CCO are exactly the same as the regulatory obligations of a full-time CCO. The
duties and responsibilities of a part-time
CCO are not attenuated if the CCO works
off-site or if the CCO works with a
number of EMDs.
Associate CCO
As part of obtaining the requisite
industry experience, the PCMA believes
the ASC and other CSA members should
permit the designation of an Associate
CCO similar to the concept of an
Associate Advising Representative. The
designation of an Associate CCO would
permit an individual to develop the
skills and experience of working under
the direction of an actual EMD CCO,
including a part-time CCO. This would
improve the talent pool and number of
available and qualified CCOs that could
act as a CCO for an EMD.
The small talent pool of available and
qualified CCOs is a barrier to entry
where an individual is approved based
on the view of a CSA member. The
process needs more transparency and if
an individual has experience while
acting as an Associate CCO for an EMD
and the requisite knowledge, including
taking a specialized CCO Exam for those
in the EMD space, then investor protec-
tion would be dramatically enhanced
while also reducing a current barrier to
entry. In addition, an Associate CCO
could be on-site in circumstances where
the EMD had a part-time CCO who was
not on-site on a full-time basis.
EMD Specific CCO Exam
The PCMA believes that the ASC should
encourage and participate in the
development of a CCO exam specific for
EMDs. There needs to be greater
engagement by the ASC and other CSA
members in curriculum design tailored
to the exempt markets. The CCO Course
offered by the Canadian Securities
Institute is an excellent course, however,
the role of a CCO in the exempt market
is quite unique and needs to be more
fully addressed.
The PCMA believes the preparation and
launch of such a course requires
funding that is currently unavailable in
the private capital markets. Accordingly,
we believe the ASC and other CSA
members should allocate the necessary
resources in the development of a CCO
Examination for the private capital
markets.
Registrant Portal
The PCMA believes the timing and
scheduling of any CSA member reviews
and sharing of comment letters and
responses should all be located on a
single Registrant Portal. This Registrant
Portal should allow registrants to upload
documents in a safe and secure manner
that they are required to provide CSA
members, including the ASC in connec-
tion with a review. PCMA members have
sometimes noted that certain CSA
members do not have a portal or change
portals which increasing the time,
money and effort to upload documents.
A Registrant Portal ensures that both
CSA members, including the ASC, and
an EMD have access to the same
information, including comment and
response letters, especially when there
is a change in staff at a CSA member or
EMD firm.
In addition, if information has previously been provided, then a CSA
member can limit their requests to any
updates. For example, if an EMD has
previously uploaded a KYC form
(individual, joint or entity KYC form), a
CSA member can simply inquire
whether the form has been updated and
if so, request an EMD to upload the
revised form. If not, no further action is
required. This will make such document
requests more efficient and effective for
all parties.
In conclusion, we thank the ASC for the
opportunity to provide our comments
and look forward to meeting with ASC
staff for in-person discussions.
For schedules visit: https://www.pcmacanada.com/page/Advocacy
1. http://www.checkfirst.ca
2. https://www.albertasecurities.com/-/media/ASC-Documents-part-1/Regulatory-Instruments/2018/10/5380701-v1-ASC-Notice-31-701-PDF.ashx
3. https://public.tableau.com/profile/albertasecuritiescommission#!/vizhome/ExemptMarketDashboard/EXDDashboard
4. https://www.sec.gov/rules/concept/2019/33-10649.pdf
5. The PCMA believes within the classification of an investment as “high risk” there are further gradations of low, medium and high risk that can distinguish high-risk products among themselves. For example, a high-risk investment
in a private REIT that has a few hundred million in income producing properties that has been paying distributions uninterrupted for seven years is less risky than a high-risk investment in a new start-up bio-tech or software
application company.
6. https://www.albertasecurities.com/-/media/ASC-Documents-part-1/Regulatory-Instruments/2019/03/5445797-ASC_Notice_Update_on_BO_31-505.ashx
7. Multilateral CSA Notice 32-302 Notice of Revocation for Certain Local Orders Providing Registration Exemption for Trades in Connection with Certain Prospectus-Exempt Distributions and Update on BC Instrument 32-517
Exemption from Dealer Registration Requirement for Trades in Securities of Mortgage Investment Entities
8. As stated in Multilateral CSA Notice 32-302 by those CSA members in the N WE Jurisdictions unregistered finders do not protect investors, where it states, among other things, the following, “ We are of the view that those purchasing
securities in the private placement market require enhanced investor protections, in particular, the protections that are afforded by dealing with a registrant. Today, when investors in the participating jurisdictions invest in the private
placement market from someone relying on the exemptions, they lose the benefit of receiving advice from a registrant, including the benefit of a registrant’s advice about whether the investment is suitable for them in their
circumstances. Further, these investors lose the protection offered by the due diligence a registrant must perform on the security to determine if it is suitable. With the removal of the local orders and BCI 32-517 (the exemptions), these
investors should also benefit from the additional protections of the registration regime.” [bold added for emphasis]
9. https://www.osc.gov. on.ca/documents/en/Securities-Category3/rule_20180621_31-103_client-focused-reforms.pdf
10. BCSC decision involving Chien-Hua Liu, also known as William Liu, Nu Wealth Financial Group Inc. and CPFS Professional Financial Services Inc. located at:
https://www.canlii.org/en/bc/bcsec/doc/2018/2018bcseccom372/2018bcseccom372.html
