The two organizations have agreed to tighten communications in managing crises related to CDIC member institutions
A new memorandum of understanding signed by the Canada Deposit Insurance Corporation (CDIC) and the Investment Industry Regulatory Organization of Canada (IIROC) will allow better protection of investors and depositors, according to a news release from IIROC.
Under the MOU, both organizations agree to better consult, cooperate, and exchange information with one another in cases where a CDIC member institution or connected investment firm undergoes significant financial difficulties that require crisis management and resolution.
“Investors across Canada will benefit from the early warning, co-operation and co-ordinated efforts of two organizations working together to plan and oversee the orderly resolution of a financial emergency at an investment firm,” said IIROC President and CEO Andrew J. Kriegler. “This enhanced co-operation will not only help protect investors' assets and deposits but will also promote confidence and financial stability in Canada.”
The CDIC has entered into similar arrangements with other financial regulators and major deposit insurers, including the UK’s Prudential Regulation Authority, the Deposit Insurance Corporation of Japan, and the Federal Deposit Insurance Corporation in the US.
“In order to protect the deposits of Canadians in a rapidly evolving financial sector, we need to have a full picture of the business of our member institutions,” said Michèle Bourque, president and CEO of CDIC. “In the unlikely event of a failure, this agreement will ensure that we are able to act quickly and effectively to co-ordinate the orderly resolution of a financial firm.”
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