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Is Your Technology Ready for the SRO Merger?

New rules created by the recent self-regulatory organization (SRO) merger allow dual-registered dealers to create seamless client experiences through one regulatory entity. Firms that embrace the value this provides are well positioned to dominate in an increasingly competitive market by building lifetime relationships with clients across multiple channels.

The amalgamation of the Mutual Fund Dealers Association of Canada (MFDA) and the Investment Industry Regulatory Organization of Canada (IIROC) to form the Canadian Investment Regulatory Organization (CIRO) allows dual registered dealers to conduct business through one regulatory authority.

CIRO is designed to “make it easier for dealers and their advisors to serve Canadians, regardless of region, firm size or business model.” i

In order to benefit from the merger and deliver effective and efficient client interactions, having the right technology is essential. There are significant risks for financial firms – both large integrated institutions and independents alike – that are unprepared.  

This article provides key insights to help you assess your technical readiness and capacity to benefit from the new rules and strategic opportunities.

From Disruption to Opportunity

CIRO delivers a more flexible regulatory framework. This creates new opportunities to meet investors’ desire to access products and services of their choice, and on their terms. Clients are showing a growing preference for a tailored digital experience that seamlessly integrates advanced technology and intelligence. The newly integrated regulatory framework facilitates this, along with providing new opportunities for wealth managers to offer broader customized solutions that integrate innovative investment products and advice. This new world promises better product and service experiences for investors and lower operating costs for providers who use technology effectively.

Preparing for this however, requires a clear-eyed assessment of your organization’s readiness for change. “You need to ensure there is no misalignment in your operational infrastructure due to legacy systems or strategies,” says Donna Bristow, Chief Product Officer, Wealth at Broadridge. “Plus, you need to ensure your team is educated about the key issues.”

Transformation on Your Terms

Each firm will have their own unique journey, timeline, and strategy to assess and execute changes introduced by the SRO merger.

Specific opportunities will depend on your firm’s business model and objectives.

Potential opportunities
  • Consider how the MFDA model may be disrupted in the future.
  • Evolve technology to operate seamlessly in the event of future regulatory change.
IIROC/Dual registered
  • Identify growth opportunities by supporting different advisor licensing.
  • Evolve technology to pave the way for growth and scalability and optimize product and distribution opportunities.
Large integrated institution
  • Streamline to support multiple channels through one legal entity 
  • Understand “client-for-life” journeys and value propositions.
  • Evolve technology to support product innovation, breadth of service and required operation scale.

Stress-Test Your Tech Stack

How can you assess if your tech stack is SRO-ready?

“You need to think about your business, your approach, and how you engage with clients. As well as the operational efficiencies you wish to build in and the changes you need to make,” says Bristow. “This will enable you to identify gaps, risks, and areas of opportunity.”

It is important to:

  • Assess the integration of your systems, ensuring seamless data flow.
  • Identify gaps in compliance capabilities, ensuring accurate reporting and record-keeping in alignment with new CIRO reporting and record-keeping requirements.
  • Evaluate the scalability of your technology and infrastructure, enabling adaptivity to evolving regulations and future growth.
  • Level set on whether you have the right components to support your medium- to long-term business aspirations to support a unified client-centric experience.

Key Considerations

Is your technology scalable and flexible enough to adapt to evolving regulations and future growth?

Are your systems sufficiently integrated to allow a seamless data flow and efficient operations?

Are there gaps in your compliance processes that might cause issues in ensuring accurate reporting and record-keeping in alignment with new requirements?

Migrate Seamlessly

SRO integration is a significant undertaking that has be done in a logical, holistic manner. Navigating the complexities of SRO migration requires a careful evaluation of business considerations and priorities, and then pairing those with technological needs to capitalize on those opportunities.

“When your tech stack aligns with your business objectives, this is the sweet spot that will allow you to pursue scalable modernization thoughtfully and sustainably,” says Darren McNaughton, Vice President of Strategy at the global fintech leader, Broadridge.

Seven Key Steps to get SRO-Ready

There are seven key steps each company must take to ensure they are SRO ready, along with specific areas of focus within each of those steps:

  • Asset Capital Consumer Corporations Wealth
  • Operations Innovation and Execution
  • Technology Acceleration
  • Post trade finance modernization
  • Regulatory Readiness
  • Resourcing Services
  • Communications and Customer Experience
  • Data Transform

Data transformation

  • Data science and analytics
  • Data engineering and lineage
  • Data governance and stewardship

Operations innovation

  • End-to-end straight-through processing
  • Alignment of target operating models
  • Business transformation and digitization
  • Outsourcing advisory

Technology acceleration

  • Automation and integration of emerging technologies
  • Blockchain and distributed ledger technology
  • Agile and waterfall project management
  • Testing as a service

Post-trade finance modernization

  • Data analytics, transparency, and control
  • Risk and regulatory reporting and compliance
  • Risk management and funding strategies
  • Accounting and treasury management

Regulatory readiness

  • Regulatory monitoring
  • Business impact assessments
  • Strategies for risk mitigation
  • Program planning and execution

Resourcing services

  • Staff augmentation
  • Project augmentation: Project managers, business analysts and subject matter specialists
  • Operations Resourcing Services (ORS)
  • Technology Resourcing Services (TRS)

Communications and customer experience

  • Communications assessments
  • Omni-channel communications design
  • Hyper-personalization
  • Environmental, Social and Governance (ESG)
  • Investor class actions management

Stay Ahead of the Curve:

To remain competitive and compliant in the face of SRO changes, it’s essential to:

  • Start the journey toward SRO readiness today. Although there is still opacity around some requirements, waiting can lead to missed opportunities and inadequate catch-up time.
  • Stay informed. Taking a regular pulse on industry updates is essential, including attending industry conferences and staying educated on key issues. This will power better decisions.
  • Partner with experts. A trusted partner can help you navigate the changes in a manner bespoke to your business goals and aspirations.

Prepare Today to Benefit Tomorrow

To ensure your firm is prepared to take advantage of the SRO merger and provide a better client experience, it’s essential to employ the right technology.

“Every firm needs to consider the impact of the SRO merger slightly differently,” says Bristow. “The key is to consider what works best for them so they can transform their technology on their terms.”

Firms that embrace this opportunity can leverage technology to build holistic, lifetime relationships with their clients by providing a more seamless, rewarding experience. Firms with technology that is not yet SRO-ready can either close the gap or risk ceding vital market share.

Broadridge is at the forefront of the regulatory conversation on the new SRO. We offer the advantage of extensive experience and expertise to proactively help your firm mitigate risks, while also ensuring a seamless transition. Broadridge is the only wealth technology company offering a complete next-generation, open-architecture, end-to-end technology stack in Canada. Our API-enabled technology unifies the experiences, services, and data of financial firms, allowing advisors to focus their energies on holistic financial planning and deliver a compliant, high-touch, high-tech experience. We are uniquely positioned to support your success during any stage of this important transition.

Broadridge’s platforms are SRO-harmonization-ready today. Contact us to ensure your tech stack is ready to drive efficiencies and maintain your competitive edge.


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