To reduce market inefficiencies, Canadian and U.S. securities markets are moving to a standard trade settlement cycle of T+1 for investments that currently settle on a T+2 basis. According to a new report from Moody’s Ratings, the move to a T+1 settlement cycle in Canada will create liquidity risk for asset managers in markets that are still operating on a T+2 basis. The move to a T+1 settlement cycle in Canada, will occur on May 27, 2024.

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The Ontario Securities Commission (OSC) released their Strategic plan, identifying the OSC’s central goals for 2024 to 2030. The Strategic Plan highlights a shift in the OSC’s approach to retail investors. It also includes tougher, more visible enforcement, increased support for capital formation and innovation and a shift toward anticipating and planning for trends that are likely to require regulatory attention.

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CIRO is seeking feedback on its proposed new approach to its fee model. Fund dealer fees are currently calculated based on assets under administration (AUA). Under the proposed integrated fee model, fund dealer fees would be calculated based on both the size of their revenues and number of reps. Comments on the Proposed Amendments should be in writing and delivered by June 24, 2024.

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The Canadian Securities Administrators (CSA) has released two research reports examining the investment fund industry and investor behaviour post-implementation of the Client Relationship Model Phase 2 (CRM2) Amendments. The research reports look at trends in investment fund fees and risk-adjusted, gross performance over 2013-2020, which includes the period before and after the Amendments took effect.

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CIRO is publishing Phase 3 of its Rule Consolidation Project rule proposals, for comment. The Phase 3 Proposed Rules involve the adoption of rules relating to membership and member business activity approval, clearing and settlement of trades and trade delivery standards, and examination, investigation and enforcement rules. Comments on the Phase 3 Proposed DC Rules should be in writing and delivered by July 17, 2024.

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The Canadian Investment Regulatory Organization (CIRO) has released its three-year Strategic Plan. The Strategic Plan is grounded in CIRO’s new Vision, Mission and Values and has six strategic objectives. The Strategic Plan also lays out CIRO’s plan to focus on Transformational Initiatives that support the priorities of stakeholders and regulatory partners.

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On December 31, 2021, the Canadian Securities Administration (CSA) passed regulations (National Instrument 31-103 Registration Requirements, Exemptions and Ongoing Registrant Obligations “Client Focused Reforms”, (CFRs) based on the principle that in the client/advisor relationship, the client’s interests come first. With the CFRs, note taking to support suitability of a client’s account, became the law.

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The Canada Revenue Agency (CRA) published its new administrative positions on compliance obligations of financial institutions (FI) under Canada’s Income Tax Act. Changes to the Foreign Account Tax Compliance Act (FATCA) Guidance and the Guidance on the Common Reporting Standard (CRS) impacts FIs, resulting in significant changes to their due diligence procedures when dealing with account holders that are FI clients.

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CIRO has published Office of the Investor Fiscal Year in Review. A key priority outlined in CIRO’s first Annual Report is the promotion of the investor perspective through the Office of the Investor. The Office’s mission is to understand and inform investors, elevate the investor’s voice at CIRO, expand CIRO’s online investor education resources and deliver financial education to community groups.

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The Canadian Securities Administrators (CSA) recently released two reports on the oversight of the Canadian Investment Regulatory Organization (CIRO) and the Canadian Investor Protection Fund (CIPF). The Oversight Review Report of CIRO and the 2023 Annual Activities Report, (CSA Staff Notice 25-311) evaluate CIRO and CIPF’s compliance, efficiency, and market integrity of Canada’s financial markets.

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