On March 5, 2025, the Ontario Securities Commission (OSC) announced a significant regulatory shift by delegating its registration-related powers and duties to the Canadian Investment Regulatory Organization (CIRO), effective April 1, 2025.
This delegation marks a crucial step in consolidating and streamlining the oversight of investment dealers, mutual fund dealers, exempt market dealers, and futures commission merchants (including individuals acting on behalf of these entities). The delegation is intended as a realignment to enhance efficiency, reduce bureaucratic delays, and maintain strong investor protections consistent with the OSC’s broader mandate to ensure the markets remain robust and protected.
Legislative Framework and Oversight
The delegation of these regulatory responsibilities to CIRO is grounded in key legislative provisions, including the Securities Act, Commodity Futures Act, and National Instrument 31-103 – Registration Requirements, Exemptions, and Ongoing Registrant Obligations. That said, while CIRO will oversee day-to-day registration and regulatory functions, the OSC retains concurrent authority to intervene where necessary, retaining paramount jurisdiction in cases of conflicting regulatory interpretation. It will also maintain a risk-based oversight framework to monitor CIRO’s effectiveness in fulfilling its regulatory mandate.
On a technical level, the OSC decision to delegate registration functions to CIRO revokes the prior assignment of such to the Investment Industry Regulatory Organization of Canada (IIROC), reinforcing CIRO’s role as the singular self-regulatory organization (SRO) for investment market participants in Canada.
Background on CIRO and Its Role
CIRO was established on January 1, 2023, through the merger of IIROC and the Mutual Fund Dealers Association of Canada (MFDA). The unification aimed to create a single, more efficient regulatory body that enhances investor protection while reducing regulatory redundancies. CIRO’s role includes ensuring fair market practices, enforcing compliance with industry regulations, and upholding the integrity of Canada’s investment sector.
Conclusion
The OSC’s delegation of registration-related functions to CIRO marks a significant step, consolidating responsibilities under a single self-regulatory organization further to enhancing regulatory efficiency and standards of compliance for the benefit of investors and market participants. With the implementation of this framework on April 1, 2025, CIRO will take on a more integral role in overseeing Canada’s investment landscape while operating under the OSC’s watchful oversight. Should you have any questions about these regulatory changes, a member of our Business Law Group would be more than happy to discuss with you.