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National Registration Database (NRD)

An online registration system for individuals and companies involved in trading, advising, or underwriting of financial securities

What is the National Registration Database (NRD)?

The National Registration Database (NRD) is a web-based registration system for individuals and companies whose businesses include trading, advising, or underwriting of financial securities. The NRD allows such businesses to register online by filling forms electronically and is only accessible to authorized personnel.

 

National Registration Database

 

History of the National Registration Database

The National Registration Database was launched in 2003 by the Canadian Securities Administrators (CSA) in an attempt to make the registration process more efficient for individuals and companies that operate in the financial securities market. The establishment of the NRD was also in alignment with two of the CSA’s most important goals:

1. To reduce the regulatory burden for capital market participants

2. To harmonize securities regulations across jurisdictions

 

Before the establishment of the NRD, registration took place on paper – a time-consuming and bureaucratic process. The registration approval process could take four to six weeks and required a separate application to be filed for each province or territory in Canada, leading to lost revenue for the market participants. The NRD’s simplified the process by offering a common application for all provinces and reducing the registration approval time to a matter of days.

 

Why is the National Registration Database Important?

Generally, any individual or organization that deals with the trading, advising, or underwriting of securities is required to register their business for regulatory purposes in provinces/territories where they operate. Since the NRD’s establishment in 2002, registration is now mandatory in all regions in Canada except Quebec.

By offering a common application for multiple jurisdictions and reducing the time required for registration, the NRD has increased efficiency in the registration system and has provided several economic benefits to small, medium, and large-sized firms, which will be discussed below. The registration system is designed to protect investors and the public from fraudulent firms and individuals by ensuring that only qualified organizations are approved as registrants.

 

NRD Benefits

 

1. Economic benefits worth $85 million

According to a study conducted using a sample of 131 Canadian firms from the financial securities industry, each NRD feature was valued in dollars. The sum of benefits provided by each NRD feature to the Canadian financial services industry over five years was projected to be $85 million, which outweighed the development and operating costs of the NRD by almost double. The benefits provided by each feature will be explored in more detail under the valuable features section.

 

2. Cost savings

According to the survey, firms in the financial securities industry expect the use of the NRD to reduce cash expenses related to the registration process, e.g. transportation costs, labor costs, as well as the opportunity cost of labor that could be used elsewhere. For investors, the NRD helps reduce informational costs by providing a database of all the qualified and registered financial firms, increasing security.

 

3. Efficiency gains

Through online registration, use of electronic funds transfer (EFT) payments, and lower transportation requirements, the NRD’s increased efficiency for companies by freeing up the time that would’ve been spent in the registration process. The NRD also allows applicants to print registration applications and approvals for business and legal requirements, which reduces the time spent in bureaucratic processes.

 

4. Other valuable features

The NRD includes features such as 24/7 live phone support and e-mail help desk
support, both of which add value by allowing registrants and/or investors to address any queries about the application process and also provide regulatory support if and when required.

Similarly, the NRD only provides access to a designated Authorized Firm Representative (AFR) to fill out application forms, which reduces the errors and inefficiencies resulting from delegation in larger firms.

 

Related Readings

CFI is the official provider of the Certified Banking & Credit Analyst (CBCA)™ certification program, designed to transform anyone into a world-class financial analyst.

To keep learning and developing your knowledge of financial analysis, we highly recommend the additional resources below:

  • Economies of Scale
  • Securities and Exchange Commission (SEC)
  • US EDGAR
  • Types of SEC Filings

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