FREQUENTLY ASKED QUESTIONS
1. Are “market actors” under the Securities Industry Act, 1995 (“SIA 1995”) equivalent to the term “market actors” under the Securities Act, 2012?
 

No. Market Actors are defined in the interpretations section of the SA, 2012 to mean

(a)  a registrant;

(b)  a person exempted under this Act from the requirement to be registered;

(c)   a director, senior officer, or promoter of a reporting issuer;

(d)  a custodian of assets, shares or units of a collective investment scheme;

(e)  a self-regulatory organization;

(f)   a designated rating  organization;

(g)  a transfer agent for securities of a reporting issuer;

(h)  a registrar for securities of a reporting issuer;

(i)   the partner of a market actor;

(j)   a contingency  fund  required  under Part III of this Act;

(k)  a settlement assurance fund required under Part III of this Act;

(l)   a securities market;

(m)clearing agency; or

(n)  any other person or member of a class of persons prescribed to be a market actor;

 

 

Market Actors under the SIA, 1995 were defined as

(a) Brokers

(b) Dealers

(c) Investment Advisers

(d) Securities Companies; and

(e) Traders

 

“Market actors” under the SIA 1995 are termed “registrants” under the SA, 2012.  Under the SA 2012 however, the term “registrant” also includes “reporting issuer”.

2.      What categories of registration would market actors under the SIA 1995 now hold under the SA, 2012?
Section 53 of the SA, 2012 lists the transitional provisions for market actors under the SIA, 1995 into the SA, 2012.  Additionally, in accordance with section 53(2) of the SA, 2012 persons can continue performing functions that they were authorized to perform under the SIA, 1995 until they bring themselves into compliance with the SA, 2012 or up until December 31, 2013.

3.      Does the new Act make any distinction between GOTT Brokerage and Brokerage in other securities?
The SA, 2012 does not make a distinction between GOTT Brokerage and Brokerage in other securities.  All Brokers (inclusive of GOTT Bond Brokers) registered under the SIA, 1995 are deemed, under section 53(1)(a) and 53(1)(f) to be duly registered either as a Broker-Dealer or a Registered Representative of a Broker-Dealer.

 

4.      If my company wishes to expand its capabilities to perform full service brokerage, how can this be done under the SA, 2012?
 

Under the SIA 1995 registered Securities Companies are now deemed to be registered as Broker-Dealers. Section 53(2) of the Securities Act, 2012 (“SA, 2012”) states that:

“A person who is deemed to be registered under subsection (1) shall comply with the registration requirements of section 51(1) or (2) as the case may be, within twelve months from the date of the coming into force of this Act and shall, until the earlier of the expiry of such twelve-month period and the date such person obtains registration under section 51(1) or (2) as the case may be, be permitted to continue performing the functions that such person was authorized to perform under the former Act.” (Emphasis added)

In other words, although the SA, 2012 does not make any distinction between Brokerage and Brokerage in GOTT Bonds, companies are permitted to continue performing the functions they were authorized to perform under the Former Act (that is the SIA 1995).  Accordingly, if your company is desirous of expanding its Brokerage capabilities beyond GOTT Bonds, it can apply for registration as a Broker-Dealer under section 51(1) on or before December 31, 2013.  Please note however, that the fees, forms and other conditions for registration of Broker-Dealers have not yet been prescribed via By-Laws.   Additionally, these By-Laws would be released for Public Comment in early March 2013 and we hope that they will be enacted by the third quarter of 2013.

5.      When will the forms and fees for the new Act be developed?
The Forms, Fees and other requirements for registration under the Securities Act, 2012 will be identified in General By-Laws that are to be developed to facilitate the implementation of the Securities Act, 2012.

6.      When will the General By-Laws to accompany the SA, 2012 become Law?
The General By-Laws should be released for Public Comment in early March 2013 and we hope that they will be enacted by the third quarter of 2013.

7.      When will the financial statement filing obligations for reporting issuers under the SA, 2012 become due?
 

Reporting Issuers are required to file the following documents with the Commission:

 

Document	Section of SA, 2012	Timeframe for submission
Revised Registration Statement	61(2)	Within 14 days of the end of its financial year and pay the prescribed fee*
Annual Report	63	To be prescribed
Comparative Financial Statements	65	See By-Law 56 of the Securities Industry By-Laws, 1997
Interim Financial Statements	66	Within 60 days of the end of the interim period to which they relate

 

*Since the Securities Industry By-Laws, 1997 are still in force, the fee for the filing of the Revised Registration Statement is $5,100 (inclusive of the $100 Registration Statement Filing fee).

8.      Are revised registration statements required to be accompanied by audited financial statements?
No. Revised registration statements are due within 14 days of the financial year end of a Reporting Issuer and should contain information as at the most recently completed financial year end.

9.      What are the financial reporting obligations of Broker-Dealers, Investment Advisers, Underwriters?
The financial statement filing obligations for these persons are not contained in the SA, 2012 but are to be identified in the General By-laws to be issued under the SA, 2012.  The General By-Laws have not been issued, however your attention is drawn to Section 170(2) of the Act which states that:

“By-laws, guidelines and rules made under the Securities Industry Act, in force at the commencement of this Act, remain in force until replaced by the new By-laws made pursuant to this Act.”

Accordingly, the financial statements filing obligations for Broker-Dealers, Investment Advisers, and Underwriters are contained in By-Law 28 of the Securities Industry By-laws 1997.  By-Law 28 states that a registrant shall file annually with the Commission audited annual financial statements that are certified by a director of the registrant within ninety days of the end of each financial year.

 

10.  How can applications for registration be made prior to the passage of the General By-Laws to accompany the SA, 2012?
Your attention is drawn to Section 170(2) of the Act which states that:

“By-laws, guidelines and rules made under the Securities Industry Act, in force at the commencement of this Act, remain in force until replaced by the new By-laws made pursuant to this Act.”

Accordingly, the registration forms prescribed under the Securities Industry By-Laws, 1997 and the associated fees prescribed under the Securities Industry (Amendment) By-Laws, 2006 remain in force.

 

Applications for registration as a “Reporting Issuer” are to be made using the Form No. 4 of the Securities Industry By-Laws, 1997 and the Form shall be accompanied by the usual supporting documents.

 

Applications for registration as a “Self-Regulatory Organization” are to be made using the Form No. 1 of the Securities Industry By-Laws, 1997 and the Form shall be accompanied by the usual supporting documents.

 

Applications for registration as Investment Advisers and Underwriters are to be made using the Form No. 2 of the Securities Industry By-Laws, 1997 and the Form shall be accompanied by the usual supporting documents.

 

Applications for registration of Broker-Dealers are to be made using the Form No. 3 of the Securities Industry By-Laws, 1997. The Forms shall be accompanied by the supporting documents that were required for registration under the SIA 1995.    Form No. 2 is also to be used to identify the classes of business that your company wishes to conduct (Brokerage, Dealing, Investment Advising, Underwriting) and to identify the registered representatives.   Please ensure that the registered representatives identified comply with sections 51(2)-(4) of the SA, 2012.

 

Please note that the all applications may be subject to additional conditions as the Commission may require to ensure compliance with the Securities Act, 2012.  As such, the Staff may request further information from the applicant before an application is approved.

11.  What fees are applicable to Registered Representatives?
No fee currently exists for the registration of registered representatives. The said fee will be prescribed in the General By-Laws to be developed to facilitate the full implementation of the SA, 2012.

 

 
12.  What is to be set out in a Post Distribution Statement?
Section 84 of the SA 2012 requires that issuers file a Post Distribution Statement within 10 days of the completion of a distribution.  Along with other forms referenced in the SA, 2012, the post-distribution statement will be prescribed in the General By-Laws to be developed to facilitate the implementation of the SA, 2012.

 
13.  Where a distribution is being made either under the Limited Offering exemption or the Accredited Investor prospectus filing exemption is the investor(s) required to file a statement or register with the Commission?
Investors are not required to make any filings or register with the Commission pursuant to their participation in a distribution which was a limited offering or which benefited from the accredited investor exemption. The issuer however, will be required to provide the Commission with a list of the investors pursuant to the completion of the distribution and filing of the post-distribution statement.