Watchdogs vow flexible responses in outbreak
• Canadian financial regulators and trading authorities are taking steps to prevent a major disruption if the novel coronavirus outbreak develops into a pandemic.
On Tuesday, the Investment Industry Regulatory Organization of Canada (IIROC), which regulates investment dealers on matters such as registration, trading compliance and maintaining adequate capital, told member firms it would make some allowances in how they went about meeting their regulatory obligations as a result of COVID-19.
“IIROC recognizes that some level of regulatory flexibility may be required to enable Members ( investment dealers) to best serve investors and maintain market stability,” the guidance said.
“If Members ( firms) are able to meet the requirements from backup sites or with staff working from home, IIROC has no objection as long as appropriate measures are in place for supervisory, confidentiality and other regulatory requirements.”
As part of the guidance, IIROC also suggested that firms consider obtaining “dedicated or premium broadband service for the homes of critically important employees” in order to navigate potential work- athome scenarios.
In an earlier message on its website, IIROC had said that to protect its employees it would conduct examinations of its members remotely, where possible. It would also allow certain committee meetings to be conducted by video or teleconference instead of in person.
“In the event of a major disruption, IIROC has detailed business continuity plans ( BCPS) in place for each regulatory area of the organization, to preserve critical functions and activities,” the regulator said, noting that while it had already invoked elements of that plan, “we continue to carry out all our market oversight responsibilities.”
Meanwhile, e xchange operator TMX Group says there are contingency plans in place should there be disruption to its trading operations, including the clearing and settlement of securities trades.
The owner of the Toronto Stock Exchange, the Montreal Exchange and the Canadian Derivatives Clearing Corp., said its business continuity plans are written to support “all hazards” including a “reduction in staff due to illness.”
The plans are “subject to regular and rigorous testing and we are confident in our ability to operate and service our marketplaces without interruption,” the note to clients said.
Catherine Kee, a spokesperson for TMX Group, said clearing and settlement operations are split between provinces, and noted that there are “additional dedicated BCP (business continuity plan) seats for each location as well” if needed.