The fifth edition of Investment Executive‘s (IE’s) 2013 Regulator’s Report Card saw researcher Jeff Wimbush speak with 101 compliance officers (COs) and executives at financial services firms to find out what they think about the self-regulatory organizations and the provincial securities commissions that oversee their businesses.

However, for the first time since this Report Card was first published in 2009, IE expanded the list of survey respondents in order to get a more proper perspective of the provincial regulators. This took place following consultation and suggestions from both the main self-regulatory organizations in the survey and certain compliance professionals.

Respondents now include COs and executives with firms that are regulated directly by the provincial regulators, including exempt-market dealers, investment-counselling firms and investment fund companies. In addition, only those mutual fund and investment dealers that have had a direct dealing with the provincial regulators within the past two years were asked to rate them.

A look at the OSC, BCSC

As a result of this change, as well as to provide greater analysis of individual regulatory bodies, provincial regulators will no longer be averaged together for a single score. This year’s ratings have been broken out for two provincial regulators: the Ontario Securities Commission (OSC) and the B.C. Securities Commission (BCSC). Due to the small sample size, this year’s Report Card does not include the other provincial regulators; it’s IE‘s intention to include them in the survey over the coming years.

In addition, the survey questionnaire was reviewed after the meetings with regulators and compliance professionals and three new questions were added: “how useful is the regulator’s response to questions and concerns expressed by registrants”; “the guidance and assistance that the regulator provides”; and “the regulator’s effectiveness in balancing evolving international regulatory developments with the regulator needs of the Canadian marketplace.”

Questions rephrased

Similarly, some long-standing questions were reworded for clarity. For example, the question previously worded as “the firmness of the regulator’s policy decisions” was changed to “the regulator’s willingness to apply discretion when enforcing its policies.” (See story above.)

To obtain the ratings for each of these questions, the COs and company executives who were surveyed were asked to rate their regulators’ performance in each category on a scale of zero to 10, with zero meaning “poor” and 10 meaning “excellent.”

There’s one other notable change in this year’s Report Card worth highlighting, and it relates to these ratings. In order to be consistent with IE‘s advisor-based Report Cards, the main ratings table for the Regulators’ Report Card has been revamped. It now displays this year’s scores for each of the two main self-regulatory organizations as well as for the OSC and the BCSC.

Also, rather than including last year’s rating and the difference between the two years, this year’s table lists only this year’s rating. A rating increase of 0.5 of a point or more is indicated by a green number, and a ratings decrease of half a point or more is indicated by a red number.

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