Marketplaces, SROs, Clearing Agencies and Trade Repositories

The FCNB oversees the operation of marketplaces, self-regulatory organizations (SROs), clearing agencies, trade repositories and investor protection funds in New Brunswick. It promotes compliance with the requirements in securities legislation as well as with any related rules and policies.


This section provides information on how the FCNB oversees marketplaces, SROs, clearing agencies, trade repositories and investor protection funds including:


  • the recognition or approval of marketplaces, SROs, clearing agencies, trade repositories and investor protection funds
  • marketplaces, SROs, clearing agencies, trade repositories and investor protection funds operating in New Brunswick


Clearing Agencies


In securities trading, a clearing agency:

  • acts as an intermediary in paying funds, in delivering securities (or in doing both);
  • provides centralized facilities for clearing trades; or
  • provides centralized facilities as a depository of securities.

In derivatives trading, a clearing agency provides centralized facilities for clearing and settlement of trades in derivatives, and:

  • enables parties to substitute, through novation or otherwise, the credit of the clearing agency for the credit of the parties;
  • arranges or provides for the settlement or netting of obligations from the track; or
  • provides clearing services or arrangements that mutualize or transfer credit risk among participants.

The FCNB has issued the following documents related to clearing agencies:


Trade Repositories


 A trade repository is an entity that collects and maintains reports of trade of derivatives. The FCNB has issued the following documents related to trade repositories:




Compensation and contingency funds of a self-regulatory organization


The Securities Act provides FCNB with the power to enter into an agreement, memorandum of understanding or arrangement that relates to the compensation and contingency fund of a self-regulatory organization.

 

There are currently two investor protection funds recognized by FCNB:

 

Canadian Investor Protection Fund

 

The Canadian Investor Protection Fund (CIPF) is the only compensation fund approved by the Canadian Securities Administrators (CSA) for investment dealers regulated by the Investment Industry Regulatory Organization of Canada (IIROC). CIPF is funded by IIROC-regulated Dealer Members and all IIROC Dealer Members.

                                                                                                                                                                                                                         

CIPF’s role in the Canadian regulatory system is governed by the following agreements:

 

  • 30 September 2008: A Memorandum of Understanding (MOU) with the CSA that addresses the governance, funding and maintenance of CIPF as well as CIPF’s responsibilities for investor protection and reporting to the CSA. As provided for by securities laws and regulations in many Canadian provinces and territories, certain regulators, such as FCNB, have also issued Approval Orders regarding CIPF;

A Memorandum of Understanding (MOU) with the CSA
Approval Orders regarding CIPF


  • 28 November 2014: An Industry Agreement with IIROC that establishes the working relationship and respective responsibilities of CIPF and IIROC. Under this agreement, IIROC must provide prompt notice to CIPF of any situation that is likely to require a payment from the Fund

MFDA Investor Protection Corporation


The MFDA lnvestor Protection Corporation (MFDA IPC) was established on 14 November 2002, Its primary purpose is to provide protection to eligible clients of MFDA dealers if the clients' property held by their dealer is unavailable as a result of the insolvency of the dealer. The MFDA IPC provides coverage to customers of members of the MFDA for losses of property in customer accounts caused by the insolvency of a member. The MFDA IPC's objective is to return assets to customers or provide compensation for their value as at the date of the insolvency when the assets are not available from the insolvent member. Coverage of customer accounts commenced on 1 July 2005.

 

IPC’s role in the Canadian regulatory system is governed by individual approval orders at the jurisdictional level such as the following agreement:

 

14 May 2015, Approval Order In the Matter of the MFDA Investor Protection Corporation and In the Matter of the Mutual Fund Dealers Association of Canada


Approval Order

 

In this section:

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