On September 12, 2017, the Financial Consumer Agency of Canada (FCAC) and the Investment Industry Regulatory Organization of Canada (IIROC), two otherwise independent regulators, announced that they signed a memorandum of understanding (MOU) to coordinate regulatory oversight and strengthen consumer/investor protection. We have made inquiries and have learned that the MOU is not publicly available; we have therefore not been able to review its provisions.

Both regulators protect the interests of financial consumers, however, their mandates and jurisdictions are different. IIROC is a national self-regulatory organization that oversees provincially regulated investment dealers. The FCAC is the federal financial institutions consumer protection regulator and is mandated to supervise federally regulated financial institutions’ compliance with consumer protection measures.

According to the press releases regarding the MOU, it will enable the FCAC and IIROC to exchange pertinent information and improve regulatory oversight capacity. This collaboration will increase detection of wrongdoings and subsequent regulatory responses. Lucie Tedesco, Commissioner at FCAC expects that the MOU will keep “[FCAC] in pace with emerging trends and issues” and reinforce consumer protection.

This MOU may have been entered into in connection with an ongoing investigation of bank practices that was commenced in the Spring of this year following reports related to allegations that certain employees of banks were pressured to upsell to consumers and meet unrealistic sales targets. 

Under its governing legislation, the FCAC is permitted to share information with other agencies that supervise financial institutions, if the FCAC is satisfied that the information will be treated as confidential by the agency.   IIROC’s by-laws provide for exchange of information agreements, but do not include a requirement that IIROC be satisfied that the information will be treated as confidential.