Self-regulatory organizations

SROs are not part of the government. Rather, they are organizations that have been given the responsibility by provincial securities regulators to govern the operations and business conduct of certain players in the financial system, such as investmentInvestment An item of value you buy to get income or to grow in value.+ read full definition firms, in order to protect investors and the public from dishonest behaviour. In Ontario, SROs are recognized under the authority of the Securities Act (Ontario).

Some responsibilities of an SRO include:

• writing and enforcing its own rules to regulate the operations, standards and business conduct of its member firms and their representatives.
• enforcing their members’ compliance with rules and securities legislation.
• handling investor complaints.
• conducting reviews or investigations of its member firms to detect misconduct.
• taking appropriate disciplinary action against those who break the rules.

SROs operate under the authority and supervision of provincial and territorial regulators, operating together as the Canadian Securities Administrators.

Learn more about who’s who in Canadian markets and how regulators protect investors.

SROs in Ontario​

In Ontario, there are two recognized SROs:

1. Investment Industry Regulatory Organization of Canada (IIROC)Investment Industry Regulatory Organization of Canada (IIROC) National self-regulatory organization which oversees all investment dealers and trading activity on debt and equity marketplaces in Canada.+ read full definition is a national organization that oversees all investment dealerInvestment dealer A securities firm that buys and sells a wide range of investments. They are likely a member of the Investment Industry Regulatory Organization of Canada (IIROC).+ read full definition firms and trading activity on equityEquity Two meanings: 1. The part of investment you have paid for in cash. Example: you may have equity in a home or a business. 2. Investments in the stock market. Example: equity mutual funds.+ read full definition and debtDebt Money that you have borrowed. You must repay the loan, with interest, by a set date.+ read full definition marketplaces in Canada, like the Toronto Stock Exchange and TSX Venture Exchange. They have approximately 175 member firms and 28,000 registered representatives. For more information about IIROC, visit their website at http://www.iiroc.ca/.
2. Mutual FundMutual fund An investment that pools money from many people and invests it in a mix of investments such as stocks and bonds. A professional manager chooses investments that match the fund’s goals for risk and return. You can redeem your fund units at any time.+ read full definition Dealers Association of Canada (MFDA) is a national organization responsible for oversight of mutual fund dealers in Canada – firms that are authorized to primarily sell Canadian mutual funds. Its members are not allowed to sell any publically-traded stocks, such as those listed on the Toronto Stock ExchangeStock exchange A market in which securities are bought and sold.+ read full definition. The MFDA regulates nearly 100 mutual fund dealerMutual fund dealer A company that buys and sells the shares or units of mutual funds for investors.+ read full definition firms and 83,000 registered mutual fund salespeople across Canada. For more information about the MFDA visit their website at http://www.mfda.ca/.

Key point

In Ontario, there are two recognized SROs:

1. Investment Industry Regulatory Organization of Canada (IIROC)
2. Mutual Fund Dealers Association of Canada (MFDA)