Financial Innovation Act: regulation and entry into force on July 1, 2022 | Bennett Jones LLP

[co-author: Jesse Fontaine – Articling Student]

On June 7, 2022, the Government of Alberta issued Order in Council 200/2022, pursuant to which the Lieutenant Governor in Council ordered that the Financial Innovation ActSA 2022 c F-13 (FIA) be proclaimed in force July 1, 2022. On the same day, the Government of Alberta also issued Executive Order 203/2022, establishing the Financial Innovation Regulation, Alta Reg 109/2022. The Regulations enter into force at the same time as the FIA. You can find more information about the FIA ​​in our previous publication: Bill 13: the law on financial innovation: an opportunity to play in the sandbox.

As previously reported, the FIA ​​will create a regulatory sandbox for financial services and fintech companies in Alberta, becoming a safe space for companies to test innovative products or services with reduced regulatory scrutiny and allowing companies to assess the potential value of new products and services for consumers. The FIA ​​will make Alberta the first jurisdiction in Canada to establish such a regulatory sandbox.

The rule

The Regulations are, at this time, very brief and clarify two key aspects of the FIA, namely the physical attendance requirement and the application fee required to apply to enter the sandbox.

In order to apply to enter the sandbox, the Regulations require entities to pay a $5,000 application fee and maintain a physical presence in Alberta either by operating an office physically located in Alberta or by employing a senior executive residing in Alberta. for the purposes of Alberta Personal Income Tax Act. Under the Regulations, a senior officer is the president, vice president, secretary, controller, treasurer or chief executive officer of the entity, or any other person who performs functions for the entity similar to those normally exercised by persons occupying the positions of president, vice-president, secretary, controller, treasurer or general manager.

The current Regulations do not yet address the other items which are contemplated as potentially subject to regulation under the FIA, including any additional criteria for the issue of a sandbox acceptance certificate. , any additional legislation from which an exemption may be granted or FIA provisions from which an applicant may not be exempted. Bennett Jones will continue to monitor any expansions or additions to the FIA ​​regulations as they come into effect and begin to be applied in the province.

Next steps

  • Financial services and fintech firms should consider applying for a regulatory sandbox exemption for any innovative, new, and original product or service once applications open on July 4, 2022. Prior to this date, firms should ensure that they know the requirements of the application, including Alberta’s physical presence requirement.
  • Since the reporting requirements under the FIA ​​mirror the requirements of Alberta law Business Corporations ActAlberta corporations should review the adequacy of their corporate records before applying for a regulatory sandbox exemption.
  • Persons considering exemptions should seek legal advice to understand how these exemptions may affect their business and how other statutory provisions remain applicable to their business.

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