The Canadian Foundation for Advancement of Investor Rights was launched in 2008 on the strength of a $3.75-million commitment from the Investment Industry Regulatory Organi-zation of Canada’s predecessors, the Investment Dealers Association of Canada and Market Regulation Services Inc. That startup funding was paid out of fines collected by the SROs.

Now, FAIR Canada — a vocal champion of investor rights — estimates that it has enough money to get through to the end of the year. But it’s under pressure to come up with the funds to sustain itself beyond that point.

IIROC has not yet indicated whether it plans to provide FAIR Canada with further funding. But IIROC and the Ontario Securities Commission are the regulators with the fattest wallets, thanks to their enforcement efforts.

The fines that regulators collect can’t be used to fund their own operations; they must be used for things such as investor education or other matters that benefit the public.

The OSC’s latest financials show that it has $43.6 million set aside from fines and settlements, earmarked for “the benefit of third parties.” Similarly, IIROC has $23.5 million in its restricted fund, mostly from fines and penalties it has collected; this can be spent only on certain things, including underwriting the costs of its disciplinary hearings, one-time capital expenditures, and investor education or research.

By comparison, the other major regulators have very little available in such funds. According to the latest financial reports, the B.C. Securities Commission has $2.85 million in its education reserve fund and the Alberta Securities Commission has a zero balance in its restricted cash account. The Mutual Fund Dealers Association of Canada has $541,590 in its restricted fund.

IIROC also is sitting on another $32.5 million from the settlements it had reached with several firms to resolve allegations related to the collapse of the asset-backed commercial paper market in 2007. But the money collected by IIROC and the OSC as part of the ABCP settlements is likely to be returned to investors who were harmed, and not be available for general investor education or for funding groups such as FAIR Canada.

FAIR Canada will be hoping regulators not only improve their collection performance but that they see fit to spend some of their sanction money on an investor advocate that has become a bit of a thorn in their sides in recent years.