On September 29, members of the Mutual Fund Dealers Association of Canada (MFDA) and the Investment Industry Regulatory Organization of Canada (IIROC) passed a special resolution approving the amalgamation of the two self-regulatory organizations (SROs).
Effective January 1, 2023, the MFDA and IIROC will become one organization that will temporarily be known as the New Self-Regulatory Organization of Canada (New SRO). Read our piece here.
This merger follows a decision by the Canadian Securities Administrators (CSA), first announced on August 3, 2021 (read our previous piece here).
To create a level regulatory playing field for investment firms across Canada, the New SRO will:
Eliminate duplicative costs and minimize regulatory inefficiencies
Promote access to advice for all investors
Reduce investor confusion
Enhance structural flexibility (to address industry stakeholders concerns about the current dual SRO structure)
Acknowledge proportionate regulation (rules will be more scalable or proportionate to the different types and sizes of member firms and their respective business models)
Establish a graduated proficiency model
Streamline the complaint process
Increase controls and improve transparency of enforcement mechanisms (through the creation of a CSA Market Information Coordinating Working Group that will review differences in jurisdictional enforcement processes and engage with the New SRO regarding the supervision of market related data and sharing like information)
Enhance market surveillance
The CSA will also consolidate the Canadian Investor Protection Fund and the MFDA Investor Protection Corporation into an integrated fund (New IPF), independent of the New SRO.