1. Meeting the standards
Dealers, advisers and investment fund managers must demonstrate fitness for registration at the time they apply for registration, and they must continue to do so throughout the period that they are registered.
For a firm, fitness for registration is assessed in terms of the firm’s ability to carry out its obligations under securities legislation, including the maintenance of:
- adequate working capital and insurance, books and records
- robust compliance systems
- procedures for dealing with clients, such as at accountAccount An agreement you make with a financial institution to handle your money. You can set…+ read full definition opening and in ongoing reporting.
Fitness for registrationRegistration A requirement for any person or company trading investments or providing advice in Canada. Securities…+ read full definition is assessed through proficiency, integrity and solvency criteria. For individual representatives, registration means that they have met the minimum standards for education and experience required for their category of registration.
2. Setting the bar
Together with the self-regulatory organizations (SROs), securities regulators administer, develop, update and enforce the rules for all firms and individuals that operate in Canada’s markets, including public companies, investmentInvestment An item of value you buy to get income or to grow in value.+ read full definition funds, intermediaries, dealers, advisers and investment fund managers.
3. Checking in
Securities regulators and the Canadian Investment Regulatory Organization (CIRO) regularly monitor firms, public companies and dealers, investment fund managers or advisers to make sure they’re meeting standards and following the rules. CIRO is a self-regulatory organization that oversees all investment dealers, mutual fundMutual fund An investment that pools money from many people and invests it in a mix of…+ read full definition dealers and trading activity on Canada’s debtDebt Money that you have borrowed. You must repay the loan, with interest, by a set…+ read full definition and equityEquity Two meanings: 1. The part of investment you have paid for in cash. Example: you…+ read full definition marketplaces. It consolidated the operations of the Investment Industry Regulatory Organization of Canada (IIROC)Investment Industry Regulatory Organization of Canada (IIROC) IIROC is now part of the Canadian Investment Regulatory Organization (CIRO) — a self-regulatory organization…+ read full definition and the Mutual Fund Dealers Association of Canada (MFDA).
4. Fair markets
Securities regulators and CIRO oversee all securities marketplaces in Canada, including the Toronto Stock Exchange (TSX)Toronto Stock Exchange (TSX) Canada’s largest stock exchange, North America’s third largest stock exchange, and the sixth largest in…+ read full definition and TSX Venture Exchange. They watch markets closely and monitor compliance with securities law and rules. Public companies must disclose information on a timely basis and in accordance with securities laws.
5. Taking action
If an individual or firm breaks rules of conduct, regulators take action, such as imposing appropriate sanctions or other disciplinary measures to prevent future harm. This could include placing terms and conditions on an individual or firm’s registration or suspending or revoking registration if the firm or individual becomes unfit for registration.
Clean sweep
Regular compliance reviews are one way the OSCOSC See Ontario Securities Commission.+ read full definition checks whether firms are following securities regulations. Some reviews are targeted inspections, or sweeps, where the regulator focuses on one particular issue or theme, across a sample of registered firms. The OSC performed a sweep of 87 portfolioPortfolio All the different investments that an individual or organization holds. May include stocks, bonds and…+ read full definition managers and exempt market dealers to assess their compliance with know-your-client, know-your-product and suitability obligations to check whether firms are investing appropriately for their clients. As part of this sweep, the OSC called clients of portfolio managers and exempt market dealers to ask questions about their experiences with the firm. The OSC issued its findings and is also planning to publish best practices and guidance to firms on these issues.