Brokerage firms can expect a review of their approach to conflicts of interest, an examination of their use of social media, and the results of a recent mystery shopping exercise, in the months ahead.
The Investment Industry Regulatory Organization of Canada (IIROC) published a notice Tuesday outlining its priorities for the coming year.
The notice indicates that the self-regulatory organization (SRO) is currently reviewing how it can best fulfill its mandate as the market environment continues to evolve. “We are doing so by re-evaluating and adjusting our current strategic objectives and priorities over the next several months while continuing to strengthen our day-to-day oversight of IIROC-regulated firms and their registrants and our surveillance of Canada’s debt and equity markets,” it says.
In the meantime though, IIROC is setting out its plans for the coming year, including a planned study of dealers’ practices for addressing conflicts of interest, which is slated for November. For October, it’s planning targeted compliance audits on the use of social media. And, in June, the results of a mystery shopping exercise commissioned by the SROs and the Ontario Securities Commission (OSC), “to assess and help firms improve the quality of service and advice provided by [reps] to investors”, is expected.
By March 2016, IIROC intends to utilize feedback from investor focus groups regarding their perceptions and experiences with the collection of know-your-client (KYC) information to “develop an appropriate regulatory response and improve member and investor education.”
It is also planning a review of discount brokers to assess their compliance with the existing rules and to inform possible policy development in this area (slated for September). By the end of the year, it is aiming to introduce amendments to the proficiency assurance regime for IIROC registrants; and, it hopes to publish the aggregated plain language rulebook for final review and comment in January 2016.
In the fall, it will also be developing a plan to help firms establish cyber-security protocols, and consulting with the industry on the results of its research into the impacts of high-frequency trading (HFT).
The notice also indicates that responding to a 2013 survey of IIROC members remains a priority. It says that, in the coming year, it intends to focus on two key findings from the survey: the timeliness of compliance examination findings, and considering the potential impact of its regulatory actions on all stakeholders.
IIROC says that it will also participate in government consultations on the proposed Cooperative Capital Markets Regulatory System (CCMRS), and on Ontario’s study of possible regulatory reform of financial planning.