On June 25, the Canadian Securities Administrators (CSA) published Consultation Paper (CP) 25-402 on its review of the regulatory framework for the Investment Industry Regulatory Organization of Canada (IIROC) and the Mutual Fund Dealers Association of Canada (MFDA).
CP 25-402 is seeking feedback from investors, industry and the public on the following issues:
Duplicative operating costs for dual Platform dealers including concerns related to separate compliance functions costs, information technology systems costs and non- regulatory costs and multiple fees
Product-based regulation including concerns related to differences in rules and interpretation for similar products and services
Converging registration categories including concerns related to investor confusion regarding different registration categories
Regulatory inefficiencies regarding product access by registrants, relating to regulatory costs among others
Structural inflexibility as the current regulatory framework limits SROs in various ways, including not permitting them to adapt easily their business models to respond to investor preferences.
Investor confusion including in relation to regulatory overlap and complaint resolution
Public confidence in the regulatory framework, regarding the lack of formal SRO mechanisms to facilitate investor consultation and the lack of transparency and the robustness of the SRO regulatory compliance and enforcement practices to quote a few.
The separation of market surveillance from statutory regulators (CSA)
The SROs review initiative was first announced in December 2019 by the CSA in response to the evolution of the industry and concerned raised by stakeholders about the current regulatory framework, and was followed by informal consultations with a wide range of stakeholders.
The CSA will take into consideration comments received in its upcoming proposal on the SRO regulatory framework.
Interested parties are invited to provide their comments by October 23, 2020.
CP 25 – 402 can be found here: