Timetable for new self-regulatory organization for investment industry announced

Corporate transactions required for amalgamation are expected to close by end of 2022

Timetable for new self-regulatory organization for investment industry announced

The work to establish the new self-regulatory organization (SRO) for the investment industry and investor protection fund (IPF) — both of which aim to improve investor protection and public confidence — has been progressing, the Canadian Securities Administrators (CSA) announced.

The new SRO will consolidate the functions of the Investment Industry Regulatory Organization of Canada (IIROC) and the Mutual Fund Dealers Association of Canada (MFDA), while the new IPF will combine two existing investor protection funds, namely the Canadian Investor Protection Fund and the MFDA Investor Protection Corporation, into an integrated fund that is independent of the new SRO.

“The establishment of a new SRO represents a historic opportunity for Canada to modernize its self-regulatory framework,” said Mark Gordon, the MFDA’s president and chief executive officer, in the CSA’s news release.

The current timeline projects that the corporate transactions required for amalgamation, including getting the necessary ministerial approvals, will be completed by the end of 2022.

“A new, enhanced, pan-Canadian SRO will increase access to advice while better protecting investors,” said Andrew Kriegler, the IIROC’s president and chief executive officer, in the news release.

“As stated in our Position Paper, our main objective is to support the development of a regulatory framework that has a clear public interest mandate and fosters fair and efficient capital markets,” said Louis Morisset, chairperson of the CSA and president and chief executive officer of the Autorité des marchés financiers (AMF).

Morisset expressed gratitude for the work and participation of staff from the CSA, the IIROC, the MFDA and the two investor protection funds. The CSA’s staff members, which are leading this initiative, have assembled working groups to focus on specific aspects of the project and have reviewed the comment letters regarding the framework.

The AMF arranged a forum with senior representatives of the Chambre de la sécurité financière, the IIROC’s Montreal Office and the Conseil des fonds d’investissement du Québec to discuss how to tackle the regulatory landscape prevailing in Quebec and how to facilitate the change.

Representatives from the IIROC, the MFDA and the CSA formed a special joint committee to recruit and recommend the new SRO’s chief executive officer and board members. The committee, for which AnneMarie Ryan serves as independent chairperson, includes Paul Allison, Patricia Callon, Luc Fortin, Linda Hohol, Jennifer Newman and Christopher Nicholls as members. The committee expects to announce the appointment results in the second quarter of 2022.

“There are many talented and experienced people working together to enable a smooth and timely transition to a new framework, with regulatory continuity for the market that will protect Canadian investors, accommodate innovation, and facilitate fair and efficient market operations as the investment industry evolves,” said Stan Magidson, chairperson and chief executive officer of the Alberta Securities Commission, in the news release.

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