Canada to Centralize Broker Records

Securities regulators in Canada, often hampered by disparate provincial regulation, are turning toward technology to track the countrys brokers and advisers.The Canadian Securities Administrators (CSA) agreed at a meeting in February to start work on a national database carrying the employment and disciplinary records of all brokers and financial advisers. The CSA is comprised of the heads of 12 provincial

Securities regulators in Canada, often hampered by disparate provincial regulation, are turning toward technology to track the countrys brokers and advisers.

The Canadian Securities Administrators (CSA) agreed at a meeting in February to start work on a national database carrying the employment and disciplinary records of all brokers and financial advisers. The CSA is comprised of the heads of 12 provincial and territorial regulators. The regulators would like the CRD-type system in place by mid-2000.

We are concerned that by not having this information currently centralized among jurisdictions, there is too much of an opportunity for the occasional unscrupulous person to slip through the cracks, says Douglas Hyndman, chairman of the British Columbia Securities Commission.

Under the plan, information compiled from employment records--Form 4 and the Uniform Record of Termination--will be entered in the database. The Internet-based system will enable regulators and investors to check on the registration and disciplinary history of reps and advisers.

Who will build and maintain the system has not been decided. However, it will likely be the Ontario Securities Commission or the Investment Dealers Association of Canada.

As you had in the U.S., there are still a few issues to work out, Hyndman says. For example, we need to decide what information should be made available exclusively to regulators and what information can be made public. We realize there may be some legal issues there.

Hyndman adds that the CSA is considering whether to include information about independent planners. The advent of Internet investing has meant that many Canadians take advice from independent planners and then execute their own transactions. We intend to examine whether independent planners should be included in the mix, he says.

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