The Autumn 2003 newsletter of the Investment Dealers Association of Canada outlines a series of initiatives that are being tackled by the IDA’s member regulation division.

The IDA says that it will continue to pursue a variety of initiatives designed to implement risk-based compliance tools to improve effectiveness and contain costs. Notably, the IDA will implement the risk assessment model in sales compliance in 2004, and it will also develop an early warning system for sales compliance issues.

The IDA says it will also implement a comprehensive compliance report card, which represents the integration of the residual risk scores produced by the risk models in financial and sales compliance.

The IDA also intends to develop mandatory certification for chief compliance officers, similar to the certification it requires of financial officers. The associations says that this initiative will complement the work being done by the compliance and legal section in developing a general non-mandatory introductory course for new industry compliance staff.

The IDA adds that it is teaming up with the Canadian Securities Administrators to do a risk-based review of registration. The association notes that registration has not been subjected to a rigorous risk assessment evaluation to ensure the procedures being used by registration staff are effective in ensuring registrants are proficient and ethical. A proposal will be developed to conduct a risk assessment of registration procedures and develop a risk assessment model for registration.

In 2004-2005, member regulation will also be updating its performance benchmarks. The IDA says it will develop a “Potential at Risk Threshold”, that will benchmark firms against “reasonable expectations regarding meritorious client-generated complaints using screening criteria including firm characteristics, volume, nature and seriousness of complaints.”

The IDA is also planning a proposal to build capacity in the member regulation division to do cost/benefit analysis of its proposals to assess costs for important regulatory policy initiatives to better prioritize policy initiatives and ultimately produce more effective policies. It says it will prepare an implementation plan in 2004-2005 to maximize the capacity of the IDA to transfer knowledge concerning regulatory requirements to the industry.

The association says it will continue to pursue enhanced enforcement powers for SROs, that it will implement the recommendations of the Insider Trading Task Force; and, support the federal initiative to create effective Integrated Market Enforcement Teams.