Two Canadian financial regulatory agencies sign MOU related to disciplinary actions in Ontario

The Investment Industry Regulatory Organization of Canada (IIROC) and the Financial Services Commission of Ontario (FSCO) announced on Wednesday that they have signed an information-sharing agreement that will “provide more effective regulation and strengthen consumer protection in Ontario.”

Under the Memorandum of Understanding (MOU), the two regulatory agencies will share the decisions and sanctions of their respective disciplinary processes, said a joint press release. Disciplinary decisions or actions taken by one regulator will trigger a review of the sanctioned individual’s activities by the other regulator, including consideration of the suitability of the individual for approval, licensing or registration. This may result in an investigation or other appropriate disciplinary action, the release said.

According to the MOU, IIROC and FSCO will also, where appropriate, conduct joint investigations and share relevant records and documents when both regulators are investigating the same individuals.

“Ontario investors will benefit from the protections provided by our increased collaboration,” said Andrew J. Kriegler, president and CEO of IIROC, in the release. “Investors must be protected from disciplined individuals who might seek to avoid sanctions and continue working in another part of the financial services industry.”

Brian Mills, interim CEO and superintendent of financial services at FSCO, added that the “lines that once clearly delineated the various financial services industries are being blurred as the sector evolves and more individuals become active in multiple areas. Greater cooperation and coordination between regulators is becoming an increasingly important part of our work to protect consumers.”

The agreement follows a similar accord announced last November between IIROC and the Chambre de la sécurité financière in Quebec. IIROC reported that it has more than a dozen such agreements with other Canadian and international regulatory organizations and is “pursuing more agreements” to improve the consistency and effectiveness of the regulatory system that protects Canadian investors. FSCO also has a number of MOUs designed to support regulatory collaboration across regulated sectors, and is likewise continuing to pursue additional partnerships.

IIROC is the national self-regulatory organization which oversees all investment dealers and their trading activity in Canada’s debt and equity markets. FSCO is an agency of the Ministry of Finance that regulates the insurance sector, including service providers who invoice auto insurers for statutory accident benefit claims; pension plans; credit unions and caisses populaires; the mortgage brokering sector; co-operative corporations; and loan and trust companies in Ontario.