Registration changes for Ontario investment dealers, mutual fund dealers and futures commission merchants
Effective April 1, 2025, the Ontario Securities Commission (OSC) will delegate certain registration functions to the Canadian Investment Regulatory Organization (CIRO). The changes will affect firms registered in Ontario in one or more of the following categories, and the individuals acting on their behalf (collectively, the Delegated Categories):
- Investment dealer
- Mutual fund dealer1
- Futures commission merchant
The OSC delegation order aims to streamline the registration process by eliminating duplicative workstreams, while ensuring ongoing OSC oversight through an enhanced risk-based framework. Similar delegations by the other Canadian securities administrators (CSA) are expected to follow.
What’s new as of April 1?
Delegation to CIRO – CIRO will now review and approve all initial registration applications and changes to registration information, and review permitted individuals, for the Delegated Categories. This is in addition to the registration functions that were already being carried out by CIRO, such as individual registrations and review of permitted individuals for investment dealers and futures commission merchants. The OSC will assist CIRO with certain matters (e.g., background checks) and continue to engage with applicants during an initial transition period.
Coordinated review to single review – Changes affecting a firm or an individual’s registration that were previously subject to OSC review and a separate process under CIRO rules, such as initial registration and review of certain transactions involving a registrant’s securities or assets, will now be subject to a single review process conducted by CIRO.
Significant or novel issues – CIRO must give the OSC advance notice of any firm registration matter where a “significant or novel issue” is present, including any issue that raises significant new regulatory questions, impacts rule interpretation or policy development, affects market participants or investor protection, or relates to new business models or innovations, among other things. CIRO cannot finalize its decisions on such matters until the OSC confirms it has no further questions or comments.
Registration in multiple categories – If a firm or individual is applying for registration in multiple categories including both a Delegated Category and a non-Delegated Category (portfolio manager, exempt market dealer, investment fund manager, commodity trading manager, etc.), that firm or individual will be subject to a coordinated review by both the OSC and CIRO, and will also have to file any changes to their registration information with both regulators.
How to file – An individual seeking registration or review as a permitted individual for a Delegated Category must still file the relevant form through the National Registration Database (NRD), and the application will be directed appropriately. A firm that is seeking registration in a Delegated Category, or seeking to update its registration information, must file the relevant form directly with CIRO.
Applying for relief – All applications by firms seeking relief from a requirement in securities legislation and its regulations will continue to be made to the OSC. However, individuals seeking relief from the proficiency requirements applicable to their Delegated Category of registration must apply to CIRO for an exemption.
What’s next?
The impact of these changes will be most significant for mutual fund dealers who will now have their dealing representative registrations approved by CIRO. The OSC’s delegation of registration functions to CIRO is intended to improve efficiency but may cause growing pains as registrants and regulators adjust to the changes. The details and timing of corresponding delegation by the other members of the CSA remains uncertain, which may add complexity while the jurisdictions align. In the long run we expect this to be a positive change.
CIRO and the OSC are expected to provide additional guidance, which should clarify how CIRO will exercise its new authority, how firms can complete various filings, and the process for the OSC’s review of “significant or novel issues”. As always, registered firms must adapt quickly to ensure ongoing compliance in the evolving registration landscape.
Please reach out to BLG or BLG Beyond AUM Law should you require assistance navigating this imminent transition.
By Borden Ladner Gervais LLP “BLG” >>
“As Canada’s law firm, BLG provides high-value advice and advocacy to address our clients’ business challenges and problems. We go beyond legal to anticipate, consult and advise in a rapidly changing digital world.
We have extensive experience acting in specialized and complex deals and disputes. Vigilant, curious and collaborative, we harness technology and innovation to offer our clients exceptional service and value.
With 800+ lawyers across Canada, we serve clients throughout North America, Europe, and Asia. Offering expertise in intellectual property, disputes and corporate transactional matters, our connectivity gives our clients the next-level service required to achieve success in complex and international matters.”
Please visit the firm link to site