For the eighth year in a row, compliance officers (COs) and company executives throughout the investment industry shared their thoughts about the regulators that oversee their businesses for Investment Executive’s (IE) annual Regulators’ Report Card.
This year, IE research journalist Ahmad Hathout spoke with 109 COs and company executives from firms regulated by the self-regulatory organizations (SROs) and the provincial regulators. Survey participants were asked to rate their respective regulators in 17 categories compared with 20 in 2015.
Specifically, “the regulator’s willingness to apply discretion when enforcing policy decisions,” and “the regulator’s effectiveness in keeping up its policies with evolving international regulatory developments” were removed from the survey because they were considered to be redundant.
Meanwhile, “the fairness of the regulator’s hearing process” category was removed from the survey because there were not enough responses to warrant a calculable rating.
COs and company executives at investment and mutual fund dealers were asked to survey their respective SROs as well as their overseeing provincial regulators – but only if the survey participants had direct dealings with their provincial regulators within the past two years.
In contrast, survey participants in similar positions with exempt-market dealers, investment-counselling firms and asset-management firms rated only the provincial regulators that oversee their businesses.
As in the past few years, ratings for the provincial regulators have been broken out individually in the main table on page 15. And for the first time, Quebec’s provincial regulator, the Autorité des marchés financiers joins the Alberta Securities Commission, the B.C. Securities Commission and the Ontario Securities Commission in the ratings.
The remaining provincial regulators remain absent because they’re not able to generate sample sizes large enough to calculate comparable ratings.
To produce the ratings in the main table, survey participants were asked to rate their respective regulator(s) in each category on a scale of zero to 10, with zero meaning “poor” and 10 meaning “excellent.” A green number on the table indicates that the rating for that category increased by half a point or more vs 2015; a red number means the rating decreased by the same margin year-over-year.
In addition to the ratings, survey participants were asked for their point of view concerning regulatory developments and issues in two supplementary questions: did survey participants support a merger between the SROs; and, should regulators separate the cost of advice from the cost of investment products, given the results of a recent research report on the impact of mutual fund fee structures on mutual fund sales.
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