The Evolution of Regulatory
Oversight in the Public Interest
Jim Hall
Superintendent of Financial Institutions, Insurance and
Real Estate and Registrar of Credit Unions
Saskatchewan Financial Services Commission
Presentation to the Financial Management Institute
Public Sector Management Workshop
on June 2, 2009 in Regina, SK
1
The Evolution of Regulatory Oversight in the
Public Interest
Overview
• Background
▫ Serving the public interest
▫ Some principles to consider
• Government as Regulator of Financial Services
• Evolution of Delivery
▫
▫
▫
▫
Commissions
Professions
Industry associations
Self regulatory organizations (SROs)
• Alternative Model
▫ Special Operating Authority (SOA)
• Questions/Discussion
2
Background
▫ Regulation is a key component of government policy
▫ Regulatory approaches have adapted to the changing
environment
▫ Stakeholders have increasingly sought:
▫
▫
▫
▫
▫
▫
▫
Greater transparency and more extensive consultation
More accountability and effectiveness
Principles instead of prescriptions
Reduction in regulatory burden
Harmonization
Lighter regulation
Deregulation
3
Serving the public interest
▫ The primary objective of regulation of financial
services is protection of consumers (or an effective
marketplace)
▫ This objective has been carried out by licensing of
financial institutions and intermediaries, investigating
consumer complaints and enforcing the rules against
outliers (those in breach)
▫ The requirements are usually rules based –
prescriptive in nature
4
Some principles to consider
Principles vary depending on role but generally include:
▫ Appropriate whenever it is the most efficient means of
realizing the public interest.
▫ Regulatory institutions need independence.
▫ Regulatory institutions need clear mandate, clear
assignment of duties for general policy-making,
implementation and adjudication, and judicial
oversight.
▫ Regulatory instruments should align incentives of
service providers with the public interest.
▫ Must be supported by effective enforcement tools,
complaint and dispute resolution mechanisms.
▫ Effectiveness of regulation needs periodic evaluation.
* These principles were adapted from a consumer groups’ submission to a CRTC review
regarding Bell Canada and Telus (date unknown).
5
Government as regulator of financial
services
▫ Usually in Justice or Finance Ministry
▫ Sometimes a government controlled commission or
board
▫ Delegation to a council or commission with some
government appointees
▫ Grant of powers to an Self Regulatory Organization
(SRO)
▫ Recognition of an industry association standards
6
Government as regulator of financial
services
▫ Governments have outsourced some regulation of
financial services:
▫ to reduce expenditures
▫ in response to stakeholder demands for more flexibility in
regulation
▫ pressures from globalization of markets
7
Government as regulator of financial
services
8
Evolution of delivery of regulatory oversight
▫
▫
▫
▫
▫
▫
▫
▫
▫
▫
Consumer Protection Branch
Saskatchewan Securities Commission
Insurance Councils of Saskatchewan
Credit Union Deposit Guarantee Corporation
Saskatchewan Real Estate Commission
Investment Dealers Association
Mutual Fund Dealers Association
OBSI, CHLIO and GIO
AMF-FSCO complaint monitoring system
Saskatchewan Financial Services Commission
9
Special Operating Authority
(SOA)
• Saskatchewan Financial Services
Commission – an alternative model July/09
▫
▫
▫
▫
▫
▫
▫
Formation
Mandate
Composition
Special Operating Authority – why now?
Budget
Staffing
Relationship with Justice Ministry
10
The Evolution of Regulatory Oversight in the
Public Interest
• Questions/discussion
• Thank you for this opportunity to speak to you.
11