The Investment Industry Regulatory Organization of Canada is proposing to consolidate and streamline its various enforcement rules.
In a notice published Friday, IIROC says that its proposals aim to consolidate and rationalize the enforcement-related rules that are currently contained within the trading rules and the dealer rules. Several enforcement-related provisions have also been amended, it notes, and IIROC is also updating the rules relating to compliance examinations, and registration approvals and reviews.
IIROC indicates that the primary purpose of the project is to streamline enforcement processes between market and dealer member matters; eliminate redundant provisions; update enforcement procedures to ensure fair and transparent enforcement hearings; separate the rules for compliance examinations and for registration-related approvals or proficiency exemptions; and, to clarify the opportunity to be heard regarding a decision affecting registration-related approvals or proficiency exemptions. And, it says that both the regulator and respondents in enforcement cases will benefit from the enhanced clarity and certainty in the proposed rules.
The consolidated rules relate to standards of conduct, enforcement investigations, enforcement proceedings, hearing committees, rules of practice and procedure, compliance examinations, approvals and regulatory supervision, regulatory review proceedings and procedures for opportunities to be heard.
The notice indicates that, in drafting the proposed consolidated rules, they considered whether to require dealers to include a requirement in their contracts with third-party service providers requiring them, and their employees, to subject themselves to IIROC’s jurisdiction for the purposes of enforcement investigations, and to give testimony in enforcement hearings. It was determined that this would be a substantial change to existing practice, and so it is going to pursue this as a separate rule amendment project.
IIROC says that the rules are the result of a “years-long process” that involved staff from its compliance, enforcement, policy and registration departments, its general counsel, and external legal counsel, Phil Anisman. Comments are due by June 21.