Following the Investment Industry Regulatory Organization of Canada’s (IIROC) release of its annual enforcement report, the Canadian Securities Administrators (CSA) has published its business plan for the period covering 2019 until 2022.
“The CSA priorities over the next three-year period intend to reflect the CSA members’ commitment toward the continued protection of investors from unfair, improper and fraudulent practices, the ongoing efficient functioning of capital markets, and the reduction of risks to market integrity and maintaining investor confidence in the markets,” the document said.
With a view to enhanced investor protection, CSA members have identified three strategic goals: enhancing the advisor-client relationship and the registrant conduct rules; developing targeted demographic programs and expanding public outreach to educate investors; and strengthening the effectiveness of enforcement and deterrence measures through increased collaboration, information sharing, and innovation.
Under its mandate of protecting investors, the CSA said it would promote rule changes to mitigate investor harms arising from the use of deferred sales charge (DSC) purchase options, as well as cut off the payment of trailing commissions to dealers that don’t provide suitability advice. The group also said it would work with self-regulatory organizations to enhance transparency in fund fees.
The group also said it would address issues of financial exploitation and cognitive impairment among older and vulnerable investors. Measures toward this include a trusted contact requirement, as well as disclosure of information and direction for temporary holds on disbursements from accounts of such clients.
Turning to enforcement and deterrence effectiveness, the CSA plan included points on improving market analytics to investigate insider trading and market manipulation; timely identification and response to emerging issues and threats through coordination of expertise; and explore opportunities to cooperate with federal agencies for stronger detection, prosecution, and deterrence of white-collar crime and securities law violations.
Under the umbrella of promoting fair and efficient markets, the regulatory body committed to promote financial stability and reduce systemic risk through effective market oversight; enhance fairness and ensure all participants have equal access to capital markets; and respond to emerging regulatory issues related to technology.
Noting questions about how effective promotional activities in the venture market are in sharing all relevant information and addressing all regulatory issues, the CSA said it will conduct a two-phase project on the effectiveness of the stakeholder processes. Measures to regulate crypto-assets were also highlighted, including a possible tailored regulatory regime for crypto-asset trading platforms and continued research that could lead to custodial requirements related to the trading and holding of regulated crypto-securities.
The CSA also said it would increase its focus on streamlining regulation, as well as seek enhanced performance through information technology and data strategy.
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