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Regulatory framework

Regulatory authorities

What national authorities regulate the provision of financial products and services?

Financial institutions (FIs)

The Department of Finance is the government body responsible for federally regulated FIs (FRFIs), including banks, trust and loan companies, insurance companies and credit unions. The Department of Finance is principally responsible for proposing changes to legislation and adopting new regulation governing FRFIs.

The Office of the Superintendent of Financial Institutions (OSFI) and the Financial Consumer Agency of Canada (FCAC) are the primary regulatory bodies for FRFIs. Generally, OSFI is responsible for prudential regulation and establishing guidelines for capital, reporting and business practices, and FCAC is responsible for consumer protection.

In addition to OSFI and FCAC, each province has regulatory bodies that oversee FIs outside of the exclusive jurisdiction of the federal government. These include, among others, the Financial Services Commission of Ontario, the Autorité des marchés financiers (AMF) in Quebec, and the British Columbia Financial Institutions Commission. Recently, amendments to the Bank Act were enacted allowing a credit union incorporated provincially to assume federal jurisdiction provided it amalgamates with an existing federal credit union or with another provincial credit union being continued under the Bank Act.

Deposit-taking institutions are members of the Canada Deposit Insurance Corporation (CDIC) and Payments Canada (formally known as the Canadian Payments Association). CDIC is a statutory corporation that provides deposit insurance for certain types of small deposits to member institutions. Payments Canada operates Canada’s payment clearing and settlement systems. Membership in Payments Canada and CDIC is mandatory for Canadian banks as well as for certain trust and loan companies that accept deposits.

Securities registrants

Securities registrants include securities dealers and advisers, derivatives dealers and advisers, investment fund managers, exchanges and other alternative trading systems, designated ratings organisations and clearing agencies, commodities futures dealers and advisers. It also includes, in certain circumstances, those persons benefiting from an exemption from registration in any of those aforementioned categories.

Canada does not currently have a federal securities regulator. The securities market is regulated by the provincial and territorial securities commissions (securities regulators). Despite the lack of a federal regulator, the provincial and territorial regulators coordinate the development of national rules and standards through the Canadian Securities Administrators, which administers a passport system for extra-provincial registration. The most active securities regulators in Canada are the Ontario Securities Commission (OSC), the AMF, the Alberta Securities Commission (ASC) and the British Columbia Securities Commission (BCSC).

Previous attempts to create a national securities regulator in Canada were deemed to improperly fetter the jurisdiction of the provincial legislatures and therefore considered to be unconstitutional (see Reference re Securities Act, 2011 SCC 66, [2011] 3 SCR 837). In August 2014, the provincial governments of British Columbia, Ontario, Saskatchewan, and New Brunswick entered into a memorandum of agreement (MOA) with the government of Canada with respect to the creation of a cooperative capital markets regulatory system. The MOA proposes uniform provincial capital markets acts, complementary federal legislation, and the creation of a federal capital markets regulator. On 9 November 2018, the Supreme Court of Canada ruled that the proposed cooperative regulatory system is constitutional (see Reference re Pan-Canadian Securities Legislation, 2018 SCC 48). Consequently, while the proposed system is not yet in effect, there may be significant changes to the structure of regulation of capital markets in Canada in the near future.

What activities does each national financial services authority regulate?

Both OSFI and FCAC regulate financial services generally, including the business of banking, acceptance of deposits, the provision of insurance, trust services and mortgage lending by FRFIs. Also, OSFI regulates the administration of pension plans, and FCAC regulates the operation of payment card networks through voluntary codes of conduct. Provincial and territorial financial service regulators regulate FIs including provincial trust and loan corporations, credit unions, insurers and the sale of financial products offered by these FIs.

The securities regulators regulate securities markets, including the activities of trading, advising and dealing in securities, capital raising and the administration of investment funds and marketplaces. They also regulate the creation and trading of derivatives, including OTC derivative contracts and commodities futures contracts.

What products does each national financial services authority regulate?

OSFI or FCAC, or both, regulate the following financial products:

  • deposits including term deposits and retail deposit accounts;
  • offering of credit;
  • contracts of insurance, including life insurance, property and casualty insurance, and mortgage insurance;
  • pension plans; and
  • payment cards.

Securities regulators regulate any product that is a ‘security’, which is an open-ended category involving a fact-specific analysis, but which includes bonds, shares, stocks, investment contracts, subscriptions, profit-sharing agreements, income or annuity contracts not issued by an insurance company, options, OTC derivatives and commodities futures contracts.

