Canadian securities regulators propose adopting BC's Over-the-Counter rule


Vancouver - Members of the Canadian Securities Administrators (CSA) today published for comment proposed Multilateral Instrument 51-105 Issuers Quoted in the U.S. Over-the-Counter Markets. The proposed over-the-counter (OTC) rule builds on BC Instrument 51-509 Issuers Quoted in the U.S. Over-the-Counter Markets and addresses the harm caused to the reputation of capital markets in Canada by market participants with strong connections to Canadian jurisdictions who engage in abusive activities through the over-the-counter markets in the United States.

The proposed OTC Rule:

  • requires disclosure by issuers with a significant connection to a Canadian jurisdiction whose securities are quoted in North America only in the U.S. over-the-counter markets
  • discourages the manufacture and sale in a Canadian jurisdiction of U.S. over-the-counter quoted shell companies that can be used for abusive purposes

"Protecting the integrity of Canada's capital markets is of critical importance to securities regulators across the country," said Bill Rice, Chair of the CSA and Chair and CEO of the Alberta Securities Commission. "The OTC rule proposed today will strengthen disclosure requirements for OTC issuers with a significant connection to Canadian markets, and will provide Canadian regulators with additional compliance and enforcement tools to monitor these markets."

In addition, the CSA is also proposing consequential changes to National Policy 11-203 Process for Exemptive Relief Applications in Multiple Jurisdictions and CSA Staff Notice 12-307 Applications for a Decision that an Issuer is not a Reporting Issuer.

The CSA is seeking comment from investors and industry on the proposed OTC rule. To comment, please refer to the CSA Notice and Request for Comment document on the proposed OTC rule, which is available on the websites of the following CSA members:

The members of the CSA that are participating in this publication include all jurisdictions with the exception of Ontario. The comment period is open until September 9, 2011.

The CSA, the council of the securities regulators of Canada's provinces and territories, coordinates and harmonizes regulation for the Canadian capital markets.

- 30 -

For more information:

CSA member name

Point of contact

Phone number

Autorité des marchés financiers

Sylvain Théberge


Alberta Securities Commission

Mark Dickey


British Columbia Securities Commission

Ken Gracey


Financial Services Regulation Div. Newfoundland and Labrador

Doug Connolly


Manitoba Securities Commission

Ainsley Cunningham


New Brunswick Securities Commission

Wendy Connors-Beckett


Northwest Territories Securities Office

Donn MacDougall


Nova Scotia Securities Commission

Natalie MacLellan


Nunavut Securities Office

Louis Arki


Ontario Securities Commission

Carolyn Shaw-Rimmington


PEI Securities Office, Office of the Attorney General

Janice Callbeck


Saskatchewan Financial Services Commission

Jennifer Anderson


Yukon Securities Registry

Graham Lang