Write a minimum 1200 words research paper on the financial services regulations in Canada.

Your paper should identify the regulation, provide high level overview of the regulation, its application to
various institutions, and how it supports the overall health of the Canadian financial system.

Describe in detail. the implication of this regulations on Fintech activity and provide your thoughts on the
regulation assuming you are a fintech entrepreneur.

Government has numerous regulators in place to oversee financial markets and companies.
These regulators have dissimilar roles and responsibilities, enabling them to work
independently even though their functions overlap.
In Canada supervisory and regulatory function is divided into organizations which are under
federal government, provincial governments, and national self-regulatory organizations.
Federal regulatory bodies
In the Federal Government the Financial Institutional Supervisory Committee (FISC) acts as
the main coordinating body that sets regulatory policy and supervises the financial
institutions consists of four government agencies-
1) the Office of the Superintendent of Financial Institutions (OSFI)
2) the Bank of Canada (BoC)
3) the Canada Deposit Insurance Corporation (CDIC)
4) the Financial Consumer Agency of Canada (FCAC)
& Department of Finance
Department of Finance
Manages federal borrowing on financial markets,developes policy for financial sector and
legislation, it also represents Canada in various international financial institutions and
groups.

Office of the Superintendent of Financial Institutions (OSFI)

They overlook all government banks and domestic banks, foreign banks in Canada, trust and
loan organizations, cooperative credit companies, life insurance companies. and property
and casualty insurance companies; sets limits on the ability of Canadian banks to leverage
their capital; sets target capital ratios that are higher than the international standard.
Bank of Canada (BoC)
Primarily responsible for conducting monetary policy by setting interest-rate targets and
adjusting credit supply; serves as the key component in the payments system by providing a
check-clearing function; serves as the traditional lender of last resort; provides liquidity to
the financial system, gives policy advice to the federal government on the design and
development of the system, oversees major clearing and settlement systems, and provides
banking services to these systems and their participants; conducts ongoing research into
issues related to the financial system’s stability and efficiency.
Canada Deposit Insurance Corporation (CDIC)
promotes and contributes to the financial system’s stability by providing deposit insurance
against the loss of eligible deposits at member institutions in the event of failure and acting
for the benefit of depositors while minimizing loss.
Financial Consumer Agency of Canada (FCAC)
ensures that federally regulated financial entities comply with consumer protection
measures, promotes financial education, and raises consumers’ awareness of their rights
and responsibilities.

Provincial and territorial regulators

Provincial and territorial regulators administer and enforce rules around how securities are
issued, bought and sold and set minimum entry standards for market intermediaries who
deal with investors.

They also regulate marketplaces and clearing agencies, oversee the Investment Industry
Regulatory Organization of Canada (IIROC) and the Mutual Fund Dealers Association of
Canada (MFDA), approve individuals and firms for registration based on proficiency and
educational requirements and discipline them if needed. They work together to coordinate
and harmonize the regulation of Canadian capital markets through the Canadian Securities
Administrators (CSA).

Every province and territory has one or more bodies that regulate financial institutions
under provincial responsibility:

Alberta

 Treasury Board and Finance

 Alberta Securities Commission

British Columbia

 Financial Institutions Commission

 British Columbia Securities Commission
Manitoba

 Financial Institutions Regulation Branch

 Manitoba Securities Commission

New Brunswick

 Financial and Consumer Services Commission

Newfoundland and Labrador

 Consumer and Commercial Affairs Branch

 Securities Commission of Newfoundland and Labrador

Northwest Territories

 Office of the Superintendent of Insurance

 Northwest Territories Securities Office

Nova Scotia

 Financial Services Division

 Nova Scotia Securities Commission

Nunavut

 Government of Nunavut
 Nunavut Office of the Superintendent of Securities

Ontario

 Financial Services Commission of Ontario

 Ontario Securities Commission

Prince Edward Island

 Consumer, Labour and Financial Services Division

 Prince Edward Island Office of the Superintendent of Securities

Quebec
  Autorité des marchés financiers

Saskatchewan

 Financial and Consumer Affairs Authority

Yukon

 Government of Yukon
 Office of the Yukon Superintendent of Securities

Self-regulatory organizations (SROs)

SROs regulate their members’ standards of practice and business conduct to promote
investor protection. The country has two main SROs:

 IIROC: sets and enforces rules for investment dealers and equity markets, monitors
trading on those marketplaces, approves training courses, and disciplines member
firms and individuals
 For more information on IIROC, check out the following articles:
 The IIROC rules industry players need to know about
 Why IIROC matters to investors
 MFDA: regulates the operations, standards of practice and business conduct of
mutual fund dealers, and disciplines member firms and individuals

In Quebec, the Montreal Exchange is also considered an SRO. It is the only financial
derivatives exchange in Canada, currently listing equity options, options on ETFs, currency
options, index derivatives, and interest-rate derivatives.

