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How much do you know about the Nova Scotia Securities Commission (NSSC) and the people behind it? The Before You Invest Blog has previously published posts on the Commission, highlighting our mandate and the role of the different Commission branches. But, what about the people that make up the Commission, the ones who shoulder that mandate and tirelessly work to protect Nova Scotia investors? Our new series “Getting to know the Nova Scotia Securities Commission” takes a closer look at some of these people, what they do and how they support the mandate of the NSSC. Today we’re speaking with the Manager of Registrant Regulation of the NSSC, Brian Murphy.
What is your role with the Nova Scotia Securities Commission?
Hi there, I'm Brian Murphy. I'm the Manager of Registrant Regulation here at the Nova Scotia Securities Commission, and I actually have a couple of roles. My main role as the Manager of Registration is to review all the applications that come to us for registration for firms and individuals in the category of Portfolio Manager, Exempt Market Dealer, and Scholarship Plan Dealer. Up until April 1st of this year, I handled the registration for all categories of registration, but starting in April, we delegated the registration responsibility for investment dealers and mutual fund dealers to CIRO, the Canadian Investment Regulatory Organization. In my other role, I do compliance examinations alongside our Compliance Examiner, Angela Scott. So, I assist her in doing on-site and remote compliance examinations of our firms and individuals. Combined with those two roles, I also sit on many different national committees. These committees are looking at real-world events that happen in the industry and look towards rule changes in the future, amending current rules and drafting new rules.
How do you support the mandate of NSSC?
The mandate of the Nova Scotia Securities Commission is twofold, mainly to protect the investors and to foster the capital markets in Nova Scotia. So, the first part of the mandate to protect investors is where the registration and compliance functions come in. The best way to protect the capital markets and to protect investors is to ensure that capital markets participants are of the highest proficiency, have outstanding integrity, and financial solvency. In the role of registration, that's the three areas that we look at, proficiency, integrity and solvency. Proficiency is having the knowledge and the experience needed for the type of activity that you're going to be engaged in. Integrity is what we look at as the overall character of the person. Past behaviour is the best indication of future behaviour. So, we're looking at things like criminal records, insolvency issues, previous employment history, things like that. The third pillar of what we're looking at for registration is solvency itself to make sure that the individual is in a stable financial position and not getting into this industry just to make a quick buck to help themselves out of their financial situation if they happen to be in one.
What should the public need know about NSSC that they might not know?
What I think the public needs to know is basically that we exist. I've been in this job now for 22 years, and almost every time I meet somebody new at a party or get together anything like that, and they say, “oh, where do you work?” and I say the Nova Scotia Securities Commission, almost every time they say “oh, what's that?” So, a lot of people don't even know that we exist, that securities commissions exist anywhere, and what our role is. So, I think number one the public should be aware that there's other Nova Scotians out there that are actively and fully engaged in protecting their investments and helping to build the capital markets in Nova Scotia. So along with just knowing that we're there, knowing what we do. We are here to provide information on questions or any type of inquiry they have on the industry or how to get into the industry. And also, what we don't do. We don't make recommendations on who's the best investment advisor. We don't say this is a great security or this is not a great security. Sometimes we'll issue alerts when something is fraudulent, and we know for sure. But we can't say if this a good mutual fund or if that's a bad mutual fund; that's just not our role. That's up to your registered advisor to give you that information.
What do you find most challenging about your role?
What I find challenging about this position is balancing the enormous number of regulations that govern this industry with the day-to-day application of the firms and individuals that need to follow these regulations in Nova Scotia. The Commission is divided into three branches, corporate finance, policy and market regulation, and enforcement. We have a staff of 20 divided into these three branches and it takes years to understand all the regulations within each of these branches. I do feel that it can be overwhelming for the industry and the individual applicants or individual registrants. It is a challenge to act as a go between, between all these regulations and what the industry needs to understand about those regulations and help them to get it into a practical application of how they run their business every day.
What do you enjoy most about your role?
What I enjoy most about my role here is catching bad guys. I've been here for 22 years and the application process, the registration process is designed to screen out the information that is needed to make the suitability determination on any application. Human nature being what it is, 99.9% of the applications we get are clean, honest disclosures of people and the firms they work for. But at some point, there’s going to be somebody that's trying to sneak in. They're not going to be fully honest with their answers and they're trying to pull one over on us. So, there's a lot of, not exactly detective work, but we have to look closer than the information that's provided sometimes and stopping what could be a bad player getting into the industry is always a nice reward.
Why is registration important to investors?
Registration is important to investors because it is the way we control who comes into the capital markets and who is dealing with the investors on a one-to-one level. We have found in the past almost all the problems and complaints that we receive are based on an individual registrant’s behaviour or conduct, not by the firm that they work for. And what I mean by that is it's going to be the dealing representative or the advising representative that is sitting across from you talking to you and providing your connection to the industry. That's where almost every problem we've ever encountered originates from. So, if we do our job right and we find problem areas in these individual applications before they are registered this is the best way of ensuring that the people you are dealing with in the capital markets are the right kind of people. They're educated, they have the experience they need, and you know you can feel safe and secure in handing them over confidential information, your money, everything else that that's involved in this. People need to realize that registration is not a right, it is a privilege in Nova Scotia. Registration is something that is granted; it is not something that can be expected. So, we are looking at the individuals and the firms too, but again, mainly individuals are where the investors are going to be interacting with the industry and that is the most important connection that that we are looking at.
How does someone become registered with NSSC?
To get registered, the first thing individuals need to be aware of is that they have to work for a registered firm. Registration is not like a driver's license. It's not given to you as an individual. It's granted to you on behalf of the firm that you work for. So, step one is get hired by a registered dealer or advising firm. Step two is complete the proficiencies depending on the category that you're in. You have to have a baseline proficiency and possibly some experience requirement as well. Once that is covered off, you can apply online. Everything is done through the National Registration Database. It's all electronic. It's a fairly long application, but it's not onerous. It’s about 40 pages divided into about 20 different sections. So, we're looking at your history, your proficiency, your work experience, that type of thing. Any other regulators that you may be dealing with. Once that application is received, it's reviewed. We try to get these done within a week or so and the only thing that needs to come in with the application, if you live in Nova Scotia, is a criminal record check. We don't have the ability to provide those, so that must be accompanied with the application. Once that's done and if the application is approved, then you are registered to go and work with the firm that you've been hired by.
What do you enjoy doing with your time outside the NSSC?
My time outside the Commission, I have lots of things to do. I'm a homeowner. My home is rolling on 30 years now, so constant repairs of minor and major amplitudes are pretty much always on the go. Just this summer I replaced my back deck, put down new flooring in the house, and recently I've had a flood in the bathroom, so now I have drywall work to do. I also have a motorcycle. I love to go out on that and explore little nooks and crannies of Nova Scotia. I've lived here all my life. I've driven by countless communities on the way to some other place and never pulled off the road to see what these places are. I've discovered some amazing little hideaway gems that are just unbelievable. I also do woodworking. Everything from a small candle holder all the way up as large as an armoire. And as of last winter, I've got back into building scale models, plastic models. So that's that is a lot of fun too.