Canadian securities regulators issue relief orders as pandemic imposes operational pressures on industry
In line with efforts to ease the regulatory burden on firms, the Canadian Securities Administrators (CSA) has pushed back the timelines for registrants to implement its framework of client-focused reforms (CFRs).
As per a newly issued relief order, the CSA has given registrants an extra six months to enact conflicts-of-interest provisions, delaying the deadline to June 30, 2021. A second relief order has extended the timeframe for relationship disclosure provisions to take effect, giving firms a new deadline of December 31, 2021, at the same time as all other remaining changes.
“We recognize that as a result of the pandemic registered firms are facing enormous and unprecedented operational pressures that impair their capacity to pursue the scheduled implementation of the Client Focused Reforms,” Louis Morisset, CSA Chair and President and CEO of the Autorité des marchés financiers, said in a statement.
Discussions with industry stakeholders through its Client Focused Reforms Implementation Committee, the CSA said, has revealed the need to have a single implementation date for relationship disclosure, “know your product,” and enhanced suitability provisions of the reforms.
It acknowledged that because of urgent efforts to redeploy staff and ensure the continuation of key business functions, many firms will not be able to implement the conflicts-of-interest reforms based on original expectations. At the same time, it encouraged registrants to consider the reforms now as they interact with clients who, especially given the challenging circumstances, need advice that puts their interests first.
“While reiterating the importance of these reforms, we are providing this relief to ensure registrants have the capacity to remain focused on front-line activities and use all their efforts to diligently respond to the current needs of their clients,” Morrisset said.
Shortly after the CSA’s announcement, the Investment Industry Regulatory Organization of Canada (IIROC) said it will revise implementation dates for its Plain Language Rulebook (IIROC Rules) to December 31, 2021.
“IIROC will continue to collaborate with the CSA and other regulators to protect investors and the integrity of Canada's capital markets during these unprecedented times,” said Irene Winel, IIROC's Senior Vice-President, Member Regulation and Strategy.