Volume 1 Chapter 3 - The Canadian Regulatory Environment Flashcards
what is the primary goal of regulators?
Investor protection
Who is responcible to create legislation for the securities industries
Each province and territory
What is the regulatory body in quebec
Authorite des marches financiers - which regulates both the securities business and QC financial sector
Outside of QC, who regulates the financial sector
OSFI
Describe the Canadian Securities Administrators
is an umbrella org of Canadas ten provincial and three territorial securities regulators designed to improve, coordinate and garmonize regulation of the Canadian Capital markets. Mission - develop a national regulatory system that fosters fair, efficient, and vibrant capital markets in which investors are protected from unfair, improper, and fraudulent practices.
Describe Self-Gulatory Organizations
Are private industry organizations to which the provincial regulatory bodies have granted the priblege of regulating their own members. Enforce their members conformity with securities legislation. Have power to make own rules of conduct and financial requirements.
Delegated regulatory functions by thte provinces reg bodies.
Who monitors the SRO
the CSA
Do SRO regulations supercede provincial
No - they are in addition to provincial regulations
If there are two rulings on an SRO and CSA which rule must apply
The most stringent rule of the two applies
Suggest two SROs
- Investment Industry Regulatory Organization of Canada (IIROC)
- Mutual Funds Dealers Association (MFDA)
Describe the functions of IIROC
oversees all investment dealers and trading activity on debt and equity marketplaces in Canada.
Mandate - Set high quality regulatory and investment industry standards, protect investors, and strengthen the market integrity while maintaining effiecient and competitive capital markets
Suggest 5 roles of IIROC
- FInancial Compliance
- Business conduct compliance
- Registration
- Enforecement
- Market Surveillance
Describe Role 1. Financial Compliance
Dealer members are monitored to ensure that they have enough capital to carry out their operations
Describe role 2. Business conduct compliance
Dealer members are monitored to ensure that policies and procedures are in place to properly supervise the handling of their client accounts
Describe role 3. Registration
IIROC oversees professional standards and educational programs designed to maintain the competence of industry employees
Describe role 4. Enforcement
IIROC enforces rules and regulations that cover the sales, business, financial practices and trading activities of individuals and firms under IIROCs jurisdication.
Decribe role 5. Market Surviellance
IIROCs surveillance of trading and market related activites of participants of Canadian equity marketplaces includes the following practises:
- Real-time monitoring of trading activity on stock exhanges, the natural gas Exchange Inc, and Alternative trading systems across Canada
- Ensuring dealer members comply with the timely disclosure of information by publicly traded companies in Canada
- Carrying out trading analysis and compliance with trading rules.
Describe the mutal fund dealers association
Is the mutual fund industrys SRO responsible for regulating the distribution and sales of mutual funds by its members.
Does not regulate mutual funds themselves , this is done by provinical securities administrators.
How is the mutual fund industry regulated in QC
by the Autorite des marches financiers (AMF).
Agreement is signed by the AMF and MFDA to acoid regulatory duplication operating in QC and Canada
WHat is the Chambre de la securite financiere (CSF)
QCs SRO of the mutual fund and insurance industry.
What is CSF responcible for
responcible for setting and monitoring continueing education requirements and enforcing a code of ethics for liceensed reps
What is the OSFI
independent agency of Canada Gov designed to contribute to the safety and soundness of the Canadian Financial system.
What is the OSFI responsible for regulating and supervising in respect to federally registered institutions
- Deposit taking institutions (banks, trust and loan coy, and coorperative credit associations
- Insurance companies, including life insurance companies, freaternal benefit societies, and property and casualty incurance companies
- foreign bank rep offices that are chartered, licensed, or registered by the federal government
- Federally regulated pension plans.
What i an Investor Protection funds
offers the investing public protection against loss as a result of the financial failure of any firm in the self-regualtory system.
What account types are covered
IIROC dealer members
MFDA members
banks
trust and loan companies
credit unions
What is the Canadian Investor protection fund (CIPF) primary and secondary role
Primary role is investor protection
Secondary is overseeing the self regulatory system
What is the CIPF
protects eligble customers in the event of the insolvency of an IIROC dealer member. does not cover client losses that result from changing market values, nor does it insure accounts held at mutual fund companies, banks, or any other firms that are not members of IIROC.
who is CIPF sponsored by
Solely by IIROC and funded by quarterly assessments on IIROC dealer members.
what type of accounts are covered under CIPF
All customer accounts
which individual accounts are grouped together and what is the coverage per account
Cash, Margin, short sale, options, futures, tax-free savings accoutns, and foreign currency.
1 Million
What are the two types of accounts in a CIPF
General account and seperate account
Which seperate accounts are grouped and what is the coverage
RSPs, RESP and trusts
1 million
