An Investment Industry Regulatory Organization of Canada (IIROC) white paper that proposes to allow member firms to employ mutual fund advisors represents an opportunity to discuss some long-standing concerns about Canada’s regulatory structure, said Mark Gordon, president and CEO of the Mutual Fund Dealers’ Association of Canada (MFDA), during a panel discussion at the Federation of Mutual Fund Dealers’ annual conference in Toronto on Tuesday.
IIROC’s white paper proposes eliminating the requirement that mutual fund advisors upgrade their qualifications to full-service status within 270 days — and this potential move would inevitably have a significant effect on the self-regulatory organization (SRO) landscape in Canada. (The white paper was released late last year and is out for comment until Friday.) In fact, the prospect of IIROC member firms employing mutual fund advisors is not new and has been an ongoing discussion within the MFDA’s membership and the investment industry at large for a decade, said Gordon.
But while IIROC’s white paper has garnered significant attention, Gordon pointed out that only one group would be able to push this type of initiative forward: “The [Canadian Securities Administrators’] jurisdictions are the architects and the stewards of the current securities regulatory structure in Canada. They are the decision makers, not the SROs.”
Nevertheless, the IIROC white paper represents an opportunity for all regulators to ask some very important questions, Gordon said: “It’s a healthy exercise for all regulators, including the SROs, to take a step back, go back to first principles, test our mandates and really look at what is the value that we bring today; what is our relevance; what is our value and relevance going forward tomorrow and in a newly evolved [regulatory] structure in Canada?”
However, a broader conversation on the mandates of regulators and SROs should wait as there are other priorities to consider, which include getting more clarity on the formation of the national securities regulator and the implementation of current policy initiatives, said Gordon.
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