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Canadian Securities Administrators Renew Term of Chair and Vice-Chair
by FCNB on 

Pursuant to the last meeting of the members of the Canadian Securities Administrators (CSA), the term of CSA President Louis Morisset, President and CEO of the Autorité des marchés financiers, was renewed for a further two years, until March 31, 2019. Mr. Morisset was first appointed CSA Chair in March 2015.


“I look forward to another two years as CSA Chair and to continuing the collaborative work with my colleagues from other jurisdictions as we remain firmly committed to delivering on the priorities set in our most recent three-year business plan,” said Mr. Morisset. “Our focus will remain on our fundamental objectives, which are to work collectively to protect Canadian investors while striving to further harmonize and advance securities regulation in Canada.”


The terms of Mr. Don Murray, Chair of the Manitoba Securities Commission, as CSA Vice-Chair, and of Ms. Maureen Jensen, Chair and CEO of the Ontario Securities Commission, as Chair of the Policy Coordination Committee, were also renewed for two years.


The CSA, the council of securities regulators of Canada’s provinces and territories, coordinate and harmonize regulation for the Canadian capital markets. Their mandate is to protect investors from unfair or fraudulent practices through regulation of the securities industry. Part of this protection is educating investors about the risk, responsibilities and rewards of investing.

 

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For more information

Andrew Nicholson
Financial and Consumer Services Commission
506 658-3021
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Canadian securities regulators announce climate change disclosure review project
by FCNB on 

The Canadian Securities Administrators (CSA) today announced a project to review the disclosure of risks and financial impacts associated with climate change. The project will gather information on the current state of climate change disclosure in Canada and internationally, and will include consultation with investors and reporting issuers.


The disclosure practices of public companies in relation to climate-related risks and financial impacts have attracted significant international attention in recent years. Several voluntary disclosure frameworks have been proposed, culminating in the publication in December 2016 of a set of recommendations by the Financial Stability Board’s Task Force on Climate-related Financial Disclosures.


“In light of the increased scrutiny being placed upon reporting issuers’ climate-related disclosure, we believe it is appropriate to review the state of such disclosure in Canada,” said Louis Morisset, CSA Chair and President and CEO of the Autorité des marchés financiers.  “As securities regulators, it is important to assess whether issuers provide appropriate disclosure regarding risks and financial impacts associated with climate change, which in turn assists investors in making informed investment decisions.”   


Reporting issuers in Canada are currently required to disclose material risks, which may include risks associated with climate change, among other environmental matters, in their periodic disclosure. The CSA has provided guidance with respect to these disclosure requirements in CSA Staff Notice 51-333 Environmental Reporting Guidance.


CSA Staff intend to review disclosure prepared by large TSX-listed reporting issuers on the material risks and financial impacts associated with climate change as well as related governance processes; gather feedback from reporting issuers about current disclosure practices through an anonymous online survey; and conduct focus groups with reporting issuers and investors. CSA Staff will also examine risk disclosure requirements related to climate change in other jurisdictions, as well as recently proposed voluntary disclosure frameworks.


The CSA expects to conduct its information gathering in spring and summer 2017 and publish a progress report outlining its findings upon completing its review.


A backgrounder with additional details regarding the climate change disclosure project can be found on CSA members’ websites.


The CSA, the council of the securities regulators of Canada’s provinces and territories, co-ordinates and harmonizes regulation for the Canadian capital markets.


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For more information

Andrew Nicholson
Financial and Consumer Services Commission
506 658-3021

______________________________________________________________________________________________________________________________________


Backgrounder: CSA climate change disclosure review project

 

Purpose

 

Many investors who are concerned about business risks and financial impacts associated with climate change are requesting improved disclosure by businesses in respect of such risks and impacts, and the actions being taken to address them. The demand for improved disclosure has resulted in the proposal of a number of voluntary frameworks for disclosure in respect of climate-related risks and impacts, along with other sustainability matters. In addition, a number of jurisdictions outside of Canada have adopted specific climate-related disclosure requirements for public companies.

 

With these considerations in mind, the CSA intends to review various matters in relation to the disclosure of risks and financial impacts associated with climate change.  The review will be conducted with a view to ensuring that issuers provide  high quality disclosure of material information, which in turn assists investors in making informed investment and voting decisions.