Authorisation regime

What is the registration or authorisation regime applicable to financial services firms and authorised individuals associated with those firms? When is registration or authorisation necessary, and how is it effected?

Banks and other deposit-taking institutions

In order to carry on the business of banking in Canada as a Canadian institution, a bank must incorporate or be continued under the Bank Act. OSFI administers the application process for certificates of incorporation and makes recommendations to the Minister of Finance, who makes the ultimate determination, taking into account a number of factors considered relevant to the application, including the sufficiency of financial resources and the character and integrity of the applicants. Once approved, a new bank will be listed under Schedule I of the Bank Act and will be referred to as a Schedule I bank. A foreign bank may also make an application to the Minister of Finance to acquire control of an entity that offers or will offer banking services to the public. These banks are listed in the Bank Act and referred to as Schedule II banks. Finally, Schedule III banks are foreign banks that are authorised to operate branches in Canada. The activities of a branch can be restricted to lending or may be ‘full-service’, which includes the offer of retail deposit accounts.

A similar application process applies to federally incorporated credit unions (under the Bank Act) and trust and loan companies (under the Trust and Loan Companies Act).

Finally, deposit-taking institutions may also be required to register with Payments Canada and CDIC.

Insurers

In order to operate as an insurance company, a firm must apply to obtain a certificate of incorporation or analogous constating documents from the regulator or, as a foreign insurer, obtain an approval to insure risks in Canada. In addition, for each province and territory, any person or company that offers contracts of insurance must obtain a licence from the applicable provincial regulator for such activity.

Securities registrants

Securities legislation generally requires persons or companies to be registered (or to benefit from an exemption from registration) in order to engage in the businesses of trading in securities or advising with respect to buying or selling securities. The registration requirement has been described by the OSC as an ‘important cornerstone of the Act because through the registration process, the Commission attempts to ensure that those who engage in the trading of securities meet the necessary proficiency requirements, are of good character and satisfy the appropriate ethical standards’ (Re Gregory Co v Québec (Securities Commission), [1961] SCR 584, 4).

Legislation

What statute or other legal basis is the source of each regulatory authority’s jurisdiction?

In Canada, jurisdiction with respect to the regulation of financial services is shared between the federal and provincial governments. Pursuant to subsection 91(15) of the Constitution Act 1867, the federal government has exclusive jurisdiction over banks. Other financial institutions, including insurance companies, trust and loan companies and credit unions are subject to both federal and provincial regulation, depending on the province in which they offer services to the public.

This is not to say that provincial legislation does not apply to FIs. Provisional provisions can apply to bank activities so long as the provisions do not ‘in any way impair any activities that are ‘vital or essential to banking’ such that Parliament might be forced to specifically legislate to override the provincial law’(Bank of Montreal v Marcotte, [2014] 2 SCR 725).

FCAC and OSFI derive their powers from federal legislation: the Financial Consumer Agency of Canada Act and the Office of the Superintendent of Financial Institutions Act, respectively.

The securities regulators derive their powers from provincial securities legislation. For example, the powers of the OSC are given to it by the Securities Act (Ontario) and the Commodity Futures Act (Ontario).

What principal laws and financial service authority rules apply to the activities of financial services firms and their associated persons?

FIs

The primary legislation that applies to banks is the federal Bank Act and its regulations. The Bank Act sets out the incorporation and continuance of banks, permitted business activities, corporate governance and prohibitions on participating in certain investments or activities. The regulations pursuant to the Bank Act also have detailed provisions relating to consumer protection, including requirements for disclosure to customers of interest rates, account charges and customers’ consent to receive information electronically. The federal legislation that applies to trust and loan companies is the Trust and Loan Companies Act (TLCA) and the federal legislation that applies to insurers is the Insurance Companies Act (ICA) and their construction and principles are similar to the Bank Act.

Aside from banks, which are subject to exclusive federal jurisdiction, each of the provinces has its own legislation with respect to other regulated FIs. Except for Quebec, which applies civil law and a distinct regulatory framework, the provincial statutes governing FIs and those dealing in financial products and services are substantially similar to one another. Each province and territory also has legislation with respect to the incorporation, governance and permitted activities of credit unions and provincially incorporated insurance companies and trust and loan companies. Regulation of brokers and agents, and the distribution of financial products and services, is provincial. For example, the qualification and licensing of insurance agents in a given province are governed by regulations adopted under provincial insurance legislation such as the Act respecting the distribution of financial products and services in Quebec.

