doctor with phonendoscope

With the prospect of reforming the self-regulatory structure in the air, the Investment Industry Regulatory Organization of Canada (IIROC) received a clean bill of health from the Canadian Securities Administrators (CSA) in their latest oversight review.

The review, which covered Sept. 2018 to Sept. 2019 and specifically focused on two aspects of the SRO’s enforcement function — IIROC’s new integrated case management (ICM) system and its approach to determining when to hold a disciplinary hearing behind closed doors — didn’t uncover any issues.

“No findings were identified during the review,” the report said, adding that the CSA “did not identify concerns” with IIROC meeting the terms of its recognition orders.

The report noted that the CSA asked IIROC to review user access to the ICM system, and to update its policies and enhance its training for hearing panel members on closed hearings.

The results of the latest oversight review come as the CSA is consulting on possible self-regulatory organization (SRO) reform.

Among an array of other issues, that consultation addresses the adequacy of CSA oversight, citing concerns that the “current regulatory structure does not result in the SROs being sufficiently accountable to the CSA.”

In particular, the consultation paper noted that some believe “the CSA SRO oversight reviews leave a perception that the reviews focus mainly on technical issues.”

Separately, an Ontario task force has also called for enhanced SRO oversight.

Among other things, June’s Soliman Report proposes to revisit the SROs’ recognition orders “to enhance their governance and oversight” and to give the Ontario Securities Commission more tools to enhance its SRO oversight.