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Regulatory framework consultation paper released

By The IJ Staff | June 26 2020 11:30AM

Photo: Rawpixel.com

The Canadian Securities Administrators (CSA) has released its long-awaited consultation paper on the framework for self-regulatory organizations (SRO) in Canada.

The CSA is requesting feedback on whether the current SRO framework best serves Canadian investors and the investment industry, in light of the evolution of the financial services industry. The CSA is also asking for comments on the issues and targeted outcomes outlined in the paper, with written submissions due by October 23, 2020.

CSA looking for broad feedback

The current SRO regulatory framework requires investment dealers to be members of the Investment Industry Regulatory Organization of Canada (IIROC) and mutual fund dealers, except in Québec, to be members of the Mutual Fund Dealers Association of Canada (MFDA).

“In publishing this consultation paper, the CSA is looking for broad input on the strengths, benefits and challenges of the current SRO framework, as well as feedback on the targeted regulatory outcomes set out in our paper,” said Louis Morisset, CSA chair, president and CEO of the Autorité des marchés financiers.

Industry has evolved

In December 2019, the CSA announced it would undertake a review of the SRO regulatory framework in response to the evolution of the industry and concerns raised by stakeholders. The CSA held informal consultations with the SROs, investor advocacy groups, investor protection funds, groups representing various registrant categories and investment industry associations. The feedback from these informal consultations informed the drafting of the consultation paper.

To encourage contributions from stakeholders and to accommodate the impacts of COVID-19, the CSA is holding a longer than normal comment period. Comments should be submitted in writing by October 23, 2020.

The MFDA and IIROC welcomed the publication of the consultation paper.

Looking forward to working with CSA

"With the CSA consultation process now officially under way we look forward to continuing to work with the CSA towards developing a modern SRO framework for Canada that will benefit all stakeholders,” said MFDA president and CEO Mark Gordon.

IIROC applauded the CSA for its leadership in undertaking the review.

IIROC president and CEO Andrew Kriegler said the COVID-19 pandemic has accelerated the ways in which Canadians want to consume financial services and have greater access to a broader range of products and services throughout their lifecycles. It has demanded that the industry respond quickly to customer needs and that regulators rethink the way they regulate.

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