Your clients' behaviour has changed, IIROC is responding

Regulator says it will be more flexible to allow industry innovation

Your clients' behaviour has changed, IIROC is responding
Steve Randall

The way that Canadian investors make their decisions has evolved and the investment industry’s regulator says it is responding to these changes.

IIROC has launched a three-part strategy to respond to changes in demographics, investor behaviour and technology; and the way that the investment industry is evolving.

The regulator wants to ensure that its policies and regulations accomodate new business models in the investment industry, while continuing to protect the interests of investors.

"IIROC is committed to interpreting its current rules as flexibly as possible, or changing them if necessary, to accommodate new service offerings where appropriate, without compromising investor protection or choice," says Wendy Rudd, IIROC's Senior Vice-President, Member Regulation and Strategic Initiatives. "Our goal is to facilitate innovation and accommodate changes in business models to meet investor needs."

Consultation launched to address industry regulatory challenges
To help address the innovation of the investment industry, IIROC will conduct a focused consultation in collaboration with Accenture, to better understand how regulatory issues impact innovation, technology, and changing client demands.

The key elements of this study include:

  • developing a better understanding of perceived regulatory barriers to innovation
  • facilitating open dialogue with dealer firms about their ideas and what they are seeing on the horizon
  • identifying how regulation may need to change to accommodate innovation
  • looking at how other regulators/jurisdictions have adapted to this evolution.
What’s changing now?
While the consultation will take some time, IIROC has also announced some things that will happen sooner.

It has issued final guidance for order execution only (OEO) firms to clarify the products, tools and information these firms can provide to investors under its existing rules.

The regulator is also enhancing its process for reviewing and approving changes in dealers' business models, allowing for a faster, more-efficient process and ensuring existing rules are applied as flexibly as possible, while adhering to the underlying principles.