IIROC publishes annual enforcement report

The regulatory group highlighted legislative advances that expanded its enforcement toolkit across several jurisdictions

IIROC publishes annual enforcement report

The Investment Industry Regulatory Organization of Canada (IIROC) has published its annual enforcement report, which highlighted progress in its enforcement toolkit.

“This past year, IIROC worked diligently to obtain greater legal authority from provincial and territorial governments across Canada to enhance our enforcement effectiveness,” said Elsa Renzella, IIROC’s senior vice president for Registration and Enforcement. “These legislative changes have made a meaningful contribution to investor protection because, where IIROC has greater enforcement authority, advisors know they are accountable for their actions and can't avoid penalties simply by leaving the industry.”

The regulator has obtained access to a full enforcement toolkit — authority to collect fines, collect and present evidence, and statutory immunity — in four provinces: Alberta, Quebec, Nova Scotia and, most recently, Prince Edward Island. In British Columbia and Ontario, meanwhile, it has only successfully acquired the authority to collect fines.

IIROC also has partial enforcement authority in the Northwest Territories, Nunavut and Yukon (authority to collect fines and present evidence at disciplinary hearings); Manitoba (able to collect fines and enjoy statutory immunity against malicious lawsuits when acting in good faith in carrying out its mandate); and most recently, Saskatchewan (collect fines and the right to appeal a decision of a disciplinary hearing panel to the Financial and Consumer Affairs Authority of Saskatchewan).

“IIROC continues to pursue additional legal authority to strengthen the effectiveness of its enforcement actions,” the organization said.

IIROC also made note of its public consultation on alternative forms of disciplinary action. The regulatory body has advanced proposals for a minor contravention program (MCP) and early resolution offers (EROs), with the stated aim of “providing more flexibility and efficiency when addressing wrongdoing.”

The group held several consultations on the proposals with industry representatives and investor advocates, as well as a survey of over 1,000 Canadians from IIROC’s online Investor Panel. After making adjustments based on input it received, the group issued a request for further public comment in April. Early responses from investor advocates have stopped short of endorsing the measures.

Noting IIROC’s constant drive to protect investors, Renzella said elderly and vulnerable investors in particular need protection from “the few bad apples” who do not “adhere to high ethical and professional standards.” Reflecting that priority, the report said that suitability remains the core focus for enforcement, with close to half of all suitability cases involving seniors.

“Enforcing high regulatory standards in the investment industry remains a top priority,” Renzella said. “As we embark on new initiatives and continue with our ongoing work, we will focus, as always, on protecting Canadian investors and their confidence in Canada’s capital markets.”


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