The Investment Dealers Association of Canada has withdrawn it proposed policy establishing minimum standards for institutional accounts for revision.

On April 25, 2003 the Ontario Securities Commision published for comment the IDA’s proposed policy that ets out the minimum standards for institutional accounts. One comment letter was received on the proposals in addition to comments from Canadian Securities Administrators staff, it notes. “The comments have been addressed with the exception of one outstanding issue regarding suitability,” the OSC reports.

The IDA has informed the CSA that it has withdrawn the proposed policy and will submit a revised version, which will address the comments it received, including discussions with OSC staff on the issue of suitability for institutional accounts.

The policy was developed to fill a void in the guidance available to registered representatives and firms in dealing with customers other than retail customers. In 1993, minimum standards for retail account supervision came into force. The proposed IDA policy is supposed to do the same for institutional accounts.

The IDA’s board first approved the policy in 1996 and it was published for comment. No public comments were received, although the OSC did have some minor drafting comments at the time. However, discount brokers began seeking relief from general suitability obligations.

It was determined that until the issue of suitability was resolved in the retail business, further development of the institutional policy should be delayed and then reconsidered in the context of changes to the suitability regime.