Latest annual report highlights SRO consolidation proposal, work to prepare for client-focused reforms, and more
The Investment Industry Regulatory Organization of Canada (IIROC) has released its 2019-2020 Annual Report, which highlighted several initiatives through which the self-regulatory organization has been delivering value for Canadians and the financial system, protecting investors, and supporting industry transformation.
“IIROC became a more flexible, efficient and responsive pan-Canadian regulator – qualities that were increasingly important as COVID-19's disruptions rocked Canada's economy and Canadian society,” IIROC President and CEO, Andrew J. Kriegler said in a statement. “We demonstrated agility and accelerated the way we regulate and support innovation, while enhancing investor protection.”
Declaring the first year of its Strategic Plan a success, IIROC reported on key activities and initiatives that it had embarked on during its most recent fiscal year.
The report highlighted IIROC’s SRO consolidation proposal, which set out a possible path to improve the financial system through a harmonized, one-SRO regime. “The consensus from IIROC's extensive outreach was a framework that must protect investors, be positive for firms of all sizes and business models, reduce regulatory burden, and be achievable with minimal disruption,” IIROC said.
It also featured IIROC’s progress in expanding its toolkit of legal authority across the Canadian provinces and territories. It showed that the SRO had obtained the full complement of tools for investor protection (authority to collect fines, the power to collect and present evidence during investigations and disciplinary hearings, and statutory immunity) in Alberta, Quebec, Nova Scotia, Prince Edward Island, and New Brunswick.
New Brunswick introduced legislation providing the full toolkit to IIROC in December 2019, while Saskatchewan granted the authority to collect fines through the courts in May 2019.
IIROC said it is continuing to work with its partners within the Canadian Securities Administrators (CSA) to resolve issues relating to its proposed Minor Contravention Program and Early Resolution Offers program, through which it sought to provide alternative forms of disciplinary actions. Aside from that, it highlighted the two organizations’ ongoing collaboration to publish a regulatory framework for crypto trading this fall.
The SRO also cited its continued participation in a working group with the CSA and other regulators to formulate a “safe harbour” rule aimed at enhancing protection for vulnerable and senior investors. And as IIROC continues its preparatory work for the implementation of client-focused reforms rule amendments in 2021, it has extended its deadlines for its Plain Language Rulebook in keeping with the CSA’s pandemic-based revisions to their implementation schedules.
The SRO also underscored the completed final phase of its system infrastructure upgrade, which supported its seamless, secure move to a 100% remote-work environment in March this year. It reported that the volumes of daily equity market transactions it monitored increased significantly, peaking at 1.4 billion in late March.
“We are proud of the progress we have made to protect investors and support healthy capital markets with the support of colleagues and partners – the Canadian Securities Administrators, their respective provincial and territorial governments, the Bank of Canada and our employees across the country,” Kriegler said.