The Canadian Securities Administrators (CSA) has announced plans to merge the existing two parallel (and somewhat duplicative) regulatory frameworks of the Investment Industry Regulatory Organization of Canada (IIROC) and the Mutual Fund Dealers Association of Canada (MFDA) into one new “enhanced” and yet-to-be-named self-regulatory organization (SRO). This rehaul, set out in detail in the CSA’s Position Paper on the New Self Regulatory Organization Framework is intended to “…protect Canadian investors and enhance public confidence, accommodate innovation, ensure fair and efficient market operations and navigate continually evolving industry conditions”. Further to this objective, a majority of the new SRO’s Board of Directors will be independent of the industry, a significant change from the current governance structures of IIROC and MFDA. In addition, the Canadian Investor Protection Fund and the MFDA Investor Protection Corporation will be combined into a single new investor protection fund (IPF), independent of the new SRO.
These changes will be implemented in two phases:
Phase 1 will focus on the design of the new SRO and the new IPF and the integration of the existing SROs and IPFs under the new framework; this will take place under the auspices of a newly established Integrated Working Committee (IWC). As part of the Phase I implementation, the IWC will consider written submissions received by October 4, 2021.
Phase 2 will consider whether it is appropriate to incorporate into the new SRO other registration categories, including Portfolio Managers, Exempt Market Dealers, and Scholarship Plan Dealers; possible modifications to the new IPF (e.g., extending coverage to other registration categories) will also be considered in this phase. This phase will include formal consultations with extensive stakeholder engagement, through the formation of a distinct CSA SRO Working Group.
If you would like more information, or to discuss how to participate in the consultations, please contact Barry Campbell barry@campbellstrategies.com, or Gayle Nathansongnathanson@campbellstrategies.com .