 

 

Project Overview

 

The project includes three key components:

 

1) Review of international disclosure requirements and voluntary frameworks

 

CSA Staff will review climate-related disclosure requirements in the securities laws of certain international jurisdictions, such as Australia, the United Kingdom and the United States, as well as recommendations contained in recently proposed voluntary disclosure frameworks with respect to climate-related disclosure, including:

  • International Integrated Reporting Framework published by the International Integrated Reporting Council
  • Global Standards for Sustainability Reporting published by the Global Reporting Initiative
  • Climate Risk Technical Bulletin published by the Sustainability Accounting Standards Board
  • Recommendations of the Task Force on Climate-Related Financial Disclosures published by the Financial Stability Board.

 

2) Review of continuous disclosure by reporting issuers

 

CSA Staff will review public disclosure by Canadian reporting issuers in both their mandatory continuous disclosure filings and voluntary sustainability reports, to assess the extent to which these filings currently include disclosure concerning material climate-related risks and financial impacts, and the governance processes related to them. The review is expected to focus on disclosure prepared by large TSX-listed reporting issuers for the 2016 financial year.

 

3) Consultations

 

CSA Staff will gather feedback from reporting issuers on climate-related disclosure and the associated costs. CSA Staff will also consult with investors to better understand the climate-related information they require to make an informed investment decision. These consultations will occur through an anonymous online survey of reporting issuers as well as focus groups with investors and reporting issuers.

 

Existing Disclosure Requirements

 

In Canada, reporting issuers are required to disclose material risks in their periodic disclosure, including climate-related risks. In 2010, the CSA published CSA Staff Notice 51-333 Environmental Reporting Guidance, which provided guidance to reporting issuers (other than investment funds) on existing continuous disclosure requirements relating to environmental matters under securities legislation in Canada.

 

Next Steps

 

The CSA expects to conduct its information gathering in spring and summer 2017 and publish a progress report outlining its findings upon completing its review.


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Canadian securities regulators highlight need for improved social media disclosure practices by reporting issuers
by FCNB on 

The Canadian Securities Administrators (CSA) today released CSA Staff Notice 51-348 Staff’s Review of Social Media Used by Reporting Issuers, which summarizes staff’s findings and disclosure expectations for reporting issuers that use social media.  

Staff reviewed the social media disclosure of 111 reporting issuers to determine if they were consistent with the principles of National Policy 51-201 Disclosure Standards and the requirements of National Instrument 51-102 Continuous Disclosure Obligations by providing balanced disclosure and ensuring that information is not selectively disclosed or misleading.

“Our review revealed concerns about how issuers are using social media websites, including specific instances where deficient social media disclosure may have resulted in material stock price movements and investor harm,” said Louis Morisset, CSA Chair and President and CEO of the Autorité des marchés financiers. “We expect issuers to adhere to high-quality disclosure practices, regardless of the venue of disclosure, and encourage issuers to implement a strong social media governance policy.”

The review found that a significant number of issuers, or 77 per cent, had not developed a specific governance policy to direct their disclosure practices on social media websites.  

As a result of the review, 30 per cent of issuers took action to improve their disclosure, including filing clarifying disclosure on SEDAR, removing social media disclosure and committing to improving disclosure and governance practices.  

The notice can be found on CSA members’ websites.  
The CSA, the council of the securities regulators of Canada’s provinces and territories, co-ordinates and harmonizes regulation for the Canadian capital markets.
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For more information

Andrew Nicholson
Financial and Consumer Services Commission
506 658-3021
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Canadian securities regulators release detailed data from review of women on boards and in executive officer positions
by FCNB on 

The securities regulatory authorities in Manitoba, New Brunswick, Newfoundland and Labrador, Northwest Territories, Nova Scotia, Nunavut, Ontario, Québec, Saskatchewan and Yukon (participating jurisdictions) today published the underlying data used to prepare CSA Multilateral Staff Notice 58-308 Staff Review of Women on Boards and in Executive Officer Positions – Compliance with NI 58-101 Disclosure of Corporate Governance Practices, which was published on September 28, 2016.

 

The data was compiled from public documents filed on SEDAR and includes the name, industry and year-end of the 677 non-venture issuers with year-ends between December 31, 2015 and March 31, 2016 as it relates to women on boards and in executive officer positions.

