New guidance sets out regulators’ expectations for firms that hire outside help to help beef up their compliance.
The Canadian Securities Administrators (CSA) issued a staff notice on Thursday that provides guidance to firms that are directly regulated by the provincial authorities (such as exempt market dealers and portfolio managers) and are required to hire a consultant to help them correct compliance deficiencies and improve their supervisory systems.
Generally, firms are required to hire a consultant as a result of regulatory action by the CSA in response to a compliance review or an enforcement investigation.
“In many cases, consultants engaged in these circumstances have been effective in helping firms to address their compliance deficiencies and to significantly improve their compliance systems, or systems of control and supervision,” the CSA says in its notice.
The guidance set out in the notice aims to help firms identify and engage appropriate consultants. It provides firms and consultants with the regulators’ expectations for these arrangements, providing transparency into the CSA’s process and criteria for approving a consultant.
It also aims to improve the oversight and remediation processes of firms required to hire compliance consultants.