Regulator sets out claims rules and eligibility criteria
Canadian investors who lose money due to broker misconduct may soon have a new way to recover some of those losses.
The Canadian Investment Regulatory Organization (CIRO) is set to launch its Disgorgement Distribution Program on April 1, 2026. The program creates a process that allows money collected through enforcement actions to be returned to investors who were affected.
Under the program, funds recovered through disgorgement orders can be distributed to investors who suffered direct financial harm. Disgorgement orders are penalties issued by CIRO hearing panels that require individuals or firms to give back profits or benefits gained through misconduct. According to CIRO, eligible claims will be reviewed and payments may be distributed on a prorated basis. Investors will generally have at least three months from the date of a notice to apply.
Previously, CIRO could order disgorgement as part of disciplinary cases, but there was no system to return those funds to investors. The new program introduces that missing step and brings CIRO in line with other Canadian securities regulators that already have similar processes.
For CIRO CEO Andrew Kriegler, the Disgorgement Distribution Program is a step toward better protecting investors.
"By requiring individuals and firms to return gains obtained through misconduct disgorgement is an important deterrence tool, and through the development of the Program announced today we will be able to help harmed investors as well,” Kriegler said.
CIRO said the program will follow set eligibility rules, along with governance and oversight measures, to guide how funds are distributed. These are meant to ensure the process is handled clearly and consistently.
The regulator added that other options for seeking compensation will still be available. Investors may continue to file complaints with firms, bring cases to the Ombudsman for Banking Services and Investments (OBSI), or pursue arbitration or civil claims.
More details, including eligibility requirements and how to apply, are available on CIRO’s website.
