Investors Scrutinizing the Regulators

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Securities Regulation In CanadA

Fox Guarding the Hen House



IDA boss stakes job on improving performance


Derek DeCloet

Financial Post


June 19, 2001

LA MALBAIE, QUE. -Joe Oliver, president and chief executive of the Investment Dealers Association of Canada, says he will stake his job on the body becoming a more effective regulator of the brokerage industry.

"I would say I have to, Mr. Oliver told the Financial Post after the IDA's annual meeting in eastern Quebec. "Il n'y a pas de choix."

The IDA has come under scrutiny from provincial securities regulators for lax and slow enforcement of its members. In many cases, investors who feel their accounts have been mishandled by brokers must wait several years before their complaints are resolved.

"At the end of the day, if a year from now we have a backlog that is getting longer, then we will not have fulfilled our responsibilities and we will not have responded adequately," said Mr. Oliver.

"You'll be able to judge us on how effectively we've dealt with backlog issues. I think we've improved it a lot but we still have a ways to go."

The IDA would soon announce a new director of enforcement, he said. Paul Bourque, a securities lawyer and former executive director of the B.C. Securities Commission, was recently hired to be the IDA's senior vice-president of member regulation.

Mr. Oliver said the delays at the IDA have been exacerbated by declining stock markets, and by the huge increase in the association's duties since it took over some regulatory responsibilities from the Toronto Stock Exchange in the mid-1990s.

The number of complaints filed with the IDA about brokerage firms has tripled in the past five years, to almost 1,200.

In a speech to members, Mr. Oliver defended the IDA's dual role as both watchdog and lobbyist for the securities industry.

"We safeguard the public interest-- and scrupulously avoid conflict of interest -- by rigorously separating our regulatory operations from other parts of the organization," he said. The lobbying arm's staff "do not interfere" in regulatory matters, he said -- "period."

Some provincial securities regulators would like to see the IDA split into two bodies, sources say -- one to regulate the industry, one to lobby on its behalf. But Mr. Oliver denied he is feeling any pressure to do so.

Mr. Oliver said competition between newspapers has focused attention on scandals and given the public an unbalanced view of the securities industry.

"People are apocalyptic about events which, while they are very serious, are narrow and focused," said Mr. Oliver. "I think sometimes there's a feeding frenzy which is out of proportion and which isn't balanced."

He cited last year's high closing scandal at RT Capital Management Inc. "People's investments were not imperilled," said Mr. Oliver.

William Packham, vice-chairman of Merrill Lynch Canada Inc., was elected the new chairman of the IDA. He, too, promised to improve the public perception of the securities industry through better regulation.

"If we can achieve this goal, I can assure you our public image will be dramatically improved," said Mr. Packham.