The Alberta Securities Commission (ASC) has issued a notice of a recently completed compliance review of exempt market dealers (EMDs) in the province. One firm (confirmed by an ASC spokesperson as Madison Peak Securities Ltd. on Friday, May 12) had its registration terminated because of “significant deficiencies and related investor protection concerns.” Another firm, CMS Financial Management Services Ltd., was suspended when it didn’t meet the requirement to find a replacement manager for the investment fund it managed.
Read: How I became an EMD
The ASC reviewed 66 Alberta-based EMDs, which involved examining material aspects of the client relationship for compliance with regulatory requirements, at both the firm and individual registrant levels. Areas reviewed included compliance systems, KYC, KYP, suitability, sales practices and marketing, conflicts of interest, relationship disclosure information and client reporting.
While a number of firms achieved a high level of compliance or were at least generally compliant, the ASC identified deficiencies in compliance with regulatory obligations in all areas tested.
After each firm compliance review, a report was issued outlining areas for improvement. Outcomes ranged from companies voluntarily improving compliance systems to registration termination.
“We strongly encourage registrants to use the notice as a self-assessment tool to enhance their compliance with regulatory obligations,” says Lynn Tsutsumi, director of market regulation at the ASC, in a release.
The notice provides guidance on the areas reviewed, as well as the outcomes for firms deemed non-compliant.
Read the full notice from the ASC.