IIROC considers reimbursing wronged investors

By James Langton | June 29, 2020 | Last updated on June 29, 2020
2 min read

The Investment Industry Regulatory Organization of Canada (IIROC) is considering returning money to harmed investors as part of its enforcement process.

In a notice setting out its priorities for the current year, the self-regulatory organization (SRO) said it is launching an initiative to help investors who suffer losses due to industry misconduct.

Currently, IIROC does not have the authority to provide restitution to harmed investors.

“We will be exploring if there are ways to return to investors disgorged funds collected from an advisor or firm disciplined by IIROC,” it said.

Following its review of the issue, IIROC will publish proposals for public comment.

