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Canadian Securities Regulatory Monitor News and Insight

Tag Archives: IIROC

IIROC Proposes Two New Forms of Disciplinary Action Against Dealer Firms and Approved Individuals

Posted in Enforcement, IIROC, Industry News, Proposals

Recently, the Investment Industry Regulatory Organization of Canada (IIROC) proposed two new disciplinary programs (the Programs) that will be of interest to IIROC Dealer Members and Approved Persons:

  1. A “Minor Contravention Program” (MCP) that would impose fines on dealer firms ($5,000 per contravention) and their approved individuals ($2,500 per contravention) for minor offenses that might not have triggered any substantive legal action by IIROC Staff in the past.
  2. An Early Resolution Offer (ERO) process that would permit IIROC Staff to make formal offers of settlement earlier in the enforcement process, at
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IIROC Announces Dealer Sweep on Compensation-Related Conflicts

Posted in Broker-Dealers, Compliance and Supervision, CSA, IIROC, Industry News, Marketplaces, Registrants, Uncategorized

On April 6, IIROC published Notice 16-0068 – Managing Conflicts in the Best Interest of the Client (the 2016 IIROC Notice). IIROC intends to strengthen compliance by Dealer Members (DMs) with IIROC’s conflicts of interest rules, with a particular focus on the management of compensation-related conflicts.

Specifically, IIROC announced that it will take the following actions:

  1. Immediately enhance its compliance test procedures to more closely examine compensation grids, supervisory oversight of advisors recommending products with high commissions, and the monitoring of advisors approaching compensation thresholds;
  2. By June 2016, conduct a comprehensive survey to gather more detailed information
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IIROC 2016 Compliance Priorities

Posted in Broker-Dealers, Compliance and Supervision, IIROC, Registrants

The Investment Industry Regulatory Organization of Canada (“IIROC”) is Canada’s self-regulatory organization that overseas investment dealers and equity market places. In its 2016 statement of key compliance priorities, IIROC sets out its ongoing efforts to strengthen the culture of compliance among dealer members (“DMs”).

As in prior years, IIROC’s focus will be on taking action against DMs that fail to address significant compliance findings and/or fail to demonstrate a commitment to the development of a strong compliance culture. In addition, IIROC will, through its new Consolidated Enforcement Rules (expected to come into force in 2016), have the ability to … Continue Reading

Why Securities Regulators Can’t Collect Monetary Sanctions, and What They Plan To Do About It

Posted in AMF, CSA, Enforcement, IIROC, Litigation, OSC, Uncategorized

Securities regulators across Canada impose significant monetary sanctions against market participants each year. The CSA recently reported that provincial securities regulators collectively imposed $138.3 million in fines and administrative penalties and $111.7 million in restitution, compensation and disgorgement orders in 2015.[1] This was an increase of 102% from the previous year and the highest amount of monetary sanctions imposed since 2009.

At the same time that regulators are imposing increasing monetary sanctions, they are facing an increasing inability to actually collect these sanctions. For example, the British Columbia Securities Commission has collected less than 5% of monetary sanctions imposed … Continue Reading

CSA Proposals Require Enhanced Corporate Debt Trade Reporting and Transparency by 2017

Posted in Broker-Dealers, Continuous and Timely Disclosure, CSA, Exempt Market Dealers, IIROC, Industry News, Marketplaces, OSC, Proposals, Requests for Comment

Last week, the Canadian Securities Administrators (CSA) published for comment Proposals that would require trade information for all corporate debt securities executed by dealers to be made publicly available, subject to delayed dissemination and volume caps, by the end of 2017. The CSA Proposals aim to enhance the regulation and transparency of the Canadian fixed income market, partly in response to certain limitations highlighted in a Report on “The Canadian Fixed Income Market 2014” published earlier this year by the Ontario Securities Commission which suggested that retail investors in corporate fixed income securities have less access to … Continue Reading

The OSC Overturns IIROC Panel’s Decision with Harsher Sanctions

Posted in Enforcement, IIROC, OSC

The Ontario Securities Commission (OSC) recently imposed harsher sanctions than were ordered by a panel of Investment Industry Regulatory Organization of Canada (IIROC) following a contested proceeding. The OSC’s decision has important implications in enforcement proceedings before IIROC.

The IIROC Decision (no suspension)

After a contested hearing, an IIROC Panel determined that Lucy Lukic, a registrant at an IIROC member firm, recommended off-the-book investments to her clients.[1] Lukic had recommended securities in an investment fund that was owned and promoted by her husband, a fact that was disclosed to her clients. However, the securities were sold without a prospectus … Continue Reading

IIROC’s New Policy Regarding Personal Information in Disciplinary Proceedings Takes Effect on May 1, 2015

Posted in Compliance and Supervision, Conformité et supervision, IIROC

The policy provides guidance relative to the use and disclosure of personal information in proceedings brought pursuant to Rule 20 of the IIROC Dealer Member Rules and Part 10 of the Universal Market Integrity Rules (UMIR). This policy will replace IIROC’s “Policy on Requests for Access to Disciplinary Hearing and Settlement Hearing Records”.

New Requirements

The new policy requires the redaction of specific personal information that is enumerated in the policy from documents filed with the National Hearing Coordinator or with an IIROC Hearing Panel. The policy also limits public access to the hearing record to the redacted record.

The … Continue Reading

OSC Second Guesses IIROC on Marc McQuillen Settlement Agreement and Northern Securities Penalties

Posted in Compliance and Supervision, Enforcement, IIROC, OSC

As we discussed in a previous post, the Ontario Securities Commission (OSC) rarely exercises its broad statutory discretion to interfere with and remake IIROC decisions. Last month, the OSC departed from this approach on two separate occasions.

First, in McQuillen, the OSC took the rare but not unprecedented step of setting aside as “manifestly unfair” a 2007 settlement agreement (the Agreement) between IIROC and Marc McQuillen (the Applicant). The OSC also ordered IIROC to expunge the Applicant’s related disciplinary record and to repay $25,000 in fines to the Applicant.

The Applicant entered into the … Continue Reading

IIROC Survey Shows Diverse “Best Execution” Practices

Posted in Broker-Dealers, Compliance and Supervision, IIROC, Industry News, Marketplaces

Recently, the Investment Industry Regulatory Organization of Canada (IIROC) released the results of a best execution survey it conducted of all its dealer members that execute secondary market trades in listed securities. There is great variability in the best execution practices followed by participants. In this post we comment on some of the survey results.

Compliance and Supervision Practices

Compliance Procedures

Nearly three quarters of respondents have procedures specifically in place to supervise compliance with best execution. Only two thirds of the participants that are members of some marketplaces and always use an executing participant to enter orders … Continue Reading