SRO merger on track for 2022

The planned merger of the Investment Industry Regulatory Organization of Canada (IIROC) and the Mutual Fund Dealers Association of Canada (MFDA) is on track to be completed by the end of the year, regulators reiterated today.

In a bulletin, the Canadian Securities Administrators (CSA) said that work on merging the self-regulatory organizations (SROs) is underway, and that proposed rules for the new SRO will be published for comment next month.

The CEO and board of the new SRO will also be announced in the second quarter, the CSA said.

In the meantime, “the CSA and SROs are working closely to develop rule proposals for an interim rule book, with plans to publish the proposals for comment in May,” the CSA said.

Among other things, the proposed interim rules will address the existing obligation for firms to maintain separate investment dealer and mutual fund dealer subsidiaries, and the need for procedural workarounds to allow fund dealers to deal ETFs.

Those interim rules will take effect once the new SRO is up and running.

Also once the new organization is operational, the regulators aim to develop a harmonized rule book.

“Our work will be informed by a comprehensive policy plan for regulation based on the principle that like activities will be regulated in a like manner,” the CSA said in its notice. “The intention is to create consistent rules that present a risk- and principles-based approach to rules, compliance and enforcement.”

The notice also outlined the regulators’ planned approach to regulating fund dealers in Quebec.

Those firms “will become members of the new SRO once it is established, but will operate within a regulatory status quo during the transition period for their activities in Quebec,” it said.

During the transition period, dealers in Quebec will be subject to existing provincial requirements and will continue to be members of the Chambre de la sécurité financière, which will remain operational after the transition period.

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.