Earlier this week, the Canadian Securities Administrators (CSA) announced that Canada’s two pre-eminent investment industry self-regulatory organizations will be merged into a single regulatory organization (SRO). The new SRO, as described in CSA Position Paper 25-404 New Self-Regulatory Organization Framework, will combine the functions of the Investment Industry Regulatory Organization of Canada (IIROC) and the Mutual Fund Dealers Association of Canada (MFDA). The CSA will also combine two existing investor protection funds – the Canadian Investor Protection Fund and the MFDA Investor Protection Corporation – into an integrated fund independent of the new SRO.
IIROC is the product of the 2009 merger of the former Investment Dealers Association of Canada (IDA) and Regulation Services (RS). IIROC regulates investment dealers and enforces the Universal Market Integrity Rules (UMIR) that govern trading of securities in Canada’s capital markets. The MFDA is the self-regulatory organization that regulates mutual fund dealers. The mandates and regulatory regimes of IIROC and the MFDA have in recent years become so similar that a merger of the two has increasingly appeared all but inevitable.
It is expected that the creation of this new SRO will be an involved process. It has been announced that the CSA is creating an Integrated Working Committee that will determine the appropriate corporate structure of the new SRO and oversee incorporating a new governance structure and integrating the current functions of the existing SROs and separately, the two existing investor protection funds. So, it is not quite the time to say goodbye to IIROC and the MFDA, as they will be around for a little while longer!