Securities registrants

Provincial securities laws and regulations apply to persons engaging in regulated securities activities, including registrants and reporting issuers (ie, companies listed on a stock exchange). Each province has its own securities legislation and regulations thereunder.

Privacy

Financial service firms must also comply with privacy legislation. The Office of the Privacy Commissioner of Canada is responsible for overseeing compliance with privacy legislation. In Canada, the Personal Information Protection and Electronic Documents Act (PIPEDA) applies to federally regulated businesses including banks, and other private sector organisations that conduct business in any Canadian province or territory except Alberta, Quebec and British Columbia, where provincially incorporated FIs must comply with the applicable provincial privacy legislation. Generally, privacy legislation in Canada provides that FIs must obtain express or implied consent before collecting, using or disclosing information that can be used to identify an individual, and they must provide the individual with a right of access to that information. The guidelines of the Privacy Commisioner require that consent be meaningful. Privacy legislation also establishes a positive duty on institutions to safeguard personal information and places limits on the retention of that personal information.

Anti-money laundering and terrorist financing

The Proceeds of Crime (Money Laundering) and Terrorist Financing Act (PCMLTFA) and its regulations are the basis of Canada’s anti-money laundering and terrorist financing (AML/TF) regime and it applies directly to FIs and securities registrants. Canada’s AML/TF regulator is the Financial Transactions and Reporting Analysis Centre of Canada (FINTRAC). These entities are considered ‘reporting entities’ under PCMLTFA and are therefore subject to record keeping, customer identification and transaction reporting requirements. These requirements under the PCMLTFA also apply to money services businesses (MSBs), which include businesses that offer any of the following: foreign exchange, money transfers or the sale of money orders or travellers’ cheques to the public. MSBs are required to separately register with FINTRAC as a condition to doing business in Canada. Notably, in June 2018, the Minister of Finance proposed amendments to regulations under the PCMLTFA that would also impose these regulatory requirements on ‘virtual currency dealers’. (A ‘money services business’ is defined as: ‘persons and entities engaged in the business of foreign exchange dealing, of remitting funds or transmitting funds by any means or through any person, entity or electronic funds transfer network, or of issuing or redeeming money orders, travellers’ cheques or other similar negotiable instruments except for cheques payable to a named person or entity.’)

In addition to the above-noted statutes, FIs and securities regulators regularly publish bulletins, guidelines and staff notices on the provision of financial products and services.

Scope of regulation

What are the main areas of regulation for each type of regulated financial services provider and product?

The areas of regulation depend on which statutes and regulations apply to a given financial service provider or product.

Federal legislation restricts the types of activities that financial services providers may engage in. For example, banks are only permitted to carry on the ‘business of banking’, and may not ‘deal in goods, wares, or merchandise or engage in any trade or other business’ subject to certain exceptions (Bank Act, SC 1991, c 46, s 409). FRFIs are also restricted from making certain types of investments. The applicable legislation also contains restrictions on certain types of ‘unfair practices’.

As part of its mandate to maintain financial markets, OSFI publishes guidelines and advisories for the purpose of ensuring compliance with requirements under federal FI legislation. The guidelines and advisories fall into four general categories: capital adequacy requirements (ie, tier 1 and 2 capital and liquidity and leverage ratios), limits and restrictions on lending, accounting and disclosure, and sound business and financial practices.

The areas of regulation that apply to securities registrants include registration requirements, capital and insurance requirements, business conduct, including know-your-client, suitability of investment and disclosure of conflicts of interest.

As discussed above, AML/TF legislation requires regulated FIs and MSBs to engage in transaction reporting. UN sanction and special economic measure legislation impose certain compliance obligations on FIs and securities registrants with respect to sanctions. Finally, financial services providers are generally subject to the privacy legislation.

Additional requirements

What additional requirements apply to financial services firms and authorised persons, such as those imposed by self-regulatory bodies, designated professional bodies or other financial services organisations?

FCAC is responsible for the Code of Conduct for the Credit and Debit Card Industry in Canada, which is a voluntary code of conduct for the payment card industry involving policies for disclosure of fees to merchants.

In certain provinces, there are self-regulatory organisations (SROs) that oversee the licensing and conduct of intermediaries in financial markets such as insurance brokers or agents.

