Canadian Securities Regulators issue new reports on investment regulatory oversight

The reports aim to enhance transparency and efficiency
Canadian Securities Regulators issue new reports on investment regulatory oversight

The Canadian Securities Administrators (CSA) released two new reports aimed at enhancing the transparency and efficacy of the Canadian Investment Regulatory Organization (CIRO) and the Canadian Investor Protection Fund (CIPF).

The CSA, representing the securities regulators from Canada’s provinces and territories, coordinates and harmonizes the regulatory landscape across the Canadian capital markets. These reports, namely the CIRO Oversight Review Report and the 2023 Annual Activities Report on the Oversight of CIRO and CIPF, focus on the regulatory oversight of Canada's financial markets.

CIRO is the national self-regulatory organization (SRO) that oversees all mutual fund dealers, investment dealers and trading activity on equity and debt marketplaces in Canada. The Oversight Review Report scrutinizes CIRO’s adherence to its recognition orders' stipulations. It assesses CIRO’s regulatory processes' effectiveness, efficiency, and fairness. The review, focusing on corporate governance, trading review and analysis, and the financial compliance of investment and mutual fund dealers, discovered two medium-priority issues within CIRO’s processes that were not covered by existing policies and procedures.

The first finding relates to incomplete written procedures in the FinOps department to notify all relevant recognizing regulators of early warning letters or capital deficiency letters sent to dealer members. The second finding relates to inadequate written policies and procedures in CIRO’s financial compliance department to designate dealer member firms into early warning when issues at the dealer member are identified during compliance examinations. CIRO has since addressed and resolved these findings.

Meanwhile, the 2023 Annual Activities Report (CSA Staff Notice 25-311) provides a comprehensive overview of the CSA’s supervisory activities concerning CIRO and CIPF throughout the year. This period was notably the first year following the amalgamation that led to the formation of CIRO and CIPF.

The activities report serves as a communication channel with stakeholders, detailing the CSA’s efforts in ensuring that CIRO and CIPF adhere to securities regulation requirements and reinforcing public trust in Canada’s regulatory framework.