Gaining insights into data portability in capital markets

By Khalil Jessa

Canadian investors desire secure and convenient access to innovative financial products and services that can help to better manage their finances and improve their overall financial well-being. To support this growing demand, both the financial services sector and regulators must foster consumer focused innovation that facilitates both accessibility and investor protection. 

One key area of focus is data portability, particularly in the transfer of Know-Your-Client (KYC) information. Canadian investment service firms are required to collect KYC data to comply with securities regulations. However, once collected, the data cannot easily and securely be shared with another firm — even at the client’s request — because data portability laws to facilitate and promote data security do not yet exist across most of Canada. The only exception is Quebec, which introduced data portability legislation in 2024.

In theory, electronic KYC (e-KYC) data sharing could streamline onboarding processes by allowing firms to collect and verify client information digitally while giving investors greater control over their financial data. This capability would enable investors to more seamlessly switch providers or open new accounts, aligning with broader trends in consumer driven banking or open banking, which is expected to arrive in Canada in the near future. 

Industry interest in digital identity and data portability is growing. In 2024, the BC Securities Commission (BCSC) and Alberta Securities Commission (ASC) conducted a survey of local registrants revealing that close to half planned to expand use of Digital ID in the next three years. This strong response suggests that the investment services sector recognizes the immediate need to address data portability.

Similarly, another 2024 survey conducted by a research company found that 45 percent of respondents were supportive of authorizing their financial institutions to transfer their data to third parties to secure better financial products.  So, on the consumer side, the desire is there for greater control and sovereignty over their financial data.

Fast forward to 2025, and the BCSC, along with several other Canadian securities regulators, have launched a new initiative known as CSA Collaboratory: a dedicated digital space where regulators and fintech innovators can work together to support Canada’s growing capital markets. 

Designed to be flexible and adaptive, the CSA Collaboratory enables localized testing environments where multiple regulatory themes can be explored concurrently. Insights from each test will help us continue to modernize Canadian securities regulations to keep pace with emerging financial technologies. 

The first initiative within the CSA Collaboratory focuses on data portability and e-KYC. Canadian securities regulators want to ensure we have a 360-degree look at these solutions, because we want to reduce onboarding burden for firms and support greater data portability without compromising investor protection.

As part of this effort, the BCSC invites industry stakeholders from British Columbia to provide comment on the Spring 2025 Theme – Data Portability and e-KYC. Stakeholders are encouraged to review the discussion paper and submit their comments by May 19, 2025.

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