SROs also serve the purpose of setting standards for stakeholders in capital markets; securities regulators have the power to issue recognition orders for SROs. The primary SROs for capital markets are the Investment Industry Regulatory Organization of Canada (IIROC) and the Mutual Funds Dealers Association (MFDA), which operate as national organisations (except for the MFDA in Quebec). They are structured as not-for-profit corporations and apply a membership model. IIROC sets industry standards and rules for investment dealers, while MFDA similarly oversees dealers of mutual funds and certain other exempt products. Both SROs have enforcement powers including the discipline of members, which is instituted before discipline committees.

Enforcement

Investigatory powers

What powers do national financial services authorities have to examine and investigate compliance? What enforcement powers do they have for compliance breaches? How is compliance examined and enforced in practice?

OSFI conducts regular reviews of FRFIs and issues review letters that may require or recommend they implement certain improvements and OSFI will risk rate each FRFI (on a scale from low to high). The power to enforce for compliance breaches is discussed below (see question 10).

The securities regulators have extensive powers to conduct investigations or inquiries of registrants and unregulated persons in respect of breaches of their rules and legislation. These rights and powers include the examination of documents kept by regulated persons, the right to enter the places of business of such persons and the power to summon and compel witnesses.

The Office of the Privacy Commissioner may conduct investigations and institute administrative proceedings in which it may examine documents and compel testimony. FINTRAC has similar powers to enforce compliance with the PCMLTFA and its regulations.

Disciplinary powers

What are the powers of national financial services authorities to discipline or punish infractions? Which other bodies are responsible for criminal enforcement relating to compliance violations?

Both OSFI and FCAC have the power to impose administrative monetary penalties for violations of their enabling legislation. An entity can also face penal sanctions under the relevant FI legislation; for example, under the Bank Act the fine for a contravention is up to C$5 million (C$1 million for a natural person) and imprisonment for up to five years.

In administrative proceedings, securities regulators may impose administrative monetary penalties or disgorgement orders for breaches of securities legislation. Securities regulators also have powers to bring quasi-criminal proceedings in which the court may impose jail time or orders for restitution.

In the event of non-compliance with the PCMLTFA and its regulations, FINTRAC has the power to impose administrative monetary penalties and, under proposed amendments to the regulations, will be entitled to revoke the registration of MSBs.

Privacy commissioners do not have powers to impose sanctions but can seek damages before the common law courts and have published cases of non-compliance on their websites.

Enforcement of offences under the Criminal Code falls to the provincial criminal prosecutors working with the various provincial and federal law enforcement agencies, such as provincial police forces and the Royal Canadian Mounted Police.

Tribunals

What tribunals adjudicate criminal and civil financial services infractions?

The common law courts of a province or territory hear cases for criminal and penal infractions. For example, OSFI or securities regulators may institute proceedings in provincial courts against persons who violate FI legislation or the Securities Acts. Administrative tribunals and disciplinary committees adjudicate civil infractions in the case of securities registrants.

Penalties

What are typical sanctions imposed against firms and individuals for violations? Are settlements common?

The sanctions will vary as a function of the severity of the infraction and the size of the FI or securities registrant. Following a well-publicised investigation, the OSC and AMF fined Canada’s biggest banks and investment dealers C$138.8 million for their role in the crash of the Canadian asset-backed commercial paper market in 2007. At the other end of the spectrum, regulators may be satisfied to apply the minimum sanction and limit the number of offences with a view to deterring certain conduct.

Settlements are common in Canada, which can be explained by several factors including the cost to defend regulatory actions, the broad powers of FI and securities regulators to obtain ex parte and freeze orders, the deference given by the courts to FI and securities regulators for their expertise and mission to protect the public and the recent use and acceptance of ‘no-contest’ settlements in certain jurisdictions. The AMF has taken the position that it will not accept ‘no-contest’ settlements.

In addition to imposing monetary sanctions, FI and securities regulators often require the FI or securities registrant to improve their internal controls and governance and have even required that directors and officers be replaced if they were involved in the wrongdoing or failed in their supervisory duties.

Compliance programmes

Programme requirements

What requirements exist concerning the nature and content of compliance and supervisory programmes for each type of regulated entity?

