IIROC is seeking comment on a proposal that would allow firms and individuals to conduct, under IIROC’s regulatory oversight, a business that is limited to mutual funds and exchange-traded funds.
Under this approach, IIROC would:
1. Eliminate its current requirement for firms and individuals to be qualified to offer a full range of investment products, and instead allow firms and individuals to offer only mutual funds and exchange-traded funds (with appropriate adjustments for the relative risk of such firms and individuals to IIROC’s proficiency, supervisory and oversight requirements); and
2. Allow all firms and individuals under IIROC’s regulatory oversight to take advantage of what is referred to as “directed commissions”.
IIROC has released a white paper that provides detailed background to these concepts and this illustrative proposal, and identifies a number of policy considerations that stakeholders may wish to take into account in answering the following questions:
1. Would you support this proposal as being in the public interest?
2. What impact would the adoption of this proposal have on investors, registered firms, registered individuals, and Canadian regulatory and financial industry structure; and how should these impacts be addressed?
IIROC has not consulted with the Canadian Securities Administrators (CSA) in developing this proposal, nor has the CSA expressed any view concerning whether or not any element of the proposal has merit, or whether or not it is in the public interest either in the short or long term.
Any concrete rule changes that follow from this process would be subject to public comment and to CSA approval, and consultation with all affected stakeholders.
Comments are requested by March 31, 2016.