Industry icon sends scathing message to IIROC

Industry icon sends scathing message to IIROC

Industry icon sends scathing message to IIROC In a four-page email to IIROC general counsel Doug Harris, industry veteran Tom Caldwell is suggesting IIROC will need to take a long, hard look in the mirror in order to remain relevant.
 
There does not seem to be any ‘self’ in self regulation. This comment by a senior government official reflects the widespread industry view that IIROC does not have any empathy with, or real understanding of, the investment process,” writes Caldwell, answering an IIROC request for feedback on its role within the industry. “By not adequately addressing the overall health of the investment industry, IIROC has lost its raison d’être and is simply a duplicate regulator, which will be eventually absorbed.”
 
He’s not the first advisor to suggest IIROC might be an unnecessary regulatory body whose oversight could easily be absorbed by the CSA and its member regulators. The downside according to others in the industry is that regulators such as the OSC have little appetite for disciplining advisors but instead prefers to write rules and regulations.
 
IIROC appears to have little concern with the industry burdens it is imposing regarding procedural matters,” wrote Caldwell. “The primary goals of efficiency and meaningful regulation are long gone.
 
“The time burdens now being imposed by non-substantive and paper trail requirements have created an unsustainable business model for independent firms.
 
The loss of independent firms is no doubt explained away by market conditions, metals and energy pricing, etc, writes Caldwell. “Make no mistake – over regulation is an important part of this trend.”
 
Caldwell believes IIROC’s role is to make the capital markets more efficient rather than cumbersome and bureaucratic.
 
“Maybe it would be better for IIROC to attempt to build on the positives rather than their present destructive course of being the toughest cop in town,” Caldwell said.
4 Comments
  • Graham 2015-09-15 11:51:17 AM
    Bravo to Caldwell! Say it like it is. I love working with clients but the regulatory environment is getting ridiculous. And, in the end it still doesn't stop the unscrupulous.
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  • Murray Schultz 2015-09-15 12:07:03 PM
    Substantially agree. Regulators in general seem to be under the impression that they, by over-burdening compliance, are serving the public. In reality, there comes a point where it must be said that regulators are a multi-line-item cost that is out of line with either the protections they offer the investing public or the post-loss recovery of investors' money i.e., they raise the cost of doing business in an already low margin arena. When there is substantial overlap between regulators, there is substantial inefficiency and, therefore, unwarranted cost and confusion (for both investors and investment professionals.
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  • Mark Matsumoto 2015-09-15 5:29:54 PM
    Mr Caldwell is just saying what everyone is thinking but too nervous to say. Over-regulation is doing more harm to the average investor than good by making "him" a non-profitable client and therefore reducing his access to advice.
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