 

The data can be found on the websites of the participating jurisdictions.

 

The CSA, the council of the securities regulators of Canada’s provinces and territories, co-ordinates and harmonizes regulation for the Canadian capital markets.

- 30 -

For more information

Andrew Nicholson
Financial and Consumer Services Commission
506 658-3021
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Canadian Securities Administrators Urge Canadians to Protect Themselves Against Binary Options Fraud
by FCNB on 

The Canadian Securities Administrators (CSA) are warning Canadians about binary options scams and urging them to educate themselves on the risks and serious consequences of binary options. In Canada, the number of victims affected by this form of fraud is on the rise, and these ‘get rich quick’ schemes are dangerous.


“In response to this escalating problem, we formed a Binary Options Task Force to raise awareness and protect Canadians from binary options scams and launched a new resource site,

www.BinaryOptionsFraud.ca, as part of a campaign to educate Canadians about such scams,” said Louis Morisset, Chair of the CSA and President and CEO of the Autorité des marchés financiers.


“Binary options fraud is a leading type of investment fraud facing Canadians today,” said Jason Roy, Chair of the CSA Binary Options Task Force and senior investigator with the Manitoba Securities Commission. “We want Canadians to know that there are no registered individuals or firms permitted to trade these products in Canada. We are seeing families of every demographic being affected by financial losses due to binary options trading. We want Canadians to understand the financial dangers associated with these products.”


Binary options take the form of a wager in which investors bet on the performance of an underlying asset, often a currency, stock index, or share, and the timeframe on this bet is typically very short, sometimes hours or even minutes. When the ‘investment’ period is up, the investor receives a predetermined payout or loses the entire amount.


Binary options ‘traders’ rely on websites and social media ads to market their product, which makes it difficult to determine their location. The overwhelming majority of binary options sites are rigged to lure in victims with small early returns. In many instances, no actual trading occurs, and the entire interaction takes place for the purpose of stealing money. Once larger sums are invested, the losses begin to spiral, often through unauthorized credit card withdrawals and requests to send money offshore to an unregistered firm. Once a victim has lost their money, it is almost impossible to recuperate their losses.


The CSA’s Binary Options Task Force has undertaken a number of important initiatives to protect Canadians from unregistered sellers, including working with online advertisers and mobile companies to eliminate binary option advertising and mobile apps in Canada, coordinating efforts with international organizations and governments, creating and maintaining a system to share and track fraudulent activity across the country, and working closely with the fraud teams at major credit card and financial institutions to cut off funding mechanisms.


The CSA urges Canadians to take the following precautions when considering investing in any new product:

  • Never send money to anyone you don’t know, on the Internet or over the phone.
  • Never give out sensitive personal information online or over the phone.
  •  Research investments before making a commitment.
  • Make sure the firm and/or individual offering the investment is registered by checking their professional registration status at www.AreTheyRegistered.ca.
  • Check statements (e.g., bank, credit card) regularly and report any unauthorized purchases or charges made by vendors you do not know.


Binary options sellers have no specific targeted victim profile, and every age, investor skill level, and gender has been affected. For more information, and to report any suspected or confirmed fraudulent activity to the CSA, please visit www.BinaryOptionsFraud.ca.


###


About the Canadian Securities Administrators (CSA)

The CSA, the council of securities regulators of Canada’s provinces and territories, coordinates and harmonizes regulation for the Canadian capital markets. Their mandate is to protect investors from unfair or fraudulent practices through regulation of the securities industry.


Media inquiries:

Janine Allen

Kaiser Lachance Communications

T: 647.725.2520 x 214

C: 416.271.7002

janine.allen@kaiserlachance.com


For any concerns related to binary options or other possible fraud or scams, please visit www.securities-administrators.ca or www.binaryoptionsfraud.ca.

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Canadian securities regulators introduce innovative initiatives and increase collaboration to deter market misconduct
by FCNB on 

The Canadian Securities Administrators (CSA) today released its 2016 Enforcement Report. The ninth annual report highlights actions taken across Canada to deter and sanction wrongdoing in the capital markets.

