The British Columbia Securities Commission (BCSC) has published its 2024 Annual Compliance Report Card (the Report Card), which details the know-your-client (KYC) deficiencies of BC investment firms that underwent compliance reviews.
The Report Card notes that the regulator conducted 19 compliance reviews and found 130 deficiencies, with an average of 6.84 deficiencies per review. Of the registrants reviewed, KYC and suitability deficiencies were most common, followed by deficiencies in policies and procedures, conflicts of interest, disclosure, and client statements and reporting. Together, these deficiencies represented approximately 72% of all compliance deficiencies reported in 2024.
Some deficiencies were significant failures of compliance that led the BCSC to impose terms and conditions on registration, such as requiring the hiring of a compliance monitor to prevent new clients from being onboarded until the failures have been corrected.
The regulator took compliance action against two dealer firms, one of which was suspended, and the other voluntarily terminated its registration. In addition, four firms with systemic failures or cultures of compliance that fell significantly short of expectations were referred to the BCSC’s Enforcement Division for further investigation.
The reviews also found an increasing number of deficiencies in annual financial statement submissions. Failure to deliver this information within 90 days of their annual year-end is often an indicator of other compliance issues that can result in a broader review of a firm.
In 2024, the BCSC reached settlements with several firms and individuals, including those who failed to respond to conflicts of interest, as well as those who fell short of KYC requirements.
The BCSC is the principal regulator for approximately 174 advisor and dealer firms.
The 2024 Annual Compliance Report Card is available for download from the website of the British Columbia Securities Commission.
For more information, please call Barbara Hendrickson at BAX Securities Law (647) 403-4606.
This publication is not intended to constitute legal advice. No one should act on it or refrain from acting on it without consulting with a lawyer. BAX does not warrant or guarantee the accuracy or currency or completeness of the publication. No part of this publication may be reproduced without the prior written permission of BAX Securities Law.