Key information, activities and observations related to the oversight of former self-regulators and their investor protection funds in 2022 are now available in the most recent staff notice published by the Canadian Securities Administrators (CSA).
CSA Staff Notice 25-102, 2022 Annual Activities Report on the Oversight of Self-Regulatory Organizations (SROs) and Investor Protection Funds (IPFs) covers the last reporting period for the Investment Industry Regulatory Organization of Canada (IIROC) and the Mutual Fund Dealers Association of Canada (MFDA) before the two entities merged to form the New Self-Regulatory Organization of Canada (New SRO) on January 1, 2023. At the same time, the industry’s two former IPFs, the Canadian Investor Protection Fund and the MFDA Investor Protection Corporation, merged to form the new Canadian Investor Protection Fund (CIPF).
“The reporting period was the last year during which the two SROs and two IPFs operated as separate legal entities,” the report states. “The next activities report will provide details on staff’s oversight of New SRO and CIPF.”
During 2022, both IIROC and the MFDA sought approval to direct unallocated money from the IIROC Restricted Fund and the MFDA Discretionary Fund to defray New SRO integration costs paid to external advisors. “Each SRO was permitted to access up to $4.29-million from its restricted fund on the basis that the new SRO integration cost directly arose from the creation of the New SRO,” they write.
The report discusses integration processes and efforts at length, along with the work of various oversight committees, and provides statistics about the industry, as well.
In 2022 there were 173 IIROC-regulated firms, up from 172 in 2021. The firms employed 31,646 approved persons, up from 30,747 in 2021. All told, that part of the industry managed $3.4-trillion during the year, down from $3.8-trillion at the end of 2021, a decline of 10.5 per cent.
MFDA approved persons, meanwhile, totalled 77,341 at the end of 2022, which is in line with 2021 figures. The industry had 83 member firms, down from 86 in 2021, managing $635-billion, down from $729-billion in 2021, a 12.9 per cent decline. In both cases, the CSA says the decline in managed assets was mainly attributable to declining equity and bond markets during the same reporting period. “In addition, there was a shift in purchases away from mutual funds to guaranteed investment certificates (GICs), likely due to increased GIC returns.”