Comments Invited for Proposed Compliance Framework and Publishing Principles for FCAC Decisions

The Financial Consumer Agency of Canada (FCAC) is seeking comments and feedback on its Proposed Supervision Framework and Publishing Principles for FCAC Decisions. The Proposed Supervision Framework revises FCAC's existing Compliance Framework, which was last updated in 2011, with a view to providing a high degree of transparency into how FCAC supervises and monitors federally regulated financial institution, external complaints bodies, and payment card network operators. The Publishing Principles for FCAC Decisions aim to clarify how FCAC will publish information about Notices of Violation, Notices of Decision, and Notices of Non-Compliance.

All submissions must be received by November 14, 2016.

What You Need To Know

Proposed Supervision Framework

  • FCAC takes a risk-based approach to supervision and classifies entities as either tier 1 or tier 2. This classification guides the nature and intensity of FCAC's supervisory interactions. Level 1 entities are considered to present a higher risk of breaching market conduct obligations because of the nature of their business models.

  • Level 1 entities are assigned a senior officer and undergo a cycle of proactive supervision, which includes the development of Market Conduct Profiles to determine the intensity of supervision. They include entities offering retails products and services to consumers, entities whose participants offer payment services to merchants, and entities that offer dispute resolution services to member banks.

  • Level 2 entities are monitored less intensely and are not typically assigned a senior officer. These entities are considered to present a lower risk of non-compliance with market conduct obligations, and include entities not offering retail products or services, and entities whose business is restricted to the sale of insurance products or services.

Publishing Principles

  • The Commissioner is given discretion under the FCAC Act to make public the name of a regulated entity that has committed a violation. The Publishing Principles provide that the Commissioner will exercise this discretion on a case-by-case basis. If the Commissioner decides to make public the name of a regulated entity that has committed a violation, FCAC will publish the final copy of the Notice of Violation or Notice of Decision, including the facts of the violation. The Commissioner may issue a press release.

  • FCAC will always make public the nature of a violation and the administrative monetary penalty involved, even when the violator is not publicly named.

  • If a regulated entity has breached its obligations under a voluntary code of conduct or public commitment and FCAC has issued Notice of Non-Compliance, FCAC will publish anonymous information about the non-adherence, including the facts of the case.

To discuss these issues, please contact the author(s).

This publication is a general discussion of certain legal and related developments and should not be relied upon as legal advice. If you require legal advice, we would be pleased to discuss the issues in this publication with you, in the context of your particular circumstances.

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