The CSA released the annual report (Report) summarizing its key activities in 2022 with respect to its oversight of what was then known as the Investment Industry Regulatory Organization of Canada (IIROC) and the Mutual Fund Dealers Association of Canada (MFDA) and their respective investor protection funds. The Report covers the period prior to the consolidation of the two self-regulatory organizations into the New Self-Regulatory Organization of Canada (New SRO) at the start of 2023.
During the period, most of the CSA’s efforts related to dealing with the amalgamations of the former self-regulatory organizations, however staff also continued to oversee the SROs under the then-existing regulatory framework.
Of note, at the end of 2022 there were 173 IIROC member firms with 31,646 approved persons, and 83 MFDA member firms with 77,341 approved persons. Six IIROC rule amendments were approved, and five other rule amendments were still under review. A number of key subjects impacting member firms were discussed between staff of the CSA and IIROC, including IIROC’s market surveillance infrastructure, order execution only service levels, and advertising and social media guidance. The Report notes that IIROC is developing a proposal to update existing guidance on advertising and social media, particularly with respect to influencers, gamification and research reports based on non-traditional inputs such as social media sentiment indicators. It is also mentioned that new rules, guidance and compliance procedures relating to crypto assets are expected to be developed by staff of the CSA and the New SRO.
Key subjects discussed with CSA staff and the MFDA included cybersecurity, continuing education and expanded cost reporting.
Post-amalgamation, the CSA will continue its work on post-close transition activities, harmonization of the New SRO rulebooks and policy work related to directed commissions. Staff will also consider whether there can be improvements to the SRO complaint resolution process, enforcement and registration practices.
April 28, 2023