The Investment Industry Regulatory Organization of Canada is proposing to merge with the Mutual Fund Dealers Association, a move IIROC says would reduce duplication and save millions of dollars that could instead be invested in growth and innovation in the investment industry.
The idea of merging the MFDA and IIROC, which oversees firms and financial advisers, has been suggested over the years to reduce overlap. The latest such suggestion came last fall in a report from the C.D. Howe Institute. IIROC grew out of the Investment Dealers Association, while the MFDA was created in 1998 as the mutual fund business boomed.
“That means addressing the conflict of interest concerns that exist between the mandates of SROs and the interests of SRO members,” Gordon said. In its own 44-page paper released Tuesday, IIROC said it had consulted with investors, dealers and advisors, as well as professional bodies and industry associations, adding that its plan would enhance investor access to advice, products, and services, and improve investor protection.
“Significant demographic shifts and technological innovation have together changed the needs of Canadian investors and the way in which the investment industry serves them,” the report said, adding that efforts by firms to innovate were being hampered by regulation of investment accounts and products that is “fragmented and duplicative.”