The Canadian Securities Administrators (CSA) issued a notice to guide registered firms when a securities regulator or other authority requires them to engage a compliance consultant or compliance monitor. The CSA says the notice is expected to apply to a small number of firms in any given year.
It adds that firms may be required to hire a consultant as a result of regulatory action by CSA staff, a director’s decision or by order of a regulator if a compliance review or enforcement investigation identifies significant non-compliance with securities law.
The notice is written to help firms identify, evaluate and engage appropriate consultants, provide transparency regarding the CSA’s process and criteria for approving or accepting a proposed consultant, to inform consultants and firms about the CSA’s expectations regarding a consultant’s engagement, role and reporting activities and to improve oversight and remediation processes for those firms that are subject to a regulatory decision.
The paper outlines who can be a consultant, their role, the CSA’s typical criteria for approving or accepting a consultant, the due diligence firms must conduct when choosing a consultant and examines the reporting regulators expect from hired consultants.