IIROC is heading towards SRO but there’s lots to do before then

The investment industry regulator has set out its priorities for the year through to March 2023

IIROC is heading towards SRO but there’s lots to do before then
Steve Randall

The Investment Industry Regulatory Organization of Canada (IIROC) has no plans to ease off the gas ahead of the new combined self-regulatory organization.

Although its merger with the Mutual Fund Dealers Association of Canada is expected to happen by the end of 2022 with the new SRO launching on January 1, 2023, IIROC has set out its priorities for the months ahead.

These priorities will help with the creation of a strategic plan and priorities for the new SRO and include exploring ways to return disgorged funds collected from advisors and firms disciplined by IIROC to harmed investors:

IIROC acknowledges that this may not cover all the investors’ losses, its aim is to “remove any ill-gotten benefits, such as profits, commissions, fees, compensation wrongfully obtained, or losses wrongfully avoided by an advisor or a firm through their misconduct and return these funds to harmed investors.”

Modernization of rules and IIROC’s approach to regulation is also a priority, especially in relation to rules that result in “unnecessary process or cost” or that “limit the appropriate use of technology.”

Crypto and cyber

With the digital world adding new risks, the organization will also continue its work with the Canadian Securities Administrators to ensure crypto asset trading platforms are fully integrated into the Canadian regulatory system; and develop cybersecurity resources to help firms mitigate risk.

Other initiatives and priorities include:

  • progressing derivatives rule reform to introduce greater consistency between derivatives and securities rule requirements.
  • developing and publishing proposed competency profiles for Supervisors, Portfolio Managers, Associate Portfolio Managers and Traders.
  • work on Equity, Diversity, Inclusion and Anti-Racism program.
  • IIROC employees formally returned to the office effective May 2, 2022. The organization has adopted a revised remote work policy which provides employees with substantially more flexibility.

“While we actively work towards the realization of a new, enhanced SRO, IIROC continues to prioritize providing value to Canadian investors and enhancing securities regulation across Canada,” said Irene Winel, Senior Vice-President, Member Regulation and Strategy.