RECO: Registrar Reports to the CEO

Let’s have a quick look at the Dentons’ Report at page 13:

“Registrar’s decision-making process in the iPro Matters and regulatory framework inadequately integrated the Statutory Director position

TRESA establishes two statutory officer roles, namely a Statutory Director and Registrar, who shall be appointed by the Board. The Board has the option of appointing one or more deputies who perform such duties as are assigned by the Director or Registrar, and act as Director or Registrar in their absence, provided that only one deputy may act as Director or Registrar at a time. The two positions (including deputies) cannot be held by the same person. While the Registrar has broad powers in connection to registrants, including inspections, the Statutory Director’s powers are specific to appointing investigators, ordering asset freezes, and applications to court in cases of non-compliance.

The requirement that the two officers cannot be the same person suggests that there was legislative intent for some form of separation of powers or accountability between the two positions. While the present legislation is ambiguous about their relationship, we note that prior to the Good Government Act, 2009,  REBBA provided that the Registrar shall exercise the powers and perform the duties imposed on them under supervision of the Statutory Director, but the provision was amended in 2009 to remove that supervisory relationship. Based on our interviews, we note that it would be impractical for the Registrar to report to the Statutory Director if the Registrar also holds the position of CEO (or equivalent) within the organization, as the Statutory Director would then need to be external to the staff reporting structure. Nevertheless, this situation does not apply to RECO, whose Registrar is subordinate to the CEO (who is also the Statutory Director). But for the 2009 amendment, TRESA would have mandated RECO’s CEO to supervise the Registrar’s exercise of regulatory power, which may have facilitated proper accountability and collaboration in RECO’s response in the iPro Matters.

We note that there is presently no prohibition on the Statutory Director supervising the Registrar. Furthermore, it still appears that both officers are designed to work in tandem, given their related duties in inspections and investigations. If the Statutory Director is to make an appropriate decision regarding whether to freeze assets or obtain restraining orders, it would be appropriate that they be apprised of the details of all enforcement cases that RECO is handling; and if they are to make suitable investigator appointments, it would be appropriate that they have some supervision of the investigators’ performance. This duality between inspections and investigations is somewhat reflected in the RECO Audit & Inspection Program SOP, which provides that inspections may be escalated to the Investigations Program, but inspectors do not refer matters directly for investigation, but rather investigations are initiated by the leadership of one of the enforcement program owners. In sum, the TRESA framework clearly indicates that the Statutory Director should have a substantial role in RECO’s regulatory and enforcement work.

However, even though the RECO CEO was appointed as the Statutory Director, we heard that she was given only minor sporadic details on the iPro Matters, which she described as “breadcrumbs”. Further, the CEO gave evidence that the Registrar told her not to interfere with Registrar matters and, as such, she was reliant upon the Registrar’s updates and timing in relation to the iPro Matters. This approach taken by the Registrar is inconsistent with the TRESA framework.

Based on these observations, it appears that RECO’s Statutory Director was inadequately integrated into RECO’s regulatory framework by the Registrar generally, and she did not operate as a key leader alongside the Registrar in determining the appropriate response to the iPro situation. As addressed at 2(A)(i) herein, a misunderstanding of the principle of non-interference with the Registrar’s statutory independence is likely to have been a significant reason for this.”

Comment

In reviewing this analysis in detail, it would appear that the CEO (Statutory Director) really didn’t do her job. That’s just like having no CEO at all.

When you look at the “timeline”. The Registrar first knew on 19 May 2025. Guess when he told the CEO? The timeline says “19 May 2025”. That seems to be the first day, to me!

According to Dentons:

• “ … the Registrar is subordinate to the CEO (who is also the Statutory Director).”
• “We note that there is presently no prohibition on the Statutory Director supervising the Registrar.”

While Dentons criticizes the Registrar for making a bad decision, it doesn’t criticize the CEO for not doing “her job”. And, according to my review of the “timeline”, she knew from Day 1.

Brian Madigan LL.B., Broker