More regulation for advisors

More regulation for advisors

More regulation for advisors

The Investment Industry Regulatory Organization of Canada (IIROC) and Quebec’s Chambre de la sécurité financière (CSF), have entered into an agreement to further protect the investors of Quebec. They will now share information concerning disciplinary decisions and potentially coordinate some of their regulatory activities.

While this is good news for investors who will see advisors and firms further regulated and investigated should they make a complaint, it means planners are subject to even more scrutiny.

Under the memorandum of understanding, which both parties signed, if one regulator makes a disciplinary decision against a financial advisor or firm, it will automatically trigger a review of the sanctioned individual's activities by the corresponding regulatory organization. Therefore, should a complaint be made, the planner will be investigated by two bodies as opposed to one.

"Through our collaborative efforts we are improving protection for Quebec investors by sharing comprehensive information and making appropriate decisions so that those working for IIROC-regulated firms meet the highest professional and ethical standards." said Andrew Kriegler, the IIROC's president and CEO.

While most advisors hold themselves to a high standard already, this could mean that any unwarranted complaints receive extra attention with two regulatory bodies monitoring them.

One benefit this new partnership could bring is that if a person is disciplined in some way by the CSF, this will be noted elsewhere in Canada meaning that for those advisors who aren’t necessarily on the same ethical footing as their peers, they’re more likely to opt out of the industry.

Kriegler said this partnership could extent between to other bodies too.

"We intend to pursue similar agreements with other organizations to build on this important initiative which enables greater efficiency and consistency of the supervisory system in the public interest."

The agreement comes into effect immediately.