FIs

Prudential regulators such as OSFI have an interest in ensuring the sound financial management of FIs. This is achieved by publishing guidelines and advisories. Legislation also requires FIs to adopt their own policies that are best suited to their business and operations. Therefore, rather than prescriptive rules, prudential regulators in Canada adopt a regulatory approach based on principles. As an example, the policies and procedures that OSFI expects FRFIs to adopt include:

  • capital adequacy requirements;
  • prudential limits - relating to commercial lending, lending exposures, assets securitisation and related-party transactions;
  • sound business and financial practices which cover corporate governance, outsourcing arrangements, regulatory compliance management, operational risk management, use of derivatives, residential mortgage underwriting, interest rate risk and AML/TF and reinsurance;
  • accounting, financial reporting and disclosure; and
  • cybersecurity and reports of data breaches.

Securities registrants

Legislation applicable to securities registrants is more prescriptive and sets out requirements for these firms to have in place an internal control system, adequate policies and procedures and a qualified chief compliance officer responsible for monitoring compliance with their policies and procedures.

AML/TF

The PCMLTFA requires reporting entities, FIs and securities registrants to maintain compliance programmes designed to properly ascertain the identity of customers, assess transaction risk and report suspicious and other transactions to FINTRAC. Regulated entities are also required to have adequately trained employees in order to recognise risks of money laundering for their particular industry or sector.

Gatekeepers

How important are gatekeepers in the regulatory structure?

Gatekeepers are personnel and have an important role to play at both FIs and securities registrants and where gatekeepers fail in their internal control and oversight responsibilities, the FI or securities registrant in question can be subject to administrative sanctions if financial markets or customers are unduly put at risk. Gatekeepers are often chief compliance officers, internal auditors, company risk managers, members of the board of directors and even personnel who deal directly with customers, such as investment advisers.

FIs

OSFI has published guidelines on corporate governance and operational risk management. In this latter guideline, OSFI set out the concept of the three lines of defence, which is a structure to establish an appropriate accountability to manage operational risks.

The first line of defence refers to a business line and it is responsible for planning, directing and controlling the day-to-day operations of the FRFI and for identifying and managing its inherent operational risks, products, activities, processes and systems. The second line of defence is the oversight function and it concerns specialised reviews with respect to operational risks by such persons as compliance personnel and risk managers. The third line of defence is the internal audit function, which is responsible for objectively reviewing and testing the risk management controls, processes and systems of FRFIs.

Securities registrants

Securities regulators enforce the rules applicable to securities intermediaries. These rules include National Instrument 31-103 Registration Requirements, Exemptions and Ongoing Registrant Obligations, which imposes requirements on securities intermediaries to have a compliance system in place as well as qualified compliance officers and representatives. The disciplinary decisions of SROs such as IIROC and MFDA often identify failures of gatekeepers to protect customers or the integrity of financial markets. We have noted greater emphasis on the role of gatekeepers since the publication of National Instrument 31-103.

Directors' duties and liability

What are the duties of directors, and what standard of care applies to the boards of directors of financial services firms?

Directors of corporations have duties under common law and corporate statutes to act honestly and in good faith with a view to the best interests of the corporation, and to exercise the care, diligence and skill that a reasonably prudent person would exercise in comparable circumstances. This standard or care is integrated in the provisions of the Bank Act, the Insurance Companies Act and the TLCA. In reviewing the conduct of directors, Canadian courts will apply the ‘business judgement’ rule, whereby the courts defer to the judgement of management, as long as the decision lies within a range of reasonable alternatives and is not dictated by a regulatory requirement.

Under federal FI legislation, directors have a general duty to manage or supervise the management of the business and affairs of the FRFI. Directors also have specific duties to establish an audit committee and a conduct review committee, and to maintain policies for, among other things, disclosure to customers, resolving conflicts of interest, and dealing with complaints (see Bank Act, section 157; TLCA, section 161).

Most securities registrants are required to designate a responsible officer who is required, along with certain other officers and directors of these firms, to complete the partners, directors and officers course, which securities regulators expect directors and officers to apply to their oversight of their firms.

When are directors typically held individually accountable for the activities of financial services firms?

Members of the board of directors of FIs and securities registrants can be held personally responsible for infractions under FI and securities legislation as a result of provisions providing that offences can be imputed to officers and directors who participate in the offence or assent to or encourage the commission of the offence. Directors can also be held personally liable where they fail to act in good faith and knowingly turn a blind eye on or allow an offence to continue to be committed.

Private rights of action

Do private rights of action apply to violations of national financial services authority rules and regulations?

FI legislation does not provide a regime for private rights of action. However, customers of FIs have rights to file complaints with regulators, such as the FCAC as well as with independent complaint bodies including the Ombudsman of Banking Services and Investment (OBSI). FIs are required to use the services of a complaints body, but they are not required to accept a complaint body’s recommendations to settle a complaint.

