SIPA has a mission:
The Small Investor Protection Association (SIPA) was incorporated (Ontario corporation number 1327366) as a national non profit organization at the end of January, 1999, with headquarters in Markham, Ontario.
SIPA is a voice for small investors and advocates for the interests of investors by making submissions and presentations to governments and regulators. SIPA has over 600 members in ten provinces.
SIPA is supported by members and private donations. Recently SIPA has been the recipient of Cy Pres contributions from class actions which helps to sustain SIPA as it does not receive government grants nor financial support from the investment industry.
SIPA is a non-profit organization and not a registered charity and therefore does not have a charitable tax number.
What We Do
SIPA acts as a Voice for Small Investors
We define small investors as Canadians who have investments from a few thousand dollars to several million dollars, but do not influence the market or individual share prices and do not have a financial manager on staff. They may invest on their own or may depend upon an investment advisor.
Publications and web site
SIPA provides a bi-monthly newsletter, the SIPA Sentinel, for members and supporters. The Sentinel provides articles on current issues and addresses those issues that affect small investors.
SIPA's website provides information for the public. The website was initiated in 1999. In 2000, Industry Canada invited SIPA to participate in the Canadian Consumer Information Gateway project and now provide links to the SIPA website.
Reports and Submissions
SIPA prepares reports and regularly makes submissions to governments and regulators. SIPA was invited to appear before the Standing Senate Committee on Banking Trade and Commerce on April 14th 2005, subsequent to making a submission, “It’s a Matter of Trust”, on February 14th, 2005. This report was published on the Department of Finance website, as well as the SIPA website.
SIPA participated in The OSC Town Hall Meeting in 2005 and participated in the planning and on the panel along with representatives of the OSC, IDA, MFDA and the Ombudsman. The CBC hall in downtown Toronto was filled with 500 people and the crowd actively participated with comments and questions. The event ran 20 minutes over time and was finally closed with people still lined up at the floor monitors to make their comments.
SIPA believes that the current investment industry regulatory system does not provide adequate investor protection. Although regulators claim to give priority to investor protection the fact is their approach is only preventative and is a balance between protecting investors and making capital available for ventures. Each year Canadian small investors are losing billions of dollars due to widespread industry wrongdoing.
In 2004 SIPA published a report, “The Small Investors’ Perspective of Investor Protection in Canada”. This report was delivered to Canada’s top leaders and lead to the OSC sponsored Town Hall Event in Toronto, May 31, 2005. Also in 2004, SIPA partnered with CARP to produce a report “Giving Small Investors a Fair Chance”. This report recommends the federal government establish a national Investor Protection Agency with a primary mandate to provide remedial investor protection.
SIPA also recommended a national financial services regulator that would regulate banks and insurance companies as well as investment dealers and mutual fund companies as the latter produce investment products that are not classed as securities although investors may not see much difference. Segregated funds and principal protected notes are examples. Government has introduced an initiative to implement a national securities regulator and established the Canadian Securities Transition Office but encountered resistance to change. This commitment has been renewed in the 2013 budget.
The regulators should also disclose and make investors aware that they allow the industry to deceive investors by calling sales representatives "Financial Advisors". Although there is a registration category of "Adviser" for persons qualified to give advice, there are few individuals in that category. There is no legal requirement for sales representatives ("Financial Advisors") to have a fiduciary responsibility or even to look after investors' best interests. It is truly "Investor Beware".
SIPA believes that whistleblower protection should be extended to all Canadians and not just to federal civil servants. SIPA has made submissions to the federal government to extend the legislation to include all Canadians working for industry and private enterprise as well as provincial and municipal governments. Providing whistleblower protection will encourage whistleblowers to come forward and enable police and regulators to work effectively.
Accountability and Governance
The Gomery Commission has alerted Canadians to the lack of accountability and governance that is robbing Canadians on a regular basis. It is not only the federal government but also other levels of government and industry that are failing to provide accountability and governance. This lack of integrity is costing ordinary Canadians to suffer financial loss and increasing tax burdens.
The Accountability Research Corporation report on business income trusts made public in 2005 detailed how the failure of income trusts to properly account resulted in many Canadians losing their income and savings. Government reacted and revised legislation to prevent this abuse and protect investors.
White collar crime has taken second place to violent crime and the courts are overburdened. A special judiciary is needed for white collar crime that understands the impact on the victims lives and how big this problem is.Aggrieved investors must rely upon civil litigation to obtain justice. The current regulatory system is not providing effective investor protection and the complaints handling offered by the industry and the industry sponsored dispute resolution mechanisms are failing investors. Civil litigation if the final resort for victims to gain justice.
The right to take civil action is being eroded. Several provinces have reduced limitation periods for civil litigation from six years to two years. The limitation period is the time that a victim has from the event that is cause for an action until action must be taken (a statement of claim must be filed).Many victims that have lost their savings due to industry wrongdoing are unable to recover in two years to deal with important issues. Those who survive often take more than two years to find their way through the convoluted regulatory system. Therefore two years is not enough. In 2005 SIPA joined with CARP and USCO to demand re-consideration of this issue. The three organizations participated in a media conference and later met with the Ontario Attorney General’s staff. Later in 2005 a petition was read in the legislature. This issue remains to be resolved.