How we did it

Compliance officers (COs) and senior executives from a cross-section of firms in the investment industry shared their thoughts about the regulators that oversee their businesses with Investment Executive (IE) once again for the seventh annual Regulators’ Report Card.

In particular, IE research journalist Kevin Philipupillai spoke with 69 COs and executives with firms regulated by the self-regulatory organizations (SROs) and the provincial regulators to gauge how regulators are performing in 20 key categories.

To ensure the accuracy of the results, survey participants with investment and mutual fund dealers first were asked to rate their SROs. Those same individuals then were asked to rate their overseeing provincial regulators – but only if the individuals had direct dealings with those regulatory bodies within the past two years.

Meanwhile, COs and executives with exempt-market dealers, investment-counselling firms and asset-management firms rated only the provincial securities commissions that oversee their businesses.

For the past three years, ratings for the provincial regulators in the survey have been broken out individually. Only the ratings for the Alberta Securities Commission, the B.C. Securities Commission and the Ontario Securities Commission are included, as these were the only provincial regulators to generate a sample size large enough to produce calculable ratings.

To generate the ratings for each of the 20 categories in the main table on page 19, survey participants were asked to rate the performance of their regulator(s) in each category on a scale of zero to 10, with zero meaning “poor” and 10 meaning “excellent.”

A green number on the table indicates that the rating for that category has increased by half a point or more from the previous year, whereas a red number indicates a decrease of half a point or more in the rating vs 2014.

Survey participants also were asked to provide the reasons they gave a regulator a specific rating. Those comments are included in the stories published as part of this year’s Report Card.

In addition to rating the SROs and provincial regulators, survey participants were asked to comment on regulatory developments and issues through two supplementary questions this year.

In one question, participants were asked how disruptive the process of adopting the requirements necessary for part of the second phase of the client relationship model reforms has been to their businesses. (See story on page 20.)

Survey participants also were asked whether Canada’s regulators should adopt a policy of rewarding whistleblowers – similar to the program the U.S. Securities and Exchange Commission has implemented – that would include anonymous reporting, employment protections and monetary awards for providing information that prevents harm to investors or leads to significant monetary recovery. (See story above.)