Canada announces single SRO and merges investor protection funds into one

Rick Steves

“The enhanced regulatory framework put in place by the CSA, including an amalgamated and independent protection fund, is an important step in the evolution of investor protection in Canada. CIPF will continue to communicate and engage with investors and member firms to become a valuable partner in investor protection.”

The Investment Industry Regulatory Organization of Canada (IIROC) and the Mutual Fund Dealers Association of Canada (MFDA) have officially amalgamated to become New Self-Regulatory Organization of Canada.

The MFDA Investor Protection Fund (MFDA IPC) and the former Canadian Investor Protection Fund (CIPF) have merged into a single investor protection fund and will be known as CIPF.

CIPF will provide protection to customers of New SRO members who suffer financial losses due to the insolvency of the New SRO member. CIPF remains focused on meeting its key responsibilities and working together with the CSA, New SRO and other stakeholders. CIPF will be led by an independent board of directors and its inaugural president and CEO, Toni Ferrari.

A single SRO and an integrated investor protection fund in Canada

The official launch of New Self-Regulatory Organization of Canada (New SRO) and new Canadian Investor Protection Fund (CIPF) mark the completion of the Canadian Securities Administrators’ (CSA) plan to create a new, single self-regulatory organization and an integrated investor protection fund.

The name “New Self-Regulatory Organization of Canada” is the temporary legal name of the newly consolidated SRO, which will take a new and permanent name in 2023 after appropriate stakeholder consultation and member approval.

Andrew Kriegler, CEO, New SRO, said: “We know that investors want flexibility in the way they consume financial services and financial advice. With the regulatory changes that will accompany New SRO, it will be easier for the industry to give them that flexibility and to improve their access to new products and services as well.

Toni Ferrari, CEO of CIPF, said: “The enhanced regulatory framework put in place by the CSA, including an amalgamated and independent protection fund, is an important step in the evolution of investor protection in Canada. CIPF will continue to communicate and engage with investors and member firms to become a valuable partner in investor protection.”

The single self-regulatory organization aims to:

  • Deliver value for investors, regardless of where they live, how many assets they have or their level of investing sophistication.
  • Foster an innovative and competitive industry to ensure there are investment opportunities and value propositions for existing and evolving Canadian investor needs.
  • Make it easier for dealers and their advisors to serve Canadians, regardless of region, firm size or business model.
  • Reduce duplicative regulatory burden and complexity, particularly for those running separate IIROC and MFDA platforms, as well as those in Québec.
  • Reduce barriers for current single-platform dealers looking to expand their business models.

Stan Magidson, CSA Chair and Chair and CEO of the Alberta Securities Commission, commented: “It has been an extraordinary team effort working with IIROC, the MFDA, CIPF and MFDA IPC. Our ability to come together to create one SRO and one investor protection fund demonstrates our collective commitment to better protecting investors and fostering healthy capital markets across Canada.”

The final materials, including the recognition orders by securities regulators and The Investment Dealer Rules and Partially Consolidated Rules, the Mutual Fund Dealer Rules and the Universal Market Integrity Rules and New SRO’s regulatory framework are now in effect, the new SRO stated, adding that Québec mutual fund dealers will temporarily not be subject to the rules of the New SRO, except for its operating rules, but will continue to be subject to the regulatory framework currently applicable in Québec.

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