The Investment Industry Association of Canada (IIAC) is weighing in on proposed draft regulation, the Regulation Respecting Complaint Processing and Dispute Resolution in the Financial Sector proposed by the Autorité des marchés financiers (AMF), calling the draft regulation contradictory and harmful to both investors and financial markets.
“The draft regulation remains unnecessary for Canadian Securities Association (CSA) and New SRO (the New Self-Regulatory Organization of Canada) members,” they write. “The draft regulation continues to provide both significant contradiction and unnecessary duplication to the detriment of those conducting business both inside and outside the province of Quebec and their clients.”
They continue, saying the contradictions do not serve the public interest and give rise to investor and market harm.
The definition of what constitutes a complaint is excessively broad, they state, adding that regulatory resources should focus on matters of serious misconduct, not minor matters. They ask that the definition be aligned with existing CSA and New SRO Rules.
Similarly, they say proposed investigation periods are also contradictory and imprudent. They say a sensible and attentive investigation requires at least 90 days, as reflected in CSA and New SRO rules. “A 90-day or more investigation period recognises the importance of issues to the investor by allowing for appropriate investigation,” they write. (The draft regulation calls for a 60-day investigation period.)
“For New SRO members and CSA members, reporting of complaints in accordance with New SRO (rules) and National Instrument 31-103 definitions and timelines should continue,” they write. The submission also states that matters which are the subject of a civil suit or arbitration should be exempted from required continued exchanges with the complainant to maintain the integrity of the regulatory and judicial systems.
The submission concludes by calling the proposed transition periods both premature and inadequate.
