1.3 Financial Market Trends

The securities industry changes constantly, and the CSC expects you to understand the main trends and why they matter to clients and firms. Several of these trends reappear throughout this guide.

Consolidation and Integration

Before 1987, Canada's "four pillars" (banks, trust companies, insurers and investment dealers) were kept separate. Changes to federal and provincial rules in 1987 and the 1992 Bank Act revisions let banks buy investment dealers and trust companies. Today most large dealers are owned by the big banks, which offer banking, brokerage, wealth management, insurance and trust services under one roof. Consolidation brings scale and convenience but also concentrates market power and creates conflicts of interest (for example, a pressure to sell a group's own funds), which is one reason regulators focus on conflict management.

Globalization

Capital moves across borders easily. Large Canadian companies list on U.S. exchanges as well as the TSX, Canadian investors hold large amounts of foreign securities, and foreign investors buy Canadian bonds and shares. Global integration gives issuers access to more capital and investors access to more opportunities, but it also links Canadian markets to foreign shocks, exchange rates and U.S. policy. Coordination with U.S. markets explains why Canada moved to T+1 settlement on May 27, 2024, one day before the United States.

Technology and Digital Advice

Technology lowers costs and widens access, but it also raises issues such as cybersecurity, the quality of automated suitability decisions, and whether self-directed investors understand the risks they take.

The Shift Toward Low-Cost and Fee-Based Investing

Investors have moved money toward exchange-traded funds and index products, and toward fee-based accounts in which advice is paid for openly as a percentage of assets rather than through commissions. Regulation reinforced the shift: deferred sales charges were banned and trailing commissions to order-execution-only dealers were prohibited on June 1, 2022, and total cost reporting from January 1, 2026 requires dealers to show clients the dollar cost of the funds they hold.

Demographics and Client Needs

Canada's population is aging. Large numbers of baby boomers are retiring, so demand is shifting from accumulating wealth to producing retirement income, managing longevity risk and planning estates. A large intergenerational transfer of wealth is under way, and advisors increasingly need to serve heirs and families, not only individual clients. These themes connect to the retail client chapter of this guide.

Regulatory Reform

The past few years brought an unusual amount of regulatory change:

• 2021: the Client Focused Reforms strengthened KYC, KYP, suitability and conflict rules.
• 2022: DSC ban and OEO trailer ban.
• 2023: IIROC and the MFDA combined into a single self-regulatory organization, renamed CIRO, and the Canadian Investor Protection Fund merged with the MFDA's protection plan.
• 2024: T+1 settlement (May 27) and the end of the CDOR benchmark (after June 28), with markets moving to CORRA.
• 2026: total cost reporting takes effect, and CIRO introduces an exam-based proficiency model for investment dealer representatives.

Crypto Assets and Responsible Investing

Crypto assets moved into the regulated market. Canada approved some of the first bitcoin and ether ETFs in 2021, and crypto trading platforms serving Canadians must register with securities regulators and meet investor protection terms. Crypto remains volatile and risky, and suitability rules apply.

Responsible investing, which considers environmental, social and governance (ESG) factors, has grown in fund offerings and institutional mandates. Regulators have warned against greenwashing (overstating ESG features), and climate-related disclosure rules for public companies remain under discussion: in April 2025 the CSA paused its work on a mandatory climate-disclosure rule.

Cybersecurity and Operational Resilience

As more trading, onboarding and client communication moves online, firms face greater risks from cyberattacks, fraud and system outages. Regulators expect dealers to protect client data, report significant cybersecurity incidents, and maintain business continuity plans. Advisors are often the first line of defence: they verify unusual instructions by phone, watch for impersonation and phishing, and look for signs that a vulnerable client is being exploited.

What the Trends Mean for Advisors

The common thread is a shift from selling transactions to giving advice. The CSC is the foundation for that work: it gives advisors the product, market and regulatory knowledge that later specializations build on.