IDA members approve division

Members of the IDA have approved a plan to split the association apart, creating a separate entity to act as an industry representative while the IDA will maintain its role as a self-regulatory organization. Nearly 90% of the members endorsed the division.

“We are very pleased that the members have endorsed change that preserves the advantages of self-regulation, creates an effective industry advocate and responds to the requirements of today’s demanding environment,” said IDA Chair Ross Sherwood.

The IDA board of directors will convene a special meeting to arrange funding of the trade group as well as setting an implementation date. The IDA name itself appears set to disappear, as the board will also consider new names for both organizations.

Current IDA president and CEO, Joe Oliver, will head up the new SRO, while the advocacy group will be led by Ian Russell, who is currently IDA senior vice-president, industry relations and representation.

“The SRO will continue to pursue the mandate it shares with the securities commissions — investor protection and the efficiency and competitiveness of the Canadian capital markets,” Oliver said. “We will continue to draw on a key advantage of self-regulation — the expertise of the many industry volunteers who serve on our regional district councils and numerous industry committees.”

Oliver says the IDA hopes to have the split completed by April 1, 2006. He estimates the transfer of staff could save the SRO as much as $3.5 million annually.

The IDA has long defended its dual role, which critics saw as a conflict of interest, saying the association could not discipline members while claiming to be their advocates as well. The structure essentially set the IDA up as judge, jury and defence lawyer.

The new trade association will be national in scope with regional offices across the country. Membership will be voluntary.

“The new trade association will advance the industry’s commercial and business interests, as well as its independent positions on regulatory matters, with governments, regulators and the public,” said Tim Price, chair of the IDA regional dealers committee and member of the trade association steering group. “Today’s decision will result in vigorous and independent industry advocacy unfettered by the public interest mandate of the SRO.”

Earlier this fall, the IDA floated the idea of merging with the MFDA. So far the MFDA has rebuffed the suggestion, but Oliver sees today’s move as the first step toward such a merger.

“Today’s decision removes an impediment to consolidation with Canada’s other SROs, a highly desirable initiative in the public interest,” Oliver said.

Filed by Steven Lamb, Advisor.ca, steven.lamb@advisor.rogers.com