Recently, each of the Investment Industry Regulatory Organization of Canada (IIROC), the Office of Compliance Inspections and Examinations (OCIE) at the U.S. Securities and Exchange Commission (SEC) and the U.S. Financial Industry Regulatory Association (FINRA) published their compliance and exam priorities for 2019. Although these reports are of most relevance to the firms directly supervised by these regulators, we think that these supervisory trends will be of interest to Canadian firms as well.
We’ve created the table below to compare exam priorities that these organizations have identified and that we think are of potential interest to the asset management sector in Canada. We also included information about the compliance exam priorities that the Compliance and Registrant Regulation Branch (CRR) of the Ontario Securities Commission (OSC) identified in its annual report (OSC Report), which we wrote about in our August 2018 bulletin.
Please note that these organizations take different approaches to describing their compliance exam priorities. For example, FINRA’s report describes its new exam initiatives for 2019 in detail. By contrast, the OSC Report lists only five, broad “focus areas” for its 2018-19 exams, but a deeper dive into that report indicates other areas of interest. For that reason, we’ve used two kinds of notation in the OSC column. Compliance priorities identified as a focus area for 2018-19 are marked with a “19”. An “18” marks the broad focus areas from the 2017-18 exam cycle as well as specific deficiency areas from 2017-18 that are similar to exam priorities that IIROC, the SEC and/or FINRA have flagged for the coming year. Links to the organizations’ reports are included in the table heading below.