Securities industry registration is facing a fundamental restructuring, with the Ontario Securities Commission (OSC) planning to download the chore of registering dealers and reps to the Canadian Investment Regulatory Organization (CIRO).
In a notice published today, the OSC outlined its plans to delegate its registration duties for investment dealers, mutual fund dealers, and fund reps to the industry self-regulatory organization, starting in the spring of 2025.
“This move will streamline the registration process, reducing the burden for registrants in Ontario, while the OSC’s continued oversight of CIRO will involve a strong degree of enhanced investor protection,” said Grant Vingoe, CEO of the OSC, in a release.
The registration of firms in other categories — such as fund managers, portfolio managers, and exempt market dealers — would remain with the OSC.
Separately, the Canadian Securities Administrators (CSA) said the other provincial regulators will also be exploring the delegation of certain registration responsibilities to CIRO.
That delegation “may be restricted to routine applications of investment dealers and mutual fund dealers… in some jurisdictions,” it noted.
“Delegating registration functions would allow CSA members to focus on the oversight of CIRO, regulatory policy, addressing novel issues and granting exemptive relief applications,” the CSA said.
Shifting the OSC’s dealer registration function to CIRO was one of the recommendations of the Capital Markets Modernization Taskforce in its final report issued in January 2021.
“Transitioning these registration functions to CIRO is a positive step towards a more modern and harmonized regulatory system for market participants and investors,” Vingoe said.
“Delivering a more efficient registration framework is one of six ways in which CIRO’s strategic plan brings value to investors, to the industry which serves them and to Canadians as a whole,” said Andrew Kriegler, president and CEO of CIRO, in a release.
“CIRO will work with the OSC to ensure a smooth transition for registrants,” Kriegler added.
The SRO also noted that the change won’t alter the information that firms and reps are required to provide to regulators as part of the process of obtaining, and maintaining, registration.
Commenting on the CSA’s plan to explore delegation, which could be set out in local orders or proposed rule changes, Stan Magidson, chair of the CSA and chair of the Alberta Securities Commission (ASC), said, “In 2023, we sought to modernize the Canadian self-regulatory framework in a way that adapts to evolving capital markets and responds to the needs of market participants and investors alike. Today’s announcement marks a natural progression of those efforts and a continued commitment to our goal of strengthening Canada’s capital markets regulatory system.”
He said the initiative is expected to benefit market participants through a more streamlined process and allow regulators to “prioritize policy developments that continue to foster healthy, fair and efficient markets.”