The Saskatchewan Financial Services Commission is working to beef up its enforcement arm, the regulator announced Monday.

In 2007, the provincial auditor concluded that the SFSC did not have adequate processes to investigate complaints from investors, and it made five recommendations to resolve those concerns, including that it:

> establish a formal system to focus investigative resources on the most significant complaints;

> establish standards for planning, conducting, and reviewing investigations;

> monitor all investigations including those referred to self-regulatory organizations;

> require and review sufficient information about investigations; and

> set performance targets to help measure progress towards objectives.

As a result of those recommendations, the SFSC engaged Robert Chambers of AssetRisk Advisory Inc. to develop a response to the auditor’s recommendations. That report was submitted on Aug. 27, and has now been released by the commission.

The SFSC says that it has reviewed the report, and accepted the recommendations in it. Commission staff are working to implement the recommendations, it adds.

The Chambers report’s recommendations include:

> implementing a risk-based case assessment worksheet;

> maintaining a report on cases referred to police and SROs to determine whether action by the SFSC is warranted;

> preparing a detailed procedures manual; review all investigations in process that are older than one year to determine whether they should be completed on an expedited basis or closed;

> setting time targets for acknowledging complaints within two days and completing case assessment within 30 days;

> ensuring that key recommendations by an investigator are subject to independent review and approval;

> setting minimum standards for investigator training, and provide added training;

> participating in future oversight reviews of SRO enforcement;

> measuring and monitor enforcement performance compared to targets; and

> in the medium term, implementing a case management system that includes time tracking.

The Chambers report notes that the enforcement branch is small, comprising the deputy director, four investigators and an assistant. “Therefore, processes including reporting must be tailored to the limited resources of a small group while still being effective,” it says. “Existing processes may have been adequate in earlier years but the increasing complexity of the securities industry and the pending economic growth of Saskatchewan require that improvements be made.”

“The recommendations in this report focus on improving procedures with consideration of measurement of performance that will provide staff with the tools to do their work as effectively as possible,” it concludes.

IE