 

“In 2016, CSA members continued with efforts to deter and sanction financial wrongdoing, with two jurisdictions implementing whistleblower programs, and a third partnering with law enforcement,” said Louis Morisset, Chair of the CSA and President and CEO of the Autorité des marchés financiers. “The CSA is also addressing emerging issues, for example by creating a task force with financial institutions and international regulatory counterparts to address the growing threat of binary options investing, and developing a new national market analytics software program to identify potential misconduct.”

 

The CSA’s 2016 Enforcement Report highlights the enforcement actions taken by CSA members against those who breach Canada’s securities laws.

 

Some highlights from the 2016 Enforcement Report:

  • 39 years of jail time ordered for those committing securities-related misconduct.
  • $299 million in compensation that respondents undertook to return to investors through no-contest settlements and $51 million in restitution and disgorgement orders
  • 120 people and 82 companies placed under interim and asset freeze orders, preventing further harm to investors.

 

The 2016 Enforcement Report can be viewed on the CSA’s website at www.securities-administrators.ca.

 

The publication of this report, in advance of Fraud Prevention Month (March), helps Canadians learn ways to easily identify and avoid investment fraud. Several fraud prevention tools and resources are available on the CSA’s website.

 

The CSA, the council of securities regulators of Canada’s provinces and territories, is committed to the joint mandate of punishing and preventing misconduct in Canada’s capital markets. CSA members work collaboratively to improve, coordinate and harmonize the regulation of Canada's capital markets.


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For more information

Andrew Nicholson
Financial and Consumer Services Commission
506 658-3021
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The Canadian Securities Administrators Launches a Regulatory Sandbox Initiative
by FCNB on 


The Canadian Securities Administrators (CSA or we) today launched a regulatory sandbox, an initiative that supports businesses seeking to offer innovative products, services and applications.

 

“The objective of this initiative is to facilitate the ability of those businesses to use innovative products, services and applications all across Canada, while ensuring appropriate investor protection,” said Louis Morisset, CSA Chair and President and CEO of the Autorité des marchés financiers. “We will consider applications, including for time-limited registrations, on a coordinated and flexible basis to provide a harmonized approach throughout Canada for business models, whether they are start-ups or incumbents. Our ability to regroup and coordinate our involvement and expertise in this busy environment is another example that demonstrates the agility and proactivity of the CSA,” concludes Louis Morisset.

 

The CSA regulatory sandbox is open to business models that are truly innovative from a Canadian market perspective. The CSA will assess the merits of each business model, on a case-by-case basis, and businesses that register or receive relief could be permitted to test their products and services throughout the Canadian market.

 

Examples of potential business models eligible to the CSA regulatory sandbox are:

  • online platforms, including crowdfunding portals, online lenders, angel investor networks or other technological innovations for securities trading and advising;
  • business models using artificial intelligence for trades or recommendations;
  • cryptocurrency or distributed ledger technology based ventures; andtechnology service providers to the securities industry, such as non-client facing risk and compliance support services (also known as regulatory technology or regtech).

 

To apply to the CSA regulatory sandbox, businesses should contact their local securities regulator, which will consider its eligibility and refer it to the CSA regulatory sandbox if it provides genuine technological innovation in the securities industry. As part of the application process, CSA Staff may request live environment testing, a business plan and demonstration of potential investor benefits (as well as how investor risks are minimized).

 

Local securities regulators can also provide early stage guidance on the application of current securities regulatory obligations, as well as information and support.

 

The CSA, the council of the securities regulators of Canada’s provinces and territories, co-ordinates and harmonizes regulation for the Canadian capital markets.

 

- 30 -


For more information

Andrew Nicholson
Financial and Consumer Services Commission
506 658-3021

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Canadian Securities Regulators to Lower Trading Fee Cap for Non-Inter-listed Securities
by FCNB on 

Canadian Securities Administrators (CSA) today published final amendments to National Instrument 23-101 Trading Rules, which lower the cap on active trading fees for securities that are listed on a Canadian exchange, but not listed on a U.S. exchange (non-inter-listed securities).

 

The amendments cap active trading fees for non-inter-listed securities at $0.0017 per security traded for an equity or per unit traded for an exchange-traded fund, if the execution price of the security or unit traded is greater than or equal to $1.00.

 

Active trading fees for securities that trade on both Canadian and U.S. exchanges (inter-listed securities) will continue to be capped at $0.0030 per share or unit traded at or above $1.00.

