Mutual fund dealers won’t be allowed to offer fundamentally different services — such as discretionary accounts or discount brokerage accounts — under the Canadian Investment Regulatory Organization’s (CIRO) rulebook consolidation project.
The self-regulatory organization (SRO), which is bringing together the rules for fund dealers and investment dealers, has decided not to pursue certain reforms proposed in the initial phase of the project.
Specifically, CIRO will not go ahead with proposals to allow fund dealers to offer the kinds of services that are currently the preserve of investment dealers — namely, the ability to offer discretionary accounts, managed accounts and order-execution-only accounts — as part of the rulebook consolidation project.
The SRO’s decision follows discussions with the Canadian Securities Administrators (CSA) and a review of feedback received on those proposals.
Any proposed expansion of fund dealers’ services will be “developed in consultation with the CSA as part of a separate policy project with a separate timeline,” CIRO said.
At the same time, CIRO will go ahead with proposals to allow fund dealers to offer margin accounts and to “use client free-credit cash balances within their operations if they pay clients interest in return for using these balances.”
Those proposals are subject to CSA approval, and the SRO noted that if they prove controversial, they may be shifted into a separate policy project too.
The SRO has also decided to expand the comment periods for the last two phases of the rule consolidation project to 90 days; to republish the complete set of proposals for a final consultation before going ahead with the new rulebook; and to adopt the new rules all at once, rather than in stages. That final publication is expected in the winter of 2025-2026.