7 November 2018 13:30
Patrick Déry | Photo : Denis Méthot
The financial sector is in turmoil, stresses Patrick Déry, superintendent of the supervision of solvency to thefinancial markets Authority. “The train has caught its momentum and we can’t stop it. It has therefore become imperative to conduct an upgrade legislation to take account of new realities and new expectations of the consumers “, he launched on Tuesday 6 November in Quebec city.
Patrick Déry was the keynote speaker at lunch in the framework of the 6th symposium Retirement, finance and investment, held jointly by the Cercle finance du Québec and CFA Quebec.
He made the point about the different projects that are undertaken by the Authority to give effect to the adoption of act 141 in June of last year. The Authority must give the industry clear guidelines that ensure the protection of consumers, but also allow for all stakeholders to “develop and flourish in an environment that is both dynamic and competitive,” he says.
An additional impetus to the market
The modernization of laws and regulations give “an additional impetus to the players in the market as well as additional protections for consumers,” says Dr. Déry.
“In general insurance, the new rules strengthen the supervision of the activities of brokerage, in order to ensure that consumers who choose a broker can be assured that they are dealing with a representative who is really in measure to shop for them the product that best meets their needs,” he says.
Advisory committee on the practice of representatives
The creation of another advisory committee, not foreseen in the draft law 141, key practice representatives. The composition of the committee was confirmed on the 19th of July last, and a first meeting took place in September. “We now have eight of these committees on subjects such as fintechs, the supervision of the derivatives and the mining sector, among others. Few regulators have created many platforms to establish a direct link between people and businesses and stay connected with the concerns of the industry. It fits in with our strategic priority to be a regulator of proximity, ” he says.
The concern of the Authority relating to the innovation is not limited to technological developments, ” he stressed. “It is also a concept that advocates that can very well integrate with our ways of acting and thinking. “
Distribution without a representative
Since the 10 October last, the Authority is conducting a consultation relating to the supervision of alternative modes of distribution of financial products and services, and more specifically the distribution of insurance via the Internet.
“We listen and observe a lot of what is done elsewhere. We draw from best practices implemented in other jurisdictions. But more importantly, the best way to arrive to design an effective framework that will meet the needs of the industry and consumers is to engage stakeholders in the process of developing regulations “, he said.
The consultation is for a period of 60 days. “We take the time needed to read and hear everything that is brought to our attention. Be certain that we will consider when we get to the drafting of the final versions of the regulations, ” he said. He stressed that the advisory committee on the practice of representatives will also be put to contribution in this exercise.
Like other regulators in canada, the Authority launched last June 21 a major consultation on the reforms focused on the customer in relation to the regulation 31-103, which deals with the obligations of registered persons. Other discussions have taken place relating to commissions integrated (regulation 81-408) and the registration regime in derivatives and the conduct of commercial actors in the sector.
“The development of a regulatory is very open to exchanges with the stakeholders of different sectors. We intend to continue along this path because the results are indeed convincing, ” said Patrick Déry, adding that it also allows the regulator to improve its delivery of service.
Enlargement of the compensation Fund
The coverage of the compensation Fund of the financial services has been expanded to better meet the expectations of consumers. “It is clear that the compensation Fund cannot guarantee preventing all the mishaps that can occur between a consumer and a representative. In this regard, we will have to probably manage expectations, ” he says.
Just a few days after the entry into force of the act 141, on July 19, 2018, the Authority has announced the creation of an advisory committee of consumers and users of financial products and services. It has called for nominations last September 12. The aim is to establish a link even more structured in between the consumers and share with them about the issues that are troubling, ” says Dr. Déry.
Visit the IMF’s
His colleague Frédéric Pérodeau, superintendent of the assistance to clients and the supervision of the distribution, was the speaker scheduled for the program, but he was conscripted to the office of the Authority. Inspectors from the international monetary Fund (IMF) are in Canada and conduct their audit every five years.
“Once every five years, we also spend under the microscope of the inspectors. It is a very good exercise for humility. For those here that have already been inspected by the Authority, tell you that there is a justice. We also receive the visit, and we need to show that we are good, ” he says, smiling.
The fact get a good grade is important to the regulator. “The good performance of the Authority in international evaluations indirectly confirms the good health of the institutions and markets that it regulates. Conversely, a poor rating by the IMF in respect of the Authority could undermine the public’s confidence in the institutions and the people that we work with “, he says.