Securities legislation introduces various private rights of action, including rights of action for misrepresentation in primary and secondary markets, and rights of action for insider trading. The OSC, the AMF and the ASC have established formal whistle-blowing regimes.

Customers have a common right to damages from financial services firms for breaches of privacy legislation in certain jurisdictions and can make complaints to the different privacy commissioners in Canada.

Standard of care for customers

What is the standard of care that applies to each type of financial services firm and authorised person when dealing with retail customers?

FIs are not subject to a statutory standard of care in dealing with retail customers. The FCAC, on the other hand, promotes and applies voluntary codes of conduct that, when applied to FRFIs, require them to adhere to the recommended conduct by the FCAC, including providing full, clear and understandable disclosure to customers. Securities regulators proposed certain regulatory amendments that would place a statutory standard of care but such changes were not adopted. In Quebec, securities registrants are required by law to deal in good faith with their clients.

Does the standard of care differ based on the sophistication of the customer or counterparty?

The level of sophistication does not affect the standard of care from a regulatory perspective. The courts have taken such factors into consideration in cases relating to the liability of financial advisers. The extent to which a customer relies on the expertise, and management of the adviser, such as a full discretionary portfolio manager, can have an important impact in determining liability and whether there was contributory negligence on the part of the customer (Laflamme v Prudential-Bache Commodities Canada Ltd., [2000] 1 SCR 638; Financière Banque Nationale inc. c Dussault, 2009 QCCA 1594).

Pursuant to securities legislation, the sophistication of customers has an impact on the availability of exemptions from prospectus requirements and regulations.

Rule making

How are rules that affect the financial services industry adopted? Is there a consultation process?

In general, amendments to existing regulation and new regulations to FI regulation are proposed in consultations conducted by the Minister of Finance (federal) or by provincial governments, subject to a public comment period that can vary between 60 and 120 days. Comments are reviewed and the resulting text of the amendments is adopted by the government (federally, it is the Governor in Council; provincially, it can be the Minister of Finance of the province). It is common for the amendments to come into force following a transition period that can be up to 12 months or longer in order to give the sector time to prepare for the changes.

The process is similar in the case of securities regulation and for changes to SRO rules. The consultation, if required, is conducted by the securities regulators, which publish substantive amendments for comment.

Cross-border issues

Cross-border regulation

How do national financial services authorities approach cross-border issues?

In most cases, FI and securities legislation applies within the perimeter of the Canadian or provincial territorial jurisdiction. For example, if a foreign bank wishes to offer a financial service in Canada, unless an exception applies, it will be required to obtain the prior approval of the Minister of Finance or OSFI.

In the case of securities regulators, specific exemptions are provided under securities regulation for foreign investment dealers, portfolio managers and investment fund managers, provided certain regulatory conditions are satisfied.

With regard to certain cross-border transactions, the FI and securities regulators have adopted exemption and mutual recognition frameworks. For example, under the trade reporting and recognition rules adopted by the securities regulators, certain Canadian counterparties are permitted to rely on the compliance by foreign dealers with the rules of another jurisdiction with regard to some OTC derivatives (OSC Rule 91-507 - Trade Repositories and Derivatives Data Reporting, section 26(5)).

International standards

What role does international standard-setting play in the rules and standards implemented in your jurisdiction?

The FI regulators and several securities regulators actively participate in international standard-setting organisations. For example, OSFI is a member of the Basel Committee on Banking and Supervision (BCBS); the Bank of Canada is member of the Financial Stability Board, an international body that promotes international financial stability.

Securities regulators in Ontario, Quebec, British Columbia and Alberta are members of the International Organization of Securities Commissions (IOSCO), a multilateral organisation that develops and promotes adherence to internationally recognised standards for securities regulation.

Recently, the Global Financial Innovation Network (GFIN) was established and its membership includes the OSC, the AMF, the BCSC, and the ASC. It is a network of 29 regulators, which aims to create a new framework for cooperation between financial services regulators on innovation-related topics, sharing different experiences and approaches. Starting with a pilot phase in 2019, GFIN will create an environment that allows firms to simultaneously trial and scale new technologies in multiple jurisdictions, gaining real-time insight into how a product or service might operate in the market.

While the agreements reached by these international organisations do not have legislative force, the FI regulators and securities regulators may implement agreed-upon standards by promulgating rules and proposing their adoption to legislative authorities. Such agreements usually also provide for the sharing of investigative and enforcement information.