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CSA – Financial Innovation Hub Introduces Collaboratory and Data Portability
Letter Summary:
The CSA is examining the implications of data portability in Canadian capital markets and is consulting industry stakeholders through a new cohort-based and forward-looking Testing Environment: the CSA Collaboratory. The first test within the CSA Collaboratory will seek to provide the CSA with a greater understanding of the impacts of data portability solutions and in particular the collection, analysis and transfer of client data, which is sometimes referred to as e-KYC solutions.
Overview of the Council’s Comments:
On May 16, 2025, the Canadian Advocacy Council of CFA Societies Canada (CAC) submitted a comment letter to participating members of the Canadian Securities Administrators (CSA) in response to CSA Multilateral Discussion Paper 11-406 – CSA Financial Innovation Hub Introduces Collaboratory and Data Portability Test. The consultation sought input on potential regulatory and industry developments related to electronic know-your-client (e-KYC) systems and data portability frameworks.
In its submission, the CAC provided recommendations and considerations regarding the implementation of these innovations in the Canadian capital markets. The CAC acknowledged the potential benefits of modernization but emphasized the importance of regulatory clarity, standardization, and investor protection.
Key Highlights from the CAC’s Submission:
- The CAC recognized barriers within current securities legislation, particularly the inability of registrants to delegate KYC responsibilities, and recommended revised or additional guidance to support reliance on e-KYC solutions while safeguarding against improper use.
- The CAC supported the development of a centralized, standardized e-KYC system that would promote consistency and reduce reliance on fragmented or proprietary solutions.
- The CAC stressed that without a harmonized, national approach, data portability initiatives could be limited by inconsistent regulatory frameworks across jurisdictions.
- The CAC emphasized that an industry-wide standard for data portability would enhance transparency, efficiency, and competition, while also supporting innovation and investor control over personal information.
- The CAC encouraged the CSA to consider open-source collaboration models, such as those supported by the Fintech Open Source Foundation (FINOS), to build and maintain shared KYC platforms.
- The CAC highlighted the opportunity for the CSA to define a clear vision and minimum standards for KYC, which could improve regulatory certainty for registrants and benefit investors.