IIROC has published its annual Compliance Priorities Report outlining its key compliance and registration priorities for 2016. Over the next year, IIROC examination teams will focus on a number of important areas including the Client Relationship Model (CRM2), debt transaction reporting and best execution.
Know-Your-Client (KYC) and suitability will continue to be key regulatory priorities for IIROC given the feedback received through investor focus groups and the results of a mystery shopping initiative. In addition, the largest number of complaints IIROC receives involves unsuitable investments. In 2015, almost 50% of prosecutions against individual registrants involved violations of suitability, making it IIROC’s top matter prosecuted for the year.
IIROC continues to enhance its compliance program to reflect changes in market structure, business risks, investment products, demographics and corporate priorities. The report highlights areas that IIROC’s integrated exam teams will focus on related to member firms’ financial operations, registration requirements and business and trading conduct, with the aim of assisting firms to improve their supervision and risk management controls and systems. Under IIROC’s risk-based approach, exam teams focus on areas that present the highest risk so that firms can strengthen their compliance, supervision and risk management efforts.