All of the above Canadian financial regulators seek to protect those who participate in the
industries they govern. Their policies may vary, but their areas of coverage often overlap.
While most people will never deal directly with these regulators, learning about them is
essential as they will affect their lives at some point.

Other financial regulatory organizations

1)The Federal Reserve Board

It is best well-known regulatory body responsible for stimulating the economy. Its tools are
implementing monetary policies, and it is also responsible for infusing money, liquidity and
overall credit conditions.

2)Office of the comptroller of the Currency

It is a federal agency that supervises and regulators for efficiency of banking operations.

3)Office of thrift supervision

It was established by the department of treasury. It is similar to the office of the comptroller
of currency. Except it has regulated federal savings association.

4)Commodity Trading futures commission

It’s a regulatory body for commodity markets and protects it from market manipulation.

5) Financial industry regulatory Authority

It’s a self regulatory organisation created after security exchange act 1934.It overseas all
firms that are in securities business with the public.

6)State Bank regulators

These are similar to OCC but operate level for state charter banks.

7)State Insurance regulators

This agency regulates state level insurance regulations.

8)State securities regulators

This agency looks at securities and agencies at state level

9)Securities and exchange commission

The U.S. Securities and Exchange Commission (SEC) is an independent federal government
regulatory agency responsible for protecting investors, maintaining fair and orderly
functioning of the securities markets, and facilitating capital formation. It was created by
Congress in 1934 as the first federal regulator of the securities markets. The SEC promotes
full public disclosure, protects investors against fraudulent and manipulative practices in the
market, and monitors corporate takeover actions in the United States. It also approves
registration statements for bookrunners among underwriting firms.1
Generally, issues of securities offered in interstate commerce, through the mail or on the
Internet, must be registered with the SEC before they can be sold to investors. Financial
services firms—such as broker-dealers, advisory firms and asset managers, as well as their
professional representatives—must also register with the SEC to conduct business. In
example: they would be responsible for approving any formal bitcoin exchange.
Regulations by federal oversight bodies
Office of superintendent of financial organization
The Office of the Superintendent of Financial Institutions (OSFI) is an independent agency of
the Government of Canada. The agency is responsible for the supervision and regulation of
banks, insurance companies, and trust and loan companies. They also regulate private
pension plans which are subject to federal oversight. The agency's stated goals are to
protect depositors, policyholders, the financial institution (FI), creditors and pension plan
members while allowing financial institutions to compete and take reasonable risks.
Duties and Responsibilities of the OSFI
The OSFI is designed to maintain consumer confidence in the financial markets. To
accomplish this goal it guarantees the deposits through the Canadian Deposit Insurance
Corporation (CDIC), reviews the pension plans of businesses to ensure that they are
adequately funded and helps mitigate the impact of financial issues that may occur. The
OSFI is bound to advance and administer a regulatory framework that promotes adopting
policies and procedures that are set up for the management of risk. The OSFI is also tasked
with monitoring and evaluating system-wide or sectoral issues that may impact institutions
negatively.
The OSFI supervises institutions and pension plans to make sure they are financially in good
shape. The agency provides oversight that the plans meet the minimum funding
requirements and are abiding by their governing laws and supervisory requirements.
The OSFI is expected to provide quick guidance to financial institutions and pension plans if
there are financial deficiencies. The office may mandate that management, boards or plan
administrators take action to fix identified problems, or, in some cases, take necessary
corrective action itself.
Operating as an independent unit within the OSFI is the Office of the Chief Actuary. This
office provides a series of actuarial valuation and advisory services to the Government of
Canada.

References
https://www.investopedia.com/terms/o/office-of-the-superintendent-of-financial-
institutions-osfi.asp
https://www.wealthprofessional.ca/your-practice/practice-management/everything-you-
need-to-know-about-canadian-financial-regulators/266464
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