The Canadian Securities Administrators (CSA) is launching the first phase of an initiative designed to reduce the regulatory burden on various components of the securities markets.
Specifically, the CSA published a consultation paper on Thursday that focuses on options for curbing the burden on issuers. The CSA also intends to launch separate consultations on the investment fund business and, further down the road, it will look at the rules for registrants, such as dealers and fund managers.
The consultation paper published on Thursday proposes a variety of possible reforms that could cut down on the compliance burden for issuers, both when companies are raising capital (prospectus requirements) and in terms of their ongoing costs (continuous disclosure requirements).
“We are seeking feedback from market participants and stakeholders to identify specific areas of securities legislation where the regulatory burden on reporting issuers may be out of proportion to the regulatory objectives sought to be achieved,” the CSA’s paper says.
The CSA proposes to streamline certain prospectus requirements; reduce ongoing disclosure requirements by permitting firms to report semi-annually rather than quarterly, which is the practice in the UK and Australia, as well as by removing required elements in those filings; eliminating overlapping requirements; and expanding the ability of firms to distribute documents online rather than in paper form.
“Regulatory requirements and the associated compliance costs should be proportionate to the regulatory objectives sought,” says Louis Morisset, CSA chairman and president and CEO of the Autorité des marchés financiers (AMF). “The purpose of this consultation is to identify potential ways to reduce regulatory burden in the public markets without compromising investor protection or the efficiency of the capital markets.”
Comments on the consultation paper are due to the CSA by July 7.
Read: Will regulatory reforms be good for investment industry?
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