Advisors are still trying to figure out whether a newly launched provincial regulator will make any difference to the way their business is done.
New Brunswick’s new Financial and Consumer Services Commission (FCSC) has begun operating, with that mega agency assuming regulatory authority over securities, insurance, pensions, consumer affairs, co-operatives, credit unions, caisses populaires, and loan and trust companies.
But aside from changes to the letterhead, it's unclear whether the new agency will have any impact.
“I don’t think this will have a major impact, it’s just a consolidation of offices," said Barry Dennis, planner and branch manager of Dennis Financial Inc in Fredericton."There may be some efficiencies, although that would be hard to see.
“I suspect the regulatory environment between the securities and life-insurance industries are probably not similar.”
The new body replaces the New Brunswick Securities Commission (NBSC) and Office of the Consumer Advocate for Insurance. In a CBC report last year, the NBSC came under fire for being among the worst provincial regulators when it came to enforcement. Of the $2.9 million in fines issued by the NBSC between 2007 and 2011, only 17% were collected.
“The problem with collecting these fines is that you can’t get blood from a stone,” said Dennis. “That’s not going to improve. A lot of people haven’t taken their responsibility seriously and they don’t consider the power a securities regulator should have; they just ignore.”
The formation of the new provincial regulator also comes as Ottawa continues its push for a single national regulator. An earlier attempt to create a single national regulator was thwarted when the Supreme Court of Canada ruled in 2011 that Ottawa’s attempts infringed on some provincial constitutional responsibilities.
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While some provinces, notably Quebec, are resistant to a federal regulator, Dennis says it may be welcome by New Brunswick advisors.
“Speaking only for New Brunswick... you have a bureaucracy full of people but what are they really doing?”
FCSC Chair David Barry said the new agency, which he heads, would provide for greater efficiency.
“We live in a world with a rapidly changing financial and consumer services marketplace where increasingly complex products and services are being offered,” said Barry, in a statement. “Under this new model, the regulation of financial services in New Brunswick will be more effective with consistent and appropriate regulatory oversight allowing us to respond to evolving marketplace needs.”
The FCSC will have offices in Saint John and in Fredericton. It will be an arm’s-length Crown corporation, self-funded by the fees and assessments paid by the regulated sectors.
“Information is power for consumers; we will be providing information that can help them make informed purchasing and investing decisions,” said Barry. “New Brunswickers can contact us when they have questions or concerns related to their financial services.”
The legislation that created the FCSC also created a tribunal to perform adjudicative functions. This will operate independently from the administration and policymaking functions of the FCSC. It will hear matters related to enforcement as well as appeals of a regulatory decision made by FCSC staff. The tribunal will provide the regulated sectors with a transparent and consistent hearing process, the FSFC said in its press release.