We agree that there are investor protection considerations that would support extending the prohibitions or restrictions contained in a failure-to-file order to other passport jurisdictions regardless of whether or not the issuer is a reporting issuer. Such actions would help avoid regulatory arbitrage. The fact that an order has application in each Canadian jurisdiction would have to be clearly indicated in the order, disseminated and prominently referenced on the CSA’s website, and potentially elsewhere, including by
press release and/or on the issuer’s website or SEDAR profile. Such publication would help ensure that the public is aware of the order and any restrictions, particularly if the issuer is not a reporting issuer in every jurisdiction.
Overview of the Council’s Comments:
As a general comment, we support the efforts of the CSA to harmonize securities legislation across the country when possible. If applications to cease to be a reporting issuer were included in the passport system, it would streamline the process for reporting
issuers wishing to surrender their status throughout Canada. However, ideally, the process would also be available to the extent an issuer wished to revoke its status in more than one (but not all) such jurisdictions.