Compliance officers (COs) and company executives surveyed for Investment Executive’s 2017 Regulators’ Report Card were much happier this year than in 2016 with the level of guidance and assistance their respective regulators are offering.
There’s consensus that regulators are making a concerted, albeit uneven push to keep survey participants abreast of emerging issues. Many COs and company executives also shared the sentiment that regulators have increased the frequency of their efforts to offer a mix of online courses and face-to-face training.
As a result, all but one of the six regulators in the survey saw their ratings in “the guidance and assistance that the regulator provides in terms of training and/or education” category, which covers a range of ongoing training from on-site seminars to webinars, increase over the past year.
The regulators that made the most strides were lauded for developing relevant resources and for connecting COs and company executives to knowledgeable people on the ground at the regulators.
“[The regulator] is making a much bigger effort to make industry participants understand how they fit in and why,” says a director of compliance with an invesment-managment firm in Ontario about the Ontario Securities Commission (OSC). That regulator’s rating in the category rose substantially to 6.6 from 5.8 year-over-year.
Still, many survey participants tempered their praise of the OSC – not for its lack of training initiatives, but for the content that’s presented. “They bring up stuff that’s a little late to the parade,” says a company executive with an Alberta-based exempt-market dealer (EMD). “They’re really behind on issues.”
The OSC, for its part, offers a mix of “forward-thinking” guidance on incipient regulatory issues and pointers on staying compliant, says Leslie Byberg, executive director and chief administrative officer with the OSC.
The OSC seeks feedback on what topics COs and company executives need more instruction on for every “outreach session” the regulator holds in order to address any perceived gaps in its efforts, Byberg adds.
Meanwhile, the Investment Regulatory Organization of Canada (IIROC), a self-regulatory organization (SRO), netted the highest rating in the category at 7.2, up from 6.9 last year. Many survey participants praised IIROC for providing timely information in a variety of forms – through committees, conferences and webinars.
“The education is very relevant to what [we] do because the people who put it on look for subjects that are closer to the dealer,” says a chief CO (CCO) with an IIROC-licensed firm in Ontario.
The increased happiness with IIROC’s efforts may stem from the fact that there has been a shift in the way the SRO designs its educational programs, says Lucy Becker, vice president of public affairs and member education services with IIROC: “In the past, we were a little more focused [on] findings that were coming out of compliance reviews. Now, we’re really focusing on new rules.”
A CCO with a securities dealer in Quebec lauds IIROC’s change in approach: “[It’s kept] us educated on new issues, particularly in the past couple of years.”
The B.C. Securities Commission (BCSC) also saw a significant boost in its rating for this category, rising to 7.1 from 5.9 last year. The BCSC’s high rating may be attributed in part to the quality of the information the regulator distributes.
Says an executive with an Alberta-based EMD: “[The BCSC offers] good resources and good information.”
“[The BCSC] does quarterly outreaches,” says a CCO with a B.C.-based investment-counselling firm. “[Although] you can’t rely on that for all the answers, it’s a [good] forum for discussion.”
Nevertheless, many survey participants noted that their regulators’ guidance and assistance sometimes lack depth and scope.
Even IIROC wasn’t immune from this criticism. “I would like stuff to be a little more nuanced,” says a CCO with an IIROC-licensed dealer in Ontario. “We’re counting on [IIROC] to tell us what’s acceptable and what’s not.”
IIROC, for its part, is gathering feedback to improve its educational efforts, Becker says: “Sometimes, there are different nuances. And, certainly, we are very mindful of that.”
Survey participants who deal with the Autorité des marchés financiers (AMF) took that regulator to task for not notifying them of issues to watch for and for offering limited access to educational resources. The AMF’s rating in the category was the only one to decline (to 5.5 from 6.2 in 2016).
“[The AMF] will be aware of something and not tell you it’s a problem,” says a CCO with an Ontario-based investment dealer.
Adds a CO with a Quebec-based portfolio-management firm: “[The AMF] does have a few seminars, but they’re all in French.”
Louise Gauthier, senior director of distribution practices and SROs with the AMF, confirms that the regulator’s presentations are in French, but points out that there are exceptions: published material and conferences held outside Quebec.
© 2017 Investment Executive. All rights reserved.