The Canadian Securities Administrators (CSA), the umbrella organization of Canada’s provincial and territorial securities regulators, published a report summarizing the progress made on business plan objectives first published in 2019. The three-year plan included 41 objectives, the majority of which the CSA says were completed within the timeframes allotted.
Client focused reforms and the ban on deferred sales charges, redemption fees and trailing commissions for order-execution-only dealers were highlighted as achievements, alongside regulatory framework developments allowing registrants to place temporary holds on transactions in suspicious circumstances affecting vulnerable clients, and other efforts to streamline regulation.
The regulators also discuss crypto asset trading platforms, the implications of activist short selling in Canada, and work to enhance the supervision of over-the-counter derivatives markets. The group has also started testing the CSA market disruption coordination plan. They add that notable key initiatives not included in the business plan, include work on creating the new self-regulatory organization consolidating the functions of the Investment Industry Regulatory Organization of Canada (IIROC) and the Mutual Fund Dealers Association of Canada (MFDA), work on climate-related disclosure requirements and efforts to create more disclosure about women on boards.
Among the initiatives that are still in progress, the CSA says it is working on strengthening Ombudsman for Banking Services and Investments (OBSI) powers. “There have been a number of instances where firms have refused to compensate complainants when OBSI has recommended compensation or have paid less than the full amount recommended,” the CSA states. “The lack of binding authority may act as a deterrent for clients to escalate their complaints. The CSA has renewed its focus on strengthening the OBSI.” They add that regulators are currently reviewing OBSI’s decision-making processes, legal issues related to a framework that would give OBSI binding authority and international best practices.
Other work that is ongoing includes cooperation with federal agencies like the Royal Canadian Mounted Police (RCMP). The CSA will review issuer regulatory regimes related to promotional activities in the venture market, it is monitoring capital raising issues related to block-chain based securities, is currently considering continuous disclosure comments, and is currently building a successor to the current System for Electronic Document Analysis and Retrieval (SEDAR). Data management and data strategy at the CSA were also identified as ongoing concerns.
“While the CSA has completed most of the deliverables enumerated in the 2019-2022 Business Plan, some of the priorities were long term and the CSA will continue delivering on them in the coming years,” they write.
