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Mutual fund dealers and investment dealers have formally blessed the proposed merger of the Mutual Fund Dealers Association of Canada (MFDA) and the Investment Industry Regulatory Organization of Canada (IIROC), clearing the way for the first major reform to the self-regulatory system since IIROC was created in 2008.

The members of both self-regulatory organizations (SROs) voted on a proposed merger at special meetings today. The MFDA’s members voted at 11 a.m., and the IIROC members voted at 5 p.m. (both Eastern time). The proposal required two-thirds support from both memberships to pass.

The merger, which will create a new SRO that has yet to be named, is expected to close at the end of the year, with that SRO launching on Jan. 1, 2023.

The new SRO will be headed by Andrew Kriegler, who is currently the CEO of IIROC. His appointment was approved by the boards of both existing SROs, and by the Canadian Securities Administrators (CSA), this summer.

Earlier this month, longtime MFDA executive, Karen McGuinness, was appointed president and CEO of the MFDA after the SRO’s previous CEO, Mark Gordon, stepped down and became a strategic advisor.

“The decision by both organizations to amalgamate the SROs was done after careful consideration of the benefits and impacts to investors and the industry, and we are very pleased that our collective members agree,” said Steven Glover, chair of MFDA board, in a release.

The transaction still requires the approval of the CSA, which is seen as a formality given that the CSA initiated this latest effort to consolidate the SROs.

“The vote to create a new single enhanced SRO is a ringing endorsement of the work done by the CSA and is the right decision for investors and the investment industry,” said Paul Allison, chair of IIROC’s board.

“I am pleased that the members of IIROC and the MFDA voted to proceed with the amalgamation of the two SROs,” said Stan Magidson, chair of the CSA and chair and CEO of the Alberta Securities Commission.

“Their decision to move in this direction will provide Canada with a single enhanced SRO that will have a clear public interest mandate, will increase efficiencies, and will advance the fostering of fair and efficient capital markets,” Magidson added.

“The successful vote demonstrates the industry’s trust in the self-regulatory framework and in the ability of the new SRO to address existing regulatory fragmentation and provide more opportunities to firms to evolve their business model,” Kriegler said.