OSC backs off on attempt to block critical IDA report


Thursday, January 13, 2005

The Ontario Securities Commission has given up its attempts to block the release of an internal report that contains stinging criticisms of the Investment Dealers Association of Canada, a national self-regulatory organization for the brokerage industry.

The OSC, which completed the review four years ago, following a comprehensive audit of the IDA, officially dropped its court challenge late last month.

The report paints a picture of an organization adrift, plagued by low employee morale, a logjam of enforcement cases, and policies that were either vague or non-existent.

"It is staff's view that there is a need for significant improvement in the IDA's corporate governance and organizational structure and in the enforcement department," the OSC said in its assessment of the association.

Joseph Oliver, the IDA's president, said the organization has addressed the OSC's concerns, added staff and resources, and created new performance benchmarks.

"We took immediate action to address the deficiencies noted in the report," he said, adding that the problems mentioned in the July, 2000, report date back six or seven years.

The OSC was reluctant to divulge the contents of its audit because they would be potentially embarrassing for the IDA and could harm the relationship between the two regulators.

Eric Pelletier, a spokesman for the OSC, said the securities watchdog decided to withdraw its challenge because of the strain on time and resources. Given the interest in the matter, he added that the OSC plans to publish the results of similar reviews in the future.