Regulators protect investors by making and enforcing rules for the securities industry in Canada.
2 main bodies protecting investors
1. Provincial and territorial securities regulators
In Canada, provincial and territorial securities regulators, such as the Ontario Securities Commission (OSC), administer and enforce rules around how securities are issued, bought and sold and set minimum entry standards for market intermediaries who deal with investors. Securities regulators also regulate marketplaces and clearing agencies, oversee the Investment Industry Regulatory Organization of Canada (IIROC) and the Mutual Fund Dealers Association of Canada (MFDA), approve individuals and firms for registration based on proficiency and educational requirements and discipline firms and individuals. Securities regulators work together through the Canadian Securities Administrators (CSA).
2. Self-regulatory organizations (SROs)
In Canada, SROs regulate their members’ standards of practice and business conduct in order to promote investor protection. Canada has two main SROs:
IIROC sets and enforces rules for investment dealers and for equity marketplaces like the Toronto Stock Exchange and TSX Venture Exchange. It also monitors trading on those marketplaces, approves training courses and disciplines member firms and individuals.
The MFDA sets and enforces rules for mutual fund dealers and disciplines member firms and individuals.
In Quebec, the Montréal Exchange is also considered an SRO. MX is the only financial derivatives exchange in Canada, and currently lists equity options, options on ETFs, currency options, index derivatives, and interest rate derivatives.
Role of securities regulators
Securities regulators in Canada oversee advisers, dealers, investment fund managers, reporting issuers and securities markets. The OSC, the securities regulator in Ontario, is an independent Crown corporation that:
provides protection to investors from unfair, improper or fraudulent practices and fosters fair and efficient capital markets and confidence in capital markets.
uses its rule-making and enforcement powers to help safeguard investors, deter misconduct and regulate participants in Ontario’s capital markets.
regulates firms and individuals who sell securities and provide advice in Ontario, as well as public companies, investment funds and marketplaces, such as the Toronto Stock Exchange.
gets its power from the Securities Act (Ontario) the Commodity Futures Act (Ontario) and certain provisions of the Business Corporations Act (Ontario).
is funded by fees paid by public companies and intermediaries.
Quick facts about Ontario’s capital markets
In Ontario, there are:
- 1,400 public companies
- 3,700 investment fund issuers
- 1,300 registered firms
- 66,000 registered individuals
Source: OSC Annual Report 2013
Content in this section is provided in partnership with Investor Education Fund, a non-profit organization founded and supported by the Ontario Securities Commission that provides unbiased and independent financial tools to help Canadians make better money decisions. To find out more, go to: GetSmarterAboutMoney.ca
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