Legal Issues

Financial wrongdoers beware: if IIROC has its way, you can’t run, and there will be less room to hide.

In the SRO’s annual report, president and CEO Andrew Kriegler says IIROC is working with other regulators to better enforce sanctions against reps and collect fines. He says IIROC is working to “exchange information and implement mutual recognition of disciplinary actions to better protect investors.”

IIROC has formal information-sharing agreements with the Chambre de la sécurité financière in Québec, the Financial Services Commission of Ontario and the Insurance Council of British Columbia.

Read: FPSC, ICBC to share info on disciplinary actions

The goal of such collaboration is to “ensure that sanctioned individuals could not work in another registered capacity in the financial services industry, and could not avoid payment of a monetary sanction once they have left the industry.”

An Advisor.ca investigation released in June found that advisors permanently banned by IIROC and MFDA remained authorized to sell life insurance products for periods ranging from six months to years after their bans.

Read: How banned IIROC and MFDA advisors can still sell insurance

As for monetary sanctions, IIROC only collected 16% of fines assessed against individuals in 2015-2016, up from 13.3% in 2014-2015. Nevertheless, the regulator has been unable to collect more than $28 million in fines against sanctioned individuals across the country since 2008.

By contrast, IIROC collected 87% of fines against firms in 2015-2015; the previous year, the SRO stated that it “typically collect[s] 100% of fines and other penalties levied against firms across the country.”

Building on a statement made in last year’s annual report, Kriegler says the regulator “will continue to pursue the power to collect our fines through the courts.”

IIROC’s financials

Total revenue was $90.7 million in 2015-2016, up 2% from the previous year. But revenue from dealer regulation was down 1%, thanks in part to lower entrance fees and underwriting levies.

Dealer regulation operating costs rose 5%, with total expenses rising 3% to $84.5 million. The SRO’s net income was $6.1 million, down 8%.

Read: IIROC imposed more sanctions in 2015

The SRO had 180 dealer members as of March 31, 2016, of which 170 were in good standing, 3 were in the resignation process, and 7 were suspended. That’s down from 187 total dealer members as of March 31, 2015.

Originally published on Advisor.ca
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