New SRO gets formal approval from CSA

The investment industry’s new self-regulatory organization has received its formal blessing from the Canadian Securities Administrators (CSA).

The provincial regulators published formal recognition orders for the yet-to-be-named SRO, which will combine the Investment Industry Regulatory Organization of Canada (IIROC) and the Mutual Fund Dealers Association of Canada (MFDA). They also approved combining the two industry contingency funds — the Canadian Investor Protection Fund (CIPF) and the MFDA IPC — into a new unified CIPF.

The recognition orders take effect Jan. 1, 2023.

Provincial regulators also issued the new SRO’s interim rules, which combine the IIROC and MFDA rulebooks, provide interim fee guidance and set out terms of reference for the new SRO’s investor advisory panel.

In response to comments on the draft orders, the regulators clarified certain terms and addressed issues such as confidentiality protections, oversight, information sharing, and principles relating to complaint handling and dispute resolution.

Stan Magidson, CSA chair and chair and CEO of the Alberta Securities Commission, said in statement that regulators remain “committed to creating a new SRO with a strong public interest mandate that best protects investors.”

“I am very pleased with the contributions and level of support shown by industry stakeholders and investor advocates alike,” Magidson said. “The regulatory framework for the new SRO and CIPF incorporates feedback we received and will enhance investor protection and public confidence through stronger accountability. It also allows for further innovation in our evolving industry.”

Some of the details regarding the transition of Quebec-based fund dealers and reps to the new SRO will be covered in a forthcoming publication from the Autorité des marchés financiers (AMF) that will be issued prior to the closing of the amalgamation.

James Langton

James is a senior reporter for Advisor.ca and its sister publication, Investment Executive. He has been reporting on regulation, securities law, industry news and more since 1994.