Discipline in the securities industry will trigger a review of insurance industry approval in Ontario under a deal between the Investment Industry Regulatory Organization of Canada (IIROC) and the Financial Services Commission of Ontario (FSCO).
IIROC and FSCO announced on Wednesday the signing of a memorandum of understanding (MOU) that not only facilitates information sharing between the regulators, but will also see disciplinary decisions by one regulator trigger a review of a disciplined rep’s activities by the other regulator. These reciprocal reviews will include examining the rep’s suitability for licensing or registration, and may lead to further disciplinary action, they note.
The arrangement aims to bolster investor protection, and addresses the long-standing fragmentation between the oversight of the securities and insurance sectors.
Under the MOU, IIROC and FSCO may also conduct joint investigations, and share information in cases where both regulators are investigating a particular rep’s conduct.
“Ontario investors will benefit from the protections provided by our increased collaboration,” says Andrew Kriegler, president and CEO of IIROC, in a statement. “Investors must be protected from disciplined individuals who might seek to avoid sanctions and continue working in another part of the financial services industry.”
IIROC notes that the deal with FSCO follows a similar agreement with the Chambre de la sécurité financière that was signed back in November 2015. IIROC also has information-sharing arrangements with more than a dozen other Canadian and international regulators. It is also pursuing more of these sorts of agreements “to improve the consistency and effectiveness of the regulatory system.”
Last year, a government review panel’s preliminary report recommended merging FSCO and the Deposit Insurance Corporation of Ontario (DICO) into a single regulatory agency, with an independent tribunal. The committee’s final report is due to be released in the spring.
See: A larger, stronger insurance regulator
“The lines that once clearly delineated the various financial services industries are being blurred as the sector evolves and more individuals become active in multiple areas,” adds Brian Mills, interim CEO and superintendent of Financial Services in Ontario. “Greater cooperation and coordination between regulators is becoming an increasingly important part of our work to protect consumers.”