Andrew Kriegler, president and CEO of the Investment Industry Regulatory Organization of Canada’s (IIROC), is calling on governments to help IIROC improve enforcement by providing the self-regulatory organization (SRO) with greater powers to collect fines from securities violators who leave the industry, rather than paying penalties levied by regulators.

Speaking at the SRO’s annual general meeting, and a subsequent reception, at the Toronto Board of Trade yesterday, Kriegler reiterated IIROC’s long-standing demand for more power to collect fines from individuals who violate its rules and then exit the industry leaving their penalties unpaid.

In 2014, IIROC collected 100% of the penalties levied against firms in the industry, but just 17% of the penalties handed down against individuals. “It’s true that sometimes these individuals have no assets — making it very difficult to collect,” Kriegler conceded. “However, some rule breakers often evade payment by simply leaving the securities industry, or by operating in a separately registered or unregistered capacity.”

“This is wrong. If you break the rules and abuse the trust your clients have placed in you, you must pay the penalty and be seen to pay it,” he said.

Alberta and Quebec are the only provinces where IIROC has the ability to enforce its sanctions through the courts. And in those provinces its collection rate against individuals is much higher, Krieger noted. For example, IIROC collected 59% of the fines issued against individuals in Quebec last year, which was the SRO’s first full year with that power in Quebec.

In his remarks, Kriegler stressed that he has made it a priority to strengthen IIROC’s ability to collect fines. “Giving us the same power across the country would send a strong message of deterrence to potential wrongdoers and support investor confidence in the system — and would do so at no material cost to governments or taxpayers,” he said.

Kriegler noted that IIROC has been working with the securities commissions and governments across the country on this issue. “As we continue to pursue these powers we ask for your support in this effort,” he said.

At the same event, Kriegler also reported that IIROC will be publishing its fifth and final academic paper on the impact of high-frequency trading (HFT) this week; and, he announced that the SRO will be co-hosting a forum with the Capital Markets Institute at the Rotman School of Management on Oct. 19 to examine HFT, and whether regulators should be doing anything to address concerns with it.

“This forum will provide an opportunity for the academic authors, market participants, regulators and other interested parties to engage in a robust, thought-provoking dialogue about the findings and emerging themes before determining what, if any, regulatory response may be required,” he said.