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Pursuant to Canadian legislation, financial institutions are required to put in place policies that are best suited to their activities. In its turn, the OSFI, the country’s number one financial regulator, ensures effective regulation of Canadian financial institutions by regularly publishing its recommendations & guidelines. As regards Canadian banks, they’re required to maintain adequate capital & proper liquidity forms. 

It is, therefore, essential that all those who want to register a financial company in Canada or are interested in the regulation of financial institutions in Canada keep that in mind.

Establishing a Financial Institution in Canada: Securities Market

The legislation applicable to securities requires their issuers & holders to:

  • appoint a CCO responsible for enforcing procedures & policies;
  • implement in-house systems of control.
  • put in place proper policies & procedures.


Holders of securities & financial institutions must:

  • report any fraudulent or suspicious transactions; 
  • put in place programs ensuring KYC; 
  • carry out assessment of operational risks. 

Financial institutions must also have duly trained personnel capable of identifying risks connected with AML/CFT violations.

Canada: Registration of a Financial Company

Financial institutions are required to set up the following committees:

  • audit & inspection committees;
  • committees charged with identifying & resolving conflicts of interest, providing clients with necessary info & processing clients’ complaints.

In its recently published guidelines, the OSFI has introduced a regulatory framework whereby institutions are obliged to assess operational risks.

Canada: Regulation of Financial Enterprises

Pursuant to Canadian legislation, directors of financial institutions are responsible for managing & overseeing their activities. Their responsibilities also include:

  • setting up audit & review committees;
  • handling complaints, providing clients with necessary info & resolving conflicts of interest.

BoD members also bear personal responsibility for failure to respond to a violation or allowing it to persist.

Founding a Financial Company in Canada: Complaints

Financial institutions’ clients are entitled to file complaints with regulatory & independent bodies. They also have a right to claim for damages against providers of financial services if the latter commit any violations.

Financial institutions must accept services of a grievance authority; however, they aren’t required to take their advice to resolve financial disputes in Canada. 


Providing financial services in Canada requires compliance with numerous requirements & AML/CFT rules. And that, in turn, requires having an in-depth understanding of Canadian legislation. Should you need any advice on the regulation of financial establishments in Canada, please do not hesitate to contact IQ Decision UK.