What’s new with the CAC?

Advancing investor protection, industry professionalism, and market integrity across Canada, the CAC works to focus attention on pressing advocacy files dominating the regulatory agenda. Ensuring fair, equitable, and sustainable outcomes for stakeholders is more important than ever, and through our growing relationships with policymakers and regulators, we are working on several important initiatives. Below is a summary of two areas where we have recently provided comment letters to consultation processes. To see the comprehensive catalogue of our commentary letters, visit us online at cfacanada.org/advocacy.

CIRO Proposed Proficiency Model – Approved Persons under the Investment Dealer and Partially Consolidated Rules

The Canadian Investment Regulatory Organization (CIRO) published for comment its proposed amendments to its proficiency rules applicable to the Approved Persons under the Investment Dealer and Partially Consolidated Rules.

The CAC is pleased that CIRO intends to introduce an exam blueprint or syllabus with information including topic weightings and sample exams, aiming to provide sufficient information to enable self-directed study candidates to reasonably prepare for and pass exams. 

The CAC acknowledged the changes of dropping the proposed requirement for firm sponsorship as part of exam eligibility but cautioned against unconstrained advertising and business development by exam preparatory vendors and the possibility of misleading representations to industry aspirants. 

It is suggested that CIRO introduce training and continuing education components on certain emergent issues and developments relevant to the competency profiles. The CAC also made targeted suggestions around transition relating to the CFA Program.

OSC Proposed Process for Distributing Disgorged Funds to Harmed Investors

The Ontario Securities Commission (OSC) published for comment a rule proposal to establish a new process for returning money to harmed investors, known as disgorgement.

The proposed process would apply when disgorgement is ordered in an enforcement proceeding before the Capital Markets Tribunal or the Ontario Superior Court of Justice and the OSC receives sufficient funds to make a distribution feasible.

The CAC expressed their support for the proposed rules, particularly:

• The OSC's ability to distribute funds without a court-appointed administrator where applicable
• The potential for a more efficient and timely process for harmed investors
• Consideration of other jurisdictions' frameworks in developing the rules

Allowing investors to also seek redress through civil claims or Ombudsman for Banking Services and Investments (OBSI) complaints without necessarily impacting their rights to seek disgorged amounts

• The CAC offered several suggestions to the OSC to enhance the proposed framework, including:
• Taking on a larger role in distributions to save third-party administrative costs
• Consulting with organizations like OBSI for expertise in claims adjudication
• Providing published notice with reasons if the OSC decides not to distribute funds due to cost concerns

Setting a high threshold for deciding against funds distribution 

• Regarding notice to harmed investors, the CAC advised that the OSC:
• Expand beyond website postings to direct notification of potential claimants
• Implement a notice delivery obligation when investor information is available
• Amplify awareness through investor protection clinics and outreach initiatives

 Have your say

If you would like to participate in advocacy activity related to these letters or future policy and regulatory initiatives, provide comments on ongoing initiatives, or learn more about volunteer opportunities in advocacy or as a part of the CAC, please contact cac@cfacanada.org.

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The Canadian Advocacy Council (CAC) is a volunteer advocacy council of CFA Societies Canada, representing the twelve Canadian CFA Institute Member Societies and, ultimately, Canadian CFA charterholders. The council includes investment professionals from across the country who review regulatory, legislative, and standard-setting developments affecting investors, investment professionals, and Canadian capital markets. The CAC strives to advance market integrity, transparency, and investor protection, and actively engages Canada’s securities regulators, self-regulatory organizations, industry associations, legislators, and other stakeholders through thoughtful leadership, direct engagement, and the publication of comment letters.