Messages and CIRO Legal Authority

It is true that it took a long time to get to a consensus on that point. But only three years later, with an enormous effort, here we are. To accomplish major structural reform in the regulatory sector from start to finish in three years - and to do so during a pandemic - is something to be proud of.

It was also an effort which deserves thanks. To our CSA colleagues, for tackling an enormous task and for overseeing the project, including through several rather bumpy phases, thank you. To our industry colleagues, investor advocates and many other stakeholders who dug in and provided invaluable advice, perspective and commentary through multiple requests for comment and input, thank you. And especially to all of my colleagues at CIRO, thank you for your hard work, your patience and your support.

Of course, this was and is much more than just combining two existing organizations and as a result, the real work is just beginning. As we evolve the regulatory structure, we have the goal of making things simpler, not more complicated.

“Within the guardrails of strong investor protection, we want to give firms more flexibility in how to structure themselves to serve their clients, not less and to make it easier and simpler for Canadians to access financial advice.”

Within the guardrails of strong investor protection, we want to give firms more flexibility in how to structure themselves to serve their clients, not less and to make it easier and simpler for Canadians to access financial advice. Importantly, as we continue to work in a system with multiple financial services regulators, we know we also need to deliver regulation in a consistent fashion both internally and with our colleagues and counterparts: like regulation for like activities with like risks.

That will be an evolutionary – and from time to time I suspect, revolutionary – process and in the meantime, we need to ensure the ongoing delivery of our core regulatory mandate. Our inaugural Annual Priorities, published in June, aim to help us keep the balance between all the things we need to get done, internal and external.

It is important to remember that in addition to bringing two regulators together on January 1, we also brought together two organizations. Two organizations with different processes, different systems and most importantly, with two different cultures. So, in a sense, we are simultaneously in the middle of two parallel integrations: bringing together two regulatory models as the foundation for regulatory renewal and bringing together two organizations as we create a new culture together.

Unsurprisingly, much of our functional integration effort – like the regulatory integration – is gated by the speed of technological integration. Although both predecessor SROs were relatively small organizations, we each had corporate systems, business systems and technology infrastructures. We made the decision to focus most of our effort this first full year together on our corporate and infrastructure technology in order to ensure a strong foundation on which to integrate business systems.

At the same time though, we’ve made good progress in our functional integration. All our regulatory and infrastructure areas are under single leaders and we have begun consolidating and streamlining many of our teams and processes.

For example, one of the more significant integration tasks that is currently underway is the bringing together of all of Member compliance activities across investment and mutual fund dealer firms. We've also stood up the Office of the Investor and our Investor Advisory Panel and they’ve joined their outward focused efforts with those of our Member Intake and Innovation departments to focus on their outward mandate, each element of which is critical to CIRO’s future success.

We have also made significant progress in achieving some of the strategic objectives, the need for which helped drive the amalgamation in the first place.

Our colleagues at the Autorité des marchés financiers (AMF) have proposed delegating to CIRO responsibility for examining the compliance of mutual fund firms in Québec, something the AMF has up to now done directly. Even more significantly, they have proposed delegating the responsibility of registering mutual fund representatives in the province, the first jurisdiction in Canada to do so. Both measures are being considered by the Government of Québec and we are optimistic. Consolidating MFD representative registration within CIRO, to match what we do today for investment dealers, is a key element of bringing efficiency to the system.

At the time of writing, CIRO also has its first three dual-registered firms, simplifying operations and allowing clients to easily access additional products and services as their needs change. Many more firms, including several large integrated institutions, are also in the pipeline.

Mutual Fund Dealers, who had previously been limited in their ability to efficiently deliver ETFs to their customers, can now be carried by an investment dealer and connect to the markets where ETFs trade. And single platform dealers, whether they are mutual fund or investment dealers, can more easily expand their businesses in ways which make sense for them.

As we continue to make progress on our major milestones, we are also moving forward with a greater sense of who we are, as a brand-new organization. And who we are, above all else, is a group of over 600 people working in the public interest.

In any organization, people come and go as their careers and lives evolve and they re-evaluate what’s next. Organizational – structural – change is often a catalyst for people as it prompts that self-evaluation and, sometimes, movement as a result. So was the case this past year at CIRO.

We said goodbye to several colleagues, all of whom I would like to thank for the contributions which helped bring us to where we are today. We’ve also welcomed many new partners and I look forward to the opportunity of building our future organization together with them.

Let me close by thanking everyone who got us here today: Our colleagues at the CSA, the Boards of Directors, both past and present, the member firms and most of all the staff and management of CIRO.

I cannot wait to see where we are one year from now.

Andrew J. Kriegler
President and CEO

It has taken a team of talented and dedicated individuals to bring the two organizations together and it has been their skills, experience and dedication which not only brought the new organization into existence, but which is also the driving force behind our early accomplishments.

Thank you to our Member firms for supporting the cause of an amalgamation for many years and for supporting the reality of it through the last 18 months. We know that to be a successful self-regulatory organization, we need your experience, your perspective and your commitment to doing the best for Canadians and we are grateful for it every day.

Your Board understands that it is important for CIRO’s success that we keep the “self” in self-regulation. This year, we have seen representation on many of our advisory committees and councils from both Investment Dealers and Mutual Fund Dealers coming together at the same table for the first time. It has been fantastic to see.

We would also like to express the Board’s sincere thanks to those in the industry who made their voices heard through their engagement with both our legacy organizations and now with CIRO. Our Regional Councils have been an important part of raising issues, providing input on various initiatives, and serving as our connection to local and regional marketplaces and stakeholders.

This year, we also introduced an Office of the Investor and our Investor Advisory Panel to ensure that the investor’s voice is heard in the same way CIRO hears industry feedback when we develop policy.

We have taken tangible steps forward to develop and build our CIRO brand. We established a new name and logo to reflect our coming together as a new organization, while simultaneously signaling a new chapter for Canadian investors. CIRO’s new logo conveys a feeling of trust, and the three lines show upward movement to demonstrate progression and signify growth. Additionally, the lines represent our three key stakeholders: investors, members, and the capital markets.

Your board understands that even in advance of a common rulebook, there is a need to have common interpretations of our existing rules. Exciting work is underway to merge our rules into a single rulebook with the goal of eliminating regulatory duplication, arbitrage and ensure that like activities are regulated in a similar fashion.

Overall, our strategic planning program is on track. To date, we have engaged in creating the Vision, Mission and Values for the organization. On June 1, we rolled out our Annual Priorities, which outline what we are working towards, and how we will achieve it.

“CIRO’s eight priorities focus on how we will support better outcomes for the industry and our own organization.”

CIRO’s eight priorities focus on how we will support better outcomes for the industry and our own organization. Of course, this includes furthering initiatives related to investor protection, as well as finding ways to harmonize our regulatory approach and supporting industry transformation.

This year’s annual report is meant to highlight the hard work that has been undertaken by countless CIRO staff, the CSA and our member organizations across the country. In addition to highlighting their hard work, the CIRO board would also like to recognize the accomplishments of the former board members of both legacy SROs for their forward-thinking and determined leadership. Without their dedication to serving the investment industry, none of this would have been possible. I would also like to take this opportunity to thank my colleagues on the CIRO Board, whose vision has helped shape this evolving organization.

The shared success of our journey so far is a testament to the trust that the industry has in the self-regulatory framework and its confidence in our ability to address the challenges ahead: regulatory fragmentation, duplication, and the need to provide more opportunities to better serve Canadians. Our board is proud to be involved in making things better in a time of uncertainty and I am confident that as the industry continues to evolve, so will we.

Timothy Hodgson,
Chair of the Board