Canadian securities regulators issue statement regarding amended Special Economic Measures (Russia) Regulations

MONTREAL, March 14, 2022 /CNW/ - The Canadian Securities Administrators (CSA) is alerting all market participants to economic sanctions imposed by the Government of Canada recently under amendments to the Special Economic Measures (Russia) Regulations. These Regulations were amended in light of Russia's violation of the sovereignty and territorial integrity of Ukraine.

The Regulations impose broad categories of sanctions on named Russian nationals and Russian entities. Market participants may be directly affected if they intersect with any of the "designated persons" (listed in Schedule 1, 2 or 3 of the Regulations) and their assets or property. While the sanctions apply beyond the scope of Canadian securities law, all market participants are potentially impacted, including issuers, marketplaces, clearing agencies, custodians, all categories of registrants, including crypto asset trading platforms, and pension, investment and mutual funds and their managers. Additionally, other entities such as banks and accounting firms that facilitate relevant transactions, or provide financial or audit services in relation to relevant transactions or designated persons, may be impacted.

All market participants are encouraged to do their due diligence and consider obtaining expert advice to understand, follow and continually monitor their obligations under the Regulations.

The Regulations impose wide-ranging restrictions in a number of areas. It is prohibited for any person in Canada and any Canadian outside Canada to:

• Deal in any property, wherever situated, held by or on behalf of a designated person whose name is listed in Schedule 1 of the Regulations.
• Enter into or facilitate, directly or indirectly, any transaction related to such a dealing.
• Provide any financial or other related services in respect of such a dealing.
• Make any goods, wherever situated, available to a designated person listed in Schedule 1.
• Provide any financial or related service to, or for the benefit of, a designated person listed in Schedule 1.

In addition, certain entities must determine on a continuing basis whether they are in possession or control of property owned or controlled by or on behalf of a designated person. There are also requirements to report any such situation, or any proposed transaction involving such property, to the Commissioner of the RCMP.

It is important to note that some restrictions will impact certain sectors, such as the financial sector (including in relation to new debt or equity financing, in respect of designated persons in Schedules 2 and 3) and energy sector (including an expansive list of goods and services related to oil exploration or production, as outlined in Schedule 4 of the Regulations). It is also important to note that causing, facilitating or assisting in prohibited activities is likewise prohibited. For further information on the Regulations, including any exceptions to the broad provisions, we strongly suggest that market participants review the amended Special Economic Measures (Russia) Regulations and keep apprised of any ongoing changes.

The CSA will continue to monitor the impact of the sanctions on Canadian capital markets, and coordinate with domestic and international regulators.   

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

SOURCE Canadian Securities Administrators

For media inquiries, please contact: Pascale Bijoux, Canadian Securities Administrators, [email protected]; For investor inquiries, please contact your local securities regulator.