 

“These amendments are intended to address concerns raised regarding trading fee costs, specifically that the trading fee should reflect the value of the stocks traded, while also addressing liquidity needs in the Canadian marketplace,” said Louis Morisset, Canadian Securities Administrators Chair and President and CEO of the Autorité des marchés financiers.

 

The current cap of $0.0004 per share or unit price will remain in place for both inter-listed and non-inter-listed securities and units trading below $1.00.

 

If all ministerial approvals are obtained, the amendments will come into effect on April 10, 2017.

 

The notice can be found on CSA members’ websites.

 

The CSA, the council of the securities regulators of Canada’s provinces and territories, co-ordinates and harmonizes regulation for the Canadian capital markets.

- 30 -


For more information

Andrew Nicholson
Financial and Consumer Services Commission
506 658-3021
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Canadian Securities Regulators Publish Final Proxy Voting Protocols
by FCNB on 


The Canadian Securities Administrators (CSA) today published CSA Staff Notice 54-305 Meeting Vote Reconciliation Protocols, which outlines CSA staff expectations and guidance for improving the processes involved in the tabulation of proxy votes.

 

“These protocols lay the foundation for key entities to work collectively to improve meeting vote reconciliation,” said Louis Morisset, CSA Chair and President and CEO of the Autorité des marchés financiers. “This is a significant milestone in our work to increase the accuracy, accountability and reliability of the proxy voting infrastructure.”

 

The voluntary protocols outline CSA staff expectations related to generating and sending vote entitlement information; setting up vote entitlement accounts; sending proxy vote information and tabulating and recording proxy votes; and informing beneficial owners of any rejected or pro-rated votes.

 

Over the next two proxy seasons, the CSA will monitor the implementation of the protocols and assess the need for any enhanced regulatory measures. The CSA will also continue to encourage and monitor industry initiatives for paperless meeting vote reconciliation and end-to-end vote confirmation. CSA staff will receive ongoing input on these areas from a technical committee made up of representatives from key service providers involved in the proxy voting process.

 

The notice, including the protocols, can be found on CSA members’ websites.

 

The CSA, the council of the securities regulators of Canada’s provinces and territories, co-ordinates and harmonizes regulation for the Canadian capital markets.

-30-


For more information

Andrew Nicholson
Financial and Consumer Services Commission
506 658-3021

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Canadian Securities Regulators Adopt Rules for Over-the-Counter Derivatives Clearing
by FCNB on 

The Canadian Securities Administrators (CSA) today announced two new national instruments affecting over-the-counter (OTC) derivatives trading in Canada. The national instruments are part of Canada’s ongoing implementation of commitments to reform the global OTC derivatives markets.

 

“These national instruments are designed to align with international standards and provide safeguards in the Canadian market for counterparties transacting in over-the-counter derivatives, while fostering a flexible and competitive market for clearing service providers,” said Louis Morisset, Chair of the CSA and President and CEO of the Autorité des marchés financiers.

 

National Instrument 94-101 Mandatory Central Counterparty Clearing of Derivatives requires certain counterparties to clear certain standardized OTC derivatives through a central counterparty clearing agency, subject to exemptions set out in the instrument.

 

National Instrument 94-102 Derivatives: Customer Clearing and Protection of Customer Collateral and Positions is designed to protect a local customer’s positions and collateral when clearing OTC derivatives and to improve clearing agencies’ resilience to default by a clearing intermediary. The instrument includes requirements related to the segregation and portability of customer collateral and positions as well as detailed record-keeping, reporting and disclosure requirements.

 

In response to comments received during the most recent consultation periods, both national instruments provide certain exemptions for foreign entities that comply with similar laws of the United States or the European Union.

 

The CSA has collaborated with the Bank of Canada, the Office of the Superintendent of Financial Institutions, the Department of Finance Canada and market participants on the national instruments.  

 

Provided all necessary approvals are obtained, NI 94-101 comes into force on April 4, 2017 and NI 94-102 comes into force on July 3, 2017.

 

The notices relating to the national instruments can be found on CSA members’ websites.

 

The CSA, the council of the securities regulators of Canada’s provinces and territories, co-ordinates and harmonizes regulation for the Canadian capital markets.

- 30 -


For more information

Andrew Nicholson
Financial and Consumer Services Commission
506 658-3021

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