rules and regulations

The future of self-regulation will be given a direction this summer, the Canadian Securities Administrators (CSA) said on Monday.

In June 2020 the CSA launched a consultation on reforming the framework for self-regulatory organizations (SROs), attracting a slew of input — including competing visions from the SROs themselves.

The CSA said Monday that it’s “on track” to release “specific recommendations this summer” in a position paper that will “shape the future of this regulatory framework.”

The Investment Industry Regulatory Organization of Canada (IIROC) has long advocated for a merger with the other dealer SRO, the Mutual Fund Dealers Association of Canada (MFDA). Last year IIROC released a paper that called for a merger while leaving broader SRO reform for consideration further down the road.

The MFDA proposed its own vision for restructuring the framework, which would feature a new SRO to oversee all registered firms while market regulation would be hived off to the provincial regulators.

Earlier this year, an Ontario task force included its own recommendations for SRO reform in a sweeping series of proposals for overhauling both the content and structure of securities regulation.

The CSA received 67 submissions to its initial consultation, which closed in October, and has been reviewing the comments.

The regulators reported that they’ve also met with specific commenters “to clarify issues raised and information provided,” and “requested and received additional data from IIROC, the MFDA and the Canadian Investor Protection Fund.”

“The CSA continues to consider other data and analysis, including but not limited to dozens of academic publications pertaining to SRO design, operations and best practices, and their applicability to the Canadian capital markets,” it said.

The proposal for SRO reform from the CSA would go out for public comment again in the summer — giving the industry, the SROs, investors and others another chance to help shape the future of self-regulation.

“The CSA is keenly aware that the culmination of its work on the regulatory framework will have significant and long-lasting impacts on investors, market participants and the Canadian capital markets,” said Louis Morisset, chair of the CSA and president and CEO of the Autorité des marchés financiers (AMF), in a statement.

“We are weighing and validating the issues, and considering various options for an enhanced framework that protects the public interest while ensuring fair and efficient capital markets,” he added.