Strategic Goal #1 – Innovate

Innovate

 

We support Member innovation that increases efficiencies and/or expands investor choice, while at the same time, meets regulatory requirements.

We will support innovation by:

  • Encouraging Members who intend to implement new technology to proactively collaborate with us
  • Understanding the risks and benefits related to new products, services and technology
  • Assessing our regulatory requirements to ensure they are relevant and applicable to new business models and emerging technologies

Key initiatives include:

  • Engaging in an “Innovation Outreach” plan to encourage discussion and collaboration on the use of new products, services and technology
  • Developing a Cybersecurity Plan to identify risks within the membership and provide information and guidance about threats, breaches and best practices
  • Modernizing Rules to reflect technological innovations and changes to Member operations

The Canadian capital markets are constantly evolving and innovating through the introduction of new product offerings, services and business models. Technology is playing an increasingly important role in delivering financial products and services to investors. Members are assessing and adopting new and evolving technologies to meet their business needs and support their strategies at a greater pace. However, innovation and adoption of technologies must be accomplished in a manner that continues to protect the investor and addresses risks.

We have a role to play in ensuring that innovation and new technologies are adopted in a manner that meets regulatory requirements and protects investors.

We will provide guidance and assistance to Members so they can be better prepared to deal with the opportunities, challenges and risks that result from innovation and use of technology, so that investors are safeguarded and confidence in financial markets is maintained.

We believe our regulatory requirements and approach should not create unnecessary barriers to innovation. We will assess our regulatory requirements to determine whether there are any that unnecessarily impede innovation as well as to consider whether there are areas where new standards might be required. We will enhance our proactive approach of providing assistance and communicating learnings to allow Members to dialogue around new business initiatives.

We expect the Canadian capital markets to be dynamic with new product offerings, services and business models in the coming years and Members will continue to face operating and competitive pressures. The success of those initiatives may have significant implications for Canadian retail investors, particularly, for smaller investors whose financial advice options may become limited. Small dealers are an important component of the MFDA membership and provide investors with choice especially in smaller regional markets that may not attract larger firms. Accordingly, the MFDA’s challenge will be to respond to investor needs while supporting a healthy and diverse membership. In addressing regulatory issues, we must continue to look for solutions that achieve the objective while avoiding undue regulatory costs.

We will contribute our expertise and unique understanding of the mutual fund distribution channel to help make informed decisions to ensure that the Canadian capital markets are regulated in an effective and efficient manner that protects the investing public.

Outcomes

The outcomes of understanding and supporting innovation will be:

  • Accommodate evolving business models and new technology. Our regulatory practices, operations and requirements address our regulatory objectives and take into account new product offerings, services and business models that support Member business needs and strategies.
  • Improve protection and resilience of Members’ technology and systems. Members have robust systems and policies and procedures to address cybersecurity and outage risks.
  • Support broad access to financial advice for Canadian retail investors. Canadian retail investors continue to have broad access to financial advice through traditional channels as well as evolving technology based platforms.

Strategies

Assess, monitor and communicate with Members concerning cybersecurity
We will continue to enhance our understanding of Member cybersecurity practices to identify areas for improvement and provide recommendations to address cybersecurity risks. We will monitor Member cybersecurity capabilities and provide meaningful feedback to Members on their preparedness to address those risks and provide them with recommendations for improvements where weaknesses are identified on an ongoing basis.

Create a proactive environment for Members to dialogue around new initiatives
We will dialogue with Members regarding any new products, services and technology. We will provide input and guidance to assist Members in implementing new initiatives in a regulatory compliant manner.

Assess MFDA’s regulatory requirements and approach to ensure they are relevant and applicable to new innovations
We will review MFDA regulatory requirements to identify any that unnecessarily create barriers to innovation. We will also assess whether new standards or approaches are required to protect investors.