With the provincial government in Ontario considering possible regulation of financial planning, the Investment Industry Regulatory Organization of Canada (IIROC) has withdrawn a rule it proposed in this area back in 2008.
IIROC announced Thursday that it has withdrawn its proposed rule concerning financial planning, which would have imposed proficiency and supervisory requirements for reps who hold themselves out as financial planners.
The regulator notes that, during the public comment process on its proposal, several commenters raised a number of concerns with the proposal, including that “a more holistic approach to the regulation of financial planners would be preferable to the relatively limited measures being proposed by IIROC.”
IIROC notes that, since then, discussions about how best to regulate financial planning have continued; and, it cites the recent consultation initiated by Ontario’s Minister of Finance. (See Investment Executive, Ontario mulls review of advisor governance, November 17, 2013.)
The regulator says that its staff “have consistently taken the view that a coordinated regulatory approach to financial planning should be adopted across Canada, since consistent proficiency, ethical, and professional requirements would have important benefits not only for investors, but also for the financial planning community itself.” As a result, it has decided to withdraw its 2008 proposal.
Separately, IIROC is also scrapping two other rule proposals. It is withdrawing proposed amendments dealing with trading in securities of U.S. over-the-counter (OTC) issuers, which was proposed in light of requirements adopted by the BC Securities Commission (BCSC) to prevent abusive or illegal trading in U.S. OTC markets. The proposed IIROC amendments aimed to prevent any abusive or illegal trading migrating from B.C. to other parts of Canada, as a result of the BCSC rule.
However, IIROC notes that, since then, “there has been no discernible indication that the improper trading activity meant to be prevented by the proposed amendments has migrated to parts of Canada outside of British Columbia as initially contemplated.” As a result, it’s dropping its proposed amendments.
Additionally, it will not be pursuing proposed revisions to the definition of the term “securities related activities” in its dealer rules. “Due to concerns raised by public commenters and by staff of the Canadian Securities Administrators during and subsequent to the public comment process,” IIROC has decided to leave the existing definition unchanged, it notes.