The British Columbia Securities Commission recently published an annual report summarizing its compliance-related findings for portfolio managers, investment fund managers and exempt market dealers based in BC.  The BCSC notes that the report is intended to assist Chief Compliance Officers in improving their compliance programs.

Examples of common compliance-related deficiencies identified by the BCSC include:

  1. Business Continuity Planning: Business continuity planning must adequately address the risk of losing key advising or dealing persons.  Many business continuity plans of smaller firms were found to designate that an adviser at another firm would assume advisory duties if the principal becomes incapacitated, potentially conflicting with the restriction against dual-registration.The BCSC noted that a number of individual registrants have not reported changes in their registration information with the BCSC.  These changes include changes to outside business activities which include director and officer positions and other positions of influence.
  2. Outside Business Activity Disclosure: CCO Annual Assessment of Compliance with Securities Legislation: The BCSC found that many CCOs, particularly those at smaller firms, are not conducting and documenting an annual assessment of securities law compliance by their firms.  The BCSC notes that they expect to see evidence that CCOs have reviewed their firms’ compliance program in light of the firms’ dynamic business environments.
  3. CCO Annual Assessment of Compliance with Securities Legislation:The BCSC found that many CCOs, particularly those at smaller firms, are not conducting and documenting an annual assessment of securities law compliance by their firms.  The BCSC notes that they expect to see evidence that CCOs have reviewed their firms’ compliance program in light of the firms’ dynamic business environments.

For further information, please consult the BCSC 2015 Annual Compliance Report Card