Who oversees the investment funds industry?

Securities commissions in each jurisdictionand self-regulatory organizations oversee the investment fund industry to help ensure that investors’ interests are well-guarded. They set rules governing everything from how and when information about a fund must be provided to investors to the standards of conduct advisors must meet. The different roles of these organizations are described below:

Securities Commissions

Each province and territory in Canada regulates the distribution and sale of investment funds and other securities in its jurisdiction through a government agency, usually known as a securities commission.

The securities commissions across the country have formed a voluntary organization, the Canadian Securities Administrators (CSA) to improve, coordinate and harmonize regulation of the Canadian capital markets. However, some securities laws may differ among jurisdictions.

Self-Regulatory Organizations

Some securities commissions have delegated regulation of mutual fund dealers to the Mutual Fund Dealers Association of Canada (MFDA). All mutual fund dealers in these provinces must be a member of the MFDA. The MFDA’s functions include:

  • Setting regulatory standards for its members;
  • Auditing members for compliance with those standards;
  • Investigating complaints; and
  • Taking enforcement action when necessary.

Investment dealers are required to be members of the Investment Industry Regulatory Organization of Canada (IIROC). IIROC is responsible for regulating its members by:

  • Setting regulatory standards,
  • Confirming advisors and sales representatives meet education and qualification standards to be licenced,
  • Auditing members for compliance with those standards,
  • Investigating complaints, and
  • Taking enforcement action when necessary.

Unlike the securities commissions, the MFDA and IIROC are not government agencies. They operate under the authority and supervision of the securities commissions.