The Investment Industry Regulatory Organization (IIROC) is requesting comment on proposed amendments to its minimum requirements for investment dealers that provide order execution only services (OES dealers, a.k.a. discount brokerages).
The proposed amendments would prevent a registered dealer from using discount brokerages to trade; and require OES dealers to identify registered advisors and foreign advisor equivalents with control over a discount brokerage account, IIROC says in a notice published July 26.
Prohibiting discount brokerages from providing trading services to a registered dealer would help ensure that registered dealers “do not have the ability to use marketplace access channels where they are not subject to the full set of IIROC rules when conducting dealer-type activity on a marketplace,” the notice states.
By introducing advisor identifiers, IIROC aims to improve its surveillance capability and help it better detect “unusual orders and trading patterns.”
Comments on the proposed amendments should be delivered to IIROC by Oct. 24.