court of Appeal’s decision, the Participating Jurisdictions will be able to go ahead with their launch plan of the Cooperative System. As it stands now, the Participating Jurisdictions are presently reviewing the timelines for the launch, while waiting for the Supreme Court to render its decision.

The Participating Jurisdictions do note however, they will respect the Supreme Court’s decision and will proceed accordingly. They will provide an update on the timing of the launch of the Cooperative System following the decision and the completion of their implementation timeline review.  At present, the launch of the Cooperative System is not expected to occur by the end of 2018.

More information and further updates on the Cooperative Capital Markets Regulatory System can be found here.

For more information, please call Barbara Hendrickson at BAX Securities Law (416) 601 -1004.

This publication is not intended to constitute legal advice. No one should act on it or refrain from acting on it without consulting with a lawyer. BAX does not warrant or guarantee the accuracy or currency or completeness of the publication. No part of this publication may be reproduced without the prior written permission of BAX Securities Law.