New SRO launches with IIROC-heavy executive team

It may not have a name just yet, but Canada’s new self-regulatory organization has officially taken flight.

The amalgamation of the Investment Industry Regulatory Organization of Canada (IIROC) and the Mutual Fund Dealers Association of Canada (MFDA) formally took effect as planned on Jan. 1, with the temporary legal name of “New Self-Regulatory Organization of Canada” and a new website.

The new SRO’s permanent name will be selected later this year after stakeholder consultation, and with the approval of its dealers and market members.

The new SRO is headed by Andrew Kriegler, former president and CEO of IIROC.

The MFDA’s previous CEO, Mark Gordon, stepped down last fall after Kriegler was chosen to head the new SRO. Gordon was replaced by veteran executive Karen McGuinness, whose title at the new agency is now senior vice-president, MFD member regulation, membership intake and innovation.

The rest of the new regulator’s executive team is largely comprised of former IIROC staffers, including Elsa Renzella, who oversees the enforcement and registration divisions; general counsel and corporate secretary Jennifer Armstrong; and chief financial officer Laura McNeil.

The new regulator’s transition management office, which is supervising the consolidation of the SROs, is co-chaired by Nigel Carpenter from the MFDA, who is now vice-president, information technology governance; and Victoria Pinnington from IIROC, who is also senior VP market regulation.

While the formal creation of the new SRO is now complete, dealers will largely continue to operate under their existing rules.

The new SRO is focused on ensuring work will continue “without disruption,” the regulator said in a release.

In Quebec, the new SRO’s rules won’t apply to mutual fund dealers, as they will continue to be overseen by the existing regulatory structure in that province.

Alongside the creation of the new SRO, the existing industry contingency funds — the MFDA IPC and the Canadian Investor Protection Fund (CIPF) — have also been consolidated into a single fund, the CIPF, which will continue to guard against investor losses from dealer insolvency.

The project to consolidate and streamline self-regulation was initiated by the Canadian Securities Administrators (CSA), which sought an overhaul of the SRO framework.

The new model is expected to particularly benefit dual-platform dealers, which can now streamline compliance under the new SRO. It increases investor representation in the self-regulatory process, with the creation of an investor office and an investor advisory panel at the new SRO.

“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,” said Stan Magidson, chair of the CSA and chair and CEO of the Alberta Securities Commission, in a release.

James Langton

James is a senior reporter for Advisor.ca and its sister publication, Investment Executive. He has been reporting on regulation, securities law, industry news and more since 1994.