Over the past several years I have often spoken about the rapidly changing and dynamic environment that we are all operating in, and the need for the MFDA to continue to be responsive to these changes.
Never more than now, with the world experiencing the seismic shifts resulting from the global COVID-19 pandemic, and with the increased level of stress being felt by investors and industry alike, has this been more pertinent. This year MFDA Members, along with the rest of the world, experienced rapid changes brought about by the impact of the global COVID-19 pandemic. Given the MFDA’s continued focus on being a responsive, responsible and effective regulator, we were able to quickly respond to these changes as already described in the message from the MFDA Chair. The MFDA was also able to directly and quickly address the challenges brought about by the impact of the March 2020 market decline through setting three budgetary goals for FY 2021 that sought to balance Member concerns with prudent fiscal management. These goals included reducing Member fees, preserving cash reserves and liquidity, and maintaining commitments to pension funding. All three of these goals were achieved in the FY 2021 budget which calls for $1.8 million less funding than the FY 2020 requirement and results in a 3% reduction in Member fees.
On the matter of regulatory structure of Canada’s capital markets, the COVID-19 pandemic has amplified the need for a robust regulatory system that preserves investors’ confidence in Canada’s capital markets and for a harmonized and modern regulatory structure that helps industry participants stay competitive. These needs are why the publication in February 2020 of the MFDA’s Special Report on Securities Industry Self-Regulation: A Proposal for a Modern SRO, which proposes constructive ideas to address these issues and challenges, was so timely.
The Special Report, which was published as part of the MFDA’s overall strategic planning, contains extensive research and policy analysis on the future role of the MFDA and SROs in Canada. The Special Report recommends the establishment of a single new SRO that provides real and needed change. This new SRO is specifically designed to enhance public confidence in the SRO system with more active and transparent participation by CSA regulators, and to provide for harmonization and reduced regulatory complexity and costs that will benefit all industry participants fairly. This new SRO can be built using a sensible phased approach which is timely and achievable, and which is constructed upon the positive building blocks of today’s SRO system. I am proud that the MFDA has been able to make a major contribution to the discussion regarding the future SRO structure in Canada, and I believe that the MFDA Special Report describes a model for a public interest and investor focused SRO that will benefit all of Canada.
As I reflect on our activities and all of our accomplishments during the past 12 months, as well as the significant challenges of the future, it is obvious that the MFDA could not successfully continue to serve its membership and Canadian investors if it were not for the dedication and engagement of MFDA Staff and the MFDA Board of Directors. I would like to thank you all for your dedication, continued support and guidance.
Mark T. Gordon, LL.B.
President & Chief Executive Officer