Welcome to the late 20th century; Canada’s securities regulators have approved electronic disclosure amendments. Instead of issuing excessively lengthy e-mail or multiple pages of pdf documents (which clients may never read), firms can now provide them with hyperlinks (which they may never click).
The rules are in effect immediately, the Investment Industry Regulatory Organization of Canada (IIROC) said in a notice.
“The objective of the amendments is to create a regulatory framework that facilitates the practical and effective disclosure of required information through the use of technology and in a way that promotes the protection of the investing public,” the notice said.
The changes relate to “Rule 3400 Disclosures” – those indicating whether a firm’s investment arm holds a position in securities being covered in a research report.
Where an IIROC dealer member distributes a research report electronically, the report may direct readers to access the disclosures by electronic means from within the research report, such as through the provision of a hyperlink, regardless of the number of issuers covered in the report.
If a hyperlink is used in a research report covering six or more issuers that is paper-based, an additional method of direction must also be provided such as a toll-free number or a postal address. This will ensure that clients who do not have access to the internet will nevertheless be able to obtain the disclosures, IIROC said.