U.S. Regulatory Sanctions Now Consider Victims’ Vulnerability

The U.S. Financial Industry Regulatory Authority (FINRA) has revised the National Adjudicatory Council (NAC) sanction guidelines it utilizes to include “a new principal consideration that contemplates coverage for financial exploitation of vulnerable individuals or individuals with diminished capacity.”

The guidelines have also been updated to include three new sections pertaining to systemic supervisory failures, borrowing and lending arrangements and short interest reporting. 

The guidelines do not impose fixed sanctions for individual violations. Instead, their purpose is to aid hearing panels and the NAC in levying appropriate sanctions consistently and fairly in disciplinary proceedings.

This growing focus on elderly and vulnerable individuals is reflected in the CSA’s recent attention to same, and is something to be attuned to on this side of the border.

Greater Cybersecurity Co-operation Recommended by the CSA

In a report recently issued by the Canadian Securities Administrators (CSA), the CSA suggests that Canada’s securities industry needs to develop more formal mechanisms for sharing information in the event of a disruptive attack. The report outlines the results of a cybersecurity roundtable where participants indicated that the industry’s individual response plans (IRPs) “are generally quite detailed and complete” but that the plans need to “address co-ordination and information sharing with other stakeholders, particularly in the context of a potentially market-wide cybersecurity incident.”

The CSA’s report stresses that firms ought to have internal controls and processes for reporting security breaches, and that the regulators also expect that registrants continue to remain vigilant in their approach to cybersecurity management.

New Procedural Rules and Guidelines Proposed by the OSC

The Ontario Securities Commission (OSC) has proposed a new set of procedural rules and guidelines that aim to aid unrepresented respondents in an OSC hearing participate in the proceedings. The proposals have been simplified to include fairness and accessibility for a broad range of respondents and also incorporate recent guidelines on electronic submissions, the use and disclosure of personal information, and case-management timelines for enforcement proceedings.

The proposals are being published with a 60-day comment period ending June 19.