“The new SRO must be flexible and able to adapt to the development of markets and financial services. It must reflect good practice in regulation and governance. and it has to create trust in everyone involved, ”said the MFDA.
To support this goal, the document defined a number of guiding principles and objectives, including:
- Strengthening the accountability and governance of SROs;
- Reducing regulatory burdens and complexity, including reducing costs, increasing efficiency, promoting innovation and flexibility in business models;
- Harmonize and modernize regulation across Canada; and
- Strengthening public confidence and regulation
For public confidence in the new SRO, the MFDA does not need to be just a federated combination of the two current self-regulators in Canada. Instead, the new organization must be created “with a new culture and a new strategic regulatory partnership between CSA, industry and the public”.
The effectiveness of the new SRO, added the MFDA, will be better assured by building it from the ground up rather than trying to put together different experiences, cultures, processes and expectations. At the same time, efforts must be made to retain qualified and experienced personnel from the current SRO through continuous dialogue, transparency and commitment in the course of the new SRO design.
“The overall goal is to get the change right, and while it must be recognized that perfection is unattainable, strategic direction must protect against unnecessary sacrifice for convenience,” the MFDA said.