Banking in Canada Canada offers an efficient, welldeveloped and highly regulated banking system. Bank accounts are easily set up and there are no restrictions on accessing the accounts. The Canadian financial services industry includes chartered banks, trust companies, insurance companies, investment dealers, mutual fund companies and distributors, and finance and leasing companies. Numerous government agencies also offer financial services. Canadian capital markets Canada has a sophisticated securities exchange system that ranks among the major capital markets of the world. Equity securities are traded on three major exchanges, each with its own area of specialisation. Foreign investors can participate in Canada’s securities markets without restriction, subject to Investment Canada’s authority to regulate certain takeovers. In addition, there are no restrictions over foreign investors’ access to Canadian sources of finance.
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Regulation, supervision and consumer protection The Office of the Superintendent of Financial Institutions (OSFI) is the federal agency principally responsible for supervising all federally regulated financial institutions and pension plans. OSFI’s role is to safeguard policyholders, depositors and pension plan members from undue loss, and to advance and administer a regulatory framework that contributes to public confidence in a competitive financial system. The Financial Consumer Agency of Canada oversees regulation of all federally regulated financial institutions in respect of consumer protection. In addition, subject to certain exemptions, deposit-taking institutions are required to register with the Canada Deposit Insurance Corporation (CDIC) and to meet this body’s risk and control expectations. Deposits with CDIC registered institutions are insured up to C$100,000 per deposit. The insurance is funded through premiums determined by CDIC on a risk based scale and paid by the institution. Similar protection exists provincially and territorially for deposits of credit unions and caisses populaires.
The securities industry is regulated at the provincial and territorial level. Each province and territory has its own securities commission, which is responsible for the regulation of securities listing and trading activity in that province and territory. In addition, as a matter of selfpreservation, the exchanges provide a self-regulatory role as does the Investment Industry Regulatory Organization of Canada (IIROC). The selfregulatory organisations (SROs) jointly sponsor the Canadian Investor Protection Fund (CIPF), a trust fund that protects investors in the event of the insolvency of a member firm. The CIPF covers separate customer accounts, up to C$1 million per account, for losses that result only from the insolvency of a member. It does not cover customers’ losses that result from other causes such as changing market values of securities, unsuitable investments or the default of an issuer of securities. The mutual fund industry is also governed by provincial and territorial securities laws. There is also extensive self-regulation by the Mutual Fund Dealers Association of Canada.