The Investment Dealers Association and the Canadian Investor Protection Fund have agreed to curtail CIPF’s oversight of IDA firms, in an effort to reduce regulatory costs.

A notice published in the OSC Bulletin today explains that the CIPF has agreed to eliminate the regulatory requirements it imposes on IDA firms, known as the CIPF Minimum Standards. “The need for the CIPF Minimum Standards is now significantly diminished because the [IDA] is now the sole remaining Canadian self-regulatory organization with member regulation responsibilities.”

“As far as we are aware, the CIPF is the only securities industry related investor protection fund in the developed world that carries out regulation oversight activities. We are aware of no other investor protection fund in Canada in any industry that carries out regulation oversight activities. The changes agreed to between the association and the CIPF bring the CIPF in line with these other investor protection funds,” it adds.

It says that IDA rule changes are necessary to reflect the role changes and to ensure that CIPF has adequate ongoing access to firms’ premises, information and personnel, should the need arise due to an insolvency or for other reasons. The changes would limit the ability of IDA firms to sue the CIPF; and codify firms’ obligations to it.

“The rules will have no effect on market structure, member firm versus non-member firm competition and competition generally,” it says. “Overall industry costs will be reduced to the extent there are cost savings at the CIPF resulting from their reduction of their oversight role.”