IIROC has a lacklustre record of collecting fines levied against individuals, but that could soon change.
In remarks made to the Ontario Standing Committee on Finance and Economic Affairs, IIROC president and CEO Andrew Kriegler made his case for new enforcement powers.
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“We are pursuing an amendment to the Securities Act to permit IIROC to more effectively collect fines in Ontario. Such an amendment would give us the ability to enforce hearing panel sanctions through the Ontario Superior Court of Justice,” says Kriegler.
“Such an enforcement tool would send a strong and credible message of deterrence and would advance IIROC’s public interest mandate. It would also foster investor confidence in the regulatory system and it would do so at no material cost to government or taxpayers.”
Kriegler notes that while some rule-breakers don’t pay because they don’t have the money, others skirt fines by ceasing to be IIROC registrants. “In Ontario, we have no ability to collect beyond that point – regardless of what they have done, or how much money they owe. This is wrong. If you break the rules and abuse the trust your clients have placed in you, you must pay the penalty and be seen to pay it,” he says.
All of this stands in contrast to the situation in Alberta and Quebec, adds Kriegler. “[T]hrough their respective Securities Acts, [they] have given [IIROC] the power to pursue these wrongdoers. Unsurprisingly, our collection rates in those two provinces are considerably higher than our national rate.”
That IIROC needs more teeth is clear from the stats:
- Nationwide the collection rate for firms is 100%, compared to only 20% for individuals
- In Ontario, there is over $20 million in outstanding fines against individuals (since 2008)
- The Ontario collection rate for individuals for the current fiscal year is only 2%
- Ontario represents 61% of the total amount of outstanding fines on a national basis in this fiscal year.