The Investment Industry Regulatory Organization of Canada (IIROC) is providing a second extension to the comment period on proposed guidance on order-execution only (OEO) firms issued in November 2016.
The proposals were initially issued for a 45-day comment period, but IIROC announced on Dec. 2 that it would give firms until Jan. 20 to provide feedback on the proposals. Now, the self-regulatory organization (SRO) says that industry participants have asked for still more time to consider and comment on the proposed guidance. So, IIROC has further extended the comment period until Feb. 3.
The proposed guidance would represent a change in traditional regulatory policy by allowing discount brokerage firms to provide a limited type of advice to clients in the form of model portfolio tools, despite the fact that these firms are traditionally exempt from suitability requirements on the basis they don’t provide advice.
IIROC indicated in the original notice that the market has shifted significantly in recent years amid ongoing technological innovation and that these services are helping to fill the “advice gap” as traditional full-service firms raise their investment minimums.
In addition to the proposals to allow OEO firms to offer model portfolio tools, the new guidance also modernizes IIROC’s expectations for these firms, generally, and sets out the regulator’s views on the sorts of products, tools and account types that should be permitted at these firms.
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