Timeline announced for creation of new self-regulatory organization

The Canadian Securities Administrators (CSA), through the Autorité des marchés financiers (AMF), announced Nov. 18 that it has established a timeline for the creation of a new self-regulatory organization (SRO), consolidating the Mutual Fund Dealers Association of Canada (MFDA) and the Investment Industry Regulatory Organization of Canada (IIROC).

The new SRO being created is described in the CSA’s position paper 25-404, New Self-Regulatory Organization Framework, published August 3. The position paperdiscusses consolidation of IIROC and the MFDA’s functions and the combination of two existing investor protection funds – the Canadian Investor Protection Fund and the MFDA Investor Protection Corporation – into an integrated fund independent of the new SRO.

According to the announcement, under the present timetable the CSA expects the ministerial approvals and other transactions needed for amalgamation will be completed by the end of 2022. It is expected that the CEO and board of the new SRO will be announced in the second quarter of 2022.

To get there, the CSA says staff are leading the process on several fronts simultaneously, having assembled working groups to handle different aspects of the project: To address the specific regulatory landscape in Quebec, for instance, the AMF created a forum of senior representatives from the Chambre de la sécurité financière, IIROC's Montreal office and the Conseil des fonds d'investissement du Québec (CFIQ), the Quebec arm of the Investment Funds Institute of Canada (IFIC). The CSA has also established a special joint committee of representatives from IIROC, the MFDA and the CSA to recommend and recruit board members and a CEO.

They add that Deloitte will serve as the SRO integration manager and assist with designing its organizational structure. The integration of the investor protection funds, meanwhile, will continue on its own separate track. 

"As stated in our position paper, our main objective is to support the development of a regulatory framework that has a clear public interest mandate and fosters fair and efficient capital markets," said Louis Morisset, CSA chair and president and CEO of the AMF. "Thanks to the work being done by CSA staff with the valuable participation of IIROC, the MFDA and the two investor protection funds, we are on track to establish a new SRO.”