IDA on Securities Regulation in Canada

Securities Regulation in Canada

Investor's Corner > Securities Regulation in Canada

In Canada, regulation of the securities industry is carried out by provincial securities commissions and self-regulatory organizations, which include the Investment Dealers Association of Canada.

Each province has government bodies -- securities commissions or administrators -- that oversee a provincial securities Act. This Act is a set of laws and regulations which outlines what participants in the market can do.

The securities commissions delegate certain aspects of securities regulation to the Investment Dealers Association of Canada, the Mutual Fund Dealers Association of Canada, Market Regulation Services Inc., and the Montreal Exchange.

These organizations are self-regulatory organizations (SROs). A self-regulatory organization is an organization that has been given the authority and the responsibility to regulate its members.

The Canadian SROs have been delegated responsibility by provincial governments to ensure that SRO Members meet agreed-upon standards that are written into the provincial laws governing securities. The SROs regulate markets and trading as well as Member firms, their employees, and their business practices, by:

setting standards that registrants must meet prior to employment;

creating rules governing how markets must operate;

monitoring and examining investment dealers on a regular basis including setting capital requirements to ensure firms are solvent and following all the rules;

extensively investigating suspected infractions; and

employing investigators and compliance officers to ensure the dealer community is meeting these standards.

The Investment Dealers Association is responsible for the regulation of its Members firms (Member Regulation) and monitors the bond and money markets. To find out if a firm is a member of the Investment Dealers Association, see our Member List.

The provincial securities commissions and administrators have formed a national group to work towards making securities regulations consistent and harmonized across Canada. This group is called the Canadian Securities Administrators (CSA).