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When regulatory risk is high, firms and advisors expect regulators to help them understand the rules. This isn’t easy, conceded the compliance officers (COs) and professionals surveyed for the Regulators’ Report Card.

Regulators were generally recognized for their communication efforts, thanks to tools like newsletters, bulletins, conferences and annual reports. In particular, the commissions of Alberta, Quebec and Ontario saw a rise in this sentiment, alongside the Mutual Fund Dealers’ Association of Canada (MFDA).

A CO from an Ontario-based investment dealer says the MFDA’s approach is “adequate and working well. [It has] annual conferences with forward-looking vision.” One downside, says a Quebec-based CO at a major bank, is there can be “a lot of duplication, and it’s getting worse and worse.”

The fund-focused organization, which received a 7.6 for “ability to communicate its priorities,” has reached out to its members through multiple research projects during the past three years, and is initiating continuing education (CE) requirements.

MFDA representatives said the next step for the CE program is consultation on accreditation standards, which will require “a lot of collaboration” with 80,000-plus advisor members. One main benefit will be a CE offering and system that the SRO says “will increase our communication with advisors.”

Compliance executives who deal with the Ontario Securities Commission (OSC) offered an improved rating of 7.6 in the same category. One Ontario-based CO from an investment broker says the regulator is “very structured in [its] priorities,” while another says the OSC is “very forthcoming with their agenda [and] broadcasts things in advance.”

The OSC’s latest priorities report covered initiatives as diverse as the economy, fintech growth, regulatory reform and clients’ best interests.

Yet, respondents wondered whether regulators will be able to handle the increasing volume of reporting, updates and consultations required as the industry shifts. For commissions like the OSC and the B.C. Securities Commission (BCSC), the latter of which received a solid 8.0 for its communication, COs and executives said reliance on the Canadian Securities Administrators makes it more difficult for provincial regulators to publish pertinent information quickly.

Self-regulatory organizations (SROs) also struggled. One Ontario-based CO from an investment dealer says the Investment Industry Regulatory Organization of Canada (IIROC), which received a slightly improved 8.0 in the category, is “not as effective as it could be,” adding that they feel “buried in documents that aren’t read.” Other COs, however, praised the usefulness of the SRO’s committee meetings and its pre- and post-implementation outreach.

In a statement emailed to Investment Executive (IE), IIROC highlighted conferences and seminars that had taken place in three cities and hosted more than 1,100 advisors over the last 12 months. As for IIROC’s 2019 priorities, one goal is to be “a leading-edge securities regulator” that offers better policy development and fintech support. (See Watchdogs respond to rise of fintech.)

Yet one sore spot for COs who deal with IIROC was the perceived lack of “guidance and assistance that the regulator provides” alongside its rule-making. Giving an average rating of 6.3 in the category, down from 7.0 last year, many said the quality has dropped. Webcasts tend to have “redundant” content, they noted. One Manitoba-based CO from an independent investment dealer says guidance would be useful “when new regulations happen. […] They don’t give guidance that’s particular to your situation.”

The MFDA, too, was criticized. Despite an improved rating of 6.7 in that category, a Saskatchewan-based private banking firm CO says guidance and training is “non-existent” and that events are often located in Toronto. “In the early days, they had a position that they were here to help. Now, it’s mostly just communicating rules,” the CO says, adding that getting answers to tough questions is easier for larger firms with more resources. However, the MFDA’s ratings rose this year by more than half a point for “timeliness of the regulator’s response” and “usefulness of the regulator’s response.”

The MFDA confirmed that it has a department for member education, which currently offers tips on evolving challenges like cybersecurity and senior client risks. The association said it typically offers the most assistance to smaller firms based on resource scarcity. (See Big concerns for small firms.)

The perceived value of regulators’ fees varied. Survey participants recognized fees as a cost of doing business, as well as the “skeleton staff” at some regulators, but also said fees were onerous for both large and small firms.

The BCSC, which once again had the highest rating in the “fees for registrants” category (7.2) despite hiking its fees in 2018, was said to have better value. One CO from an exempt-market dealer in Alberta says the B.C. regulator’s costs are “lower than most other provinces.” IIROC raised its fees by 1% last year to reflect that “our regulatory responsibilities are not static,” according to its emailed statement. The SRO had a slightly lower year-over-year rating of 5.9.

The MFDA, which had the lowest but a still improved rating year-over-year for fees, says that members’ costs have remained the same for years and that its fee structure is “scaled to the amount of business conducted by a member,” according to a statement emailed to IE.