In an interconnected world, our capital markets face shared challenges and exciting opportunities. At the Securities and Investment Management Association’s (SIMA) recent annual leadership conference in Toronto, I had the privilege of moderating a lively fireside chat with my counterparts Ken Bentsen of the Securities Industry and Financial Markets Association in the U.S. and Urban Funered of the Swedish Securities Market Association.
Together, we took a deep dive into four themes shaping our industry today: product development in private markets, lessons from Sweden, evolving regulation and advice models and cybersecurity best practices.
Private markets
Retail investor access to private market products, ranging from private equity to infrastructure and other alternative funds, is expanding fast. That’s especially true in the U.S.
In Canada, regulatory bodies like the Ontario Securities Commission are exploring innovative funds to open doors for more investors to access long-term investments focused on Canadian assets. In the U.S., private sector market growth is unmistakable, with more companies staying private for longer.
This is further fuelled by retirement-account considerations and efforts under the current administration to provide new pathways for retail investors, while emphasizing robust investor protection regarding valuation, transparency and liquidity.
Sweden’s success
Sweden is a small country with outsized capital market achievements. With one of Europe’s largest capital markets and a strong pension-fund base, Sweden is a shining example of how investor education and culture, entrepreneurial spirit and public-private collaboration can drive long-term sustainable growth.
The Nordic region’s innovative long-term investment funds have overcome legislative hurdles to gain traction with an innovative model worth paying attention to. The country’s Investment Savings Account (ISK) allows tax-free investments for approximately the first $40,000 with an annual flat tax applied beyond that, simplifying administration.
This, combined with banks offering commission-free trading to young investors, has contributed to 40% of Swedes holding ISK accounts. These are valuable lessons for Canada as we aim to invigorate and evolve our investment landscape.
Advice and regulation
Across Canada, the U.S. and Europe, advice models are evolving with a careful eye on investor protection. While regulatory frameworks differ — from the dual-regulated broker-dealer and registered investment advisor system in the U.S. to Europe’s diverse licensing and advisory practices — the commitment to ensuring that investors are well informed remains central.
The upsurge of digital and independent advice channels is reshaping how investors engage with markets, requiring both innovation and vigilance from regulators and the industry. Both of my guests agreed that fostering an investment culture requires regulatory innovation in combination with investor education, particularly in response to the rise of finfluencers.
Cybersecurity and market resilience
Cybersecurity is a relentless focus. Both in North America and Europe, industry collaboration with regulators incorporates tabletop exercises and preparedness training to ward against evolving cyber threats.
In Sweden, this even includes war-game scenarios in which there are attacks on the country’s financial infrastructure due to ongoing geopolitical tensions.
It’s always invigorating to engage with global colleagues. Despite some differing approaches among our countries, a common thread throughout the dialogue was that collaboration across borders and sectors is essential. Open conversations present an opportunity for Canada to learn, adapt and lead.
Andy Mitchell is president and CEO of the Securities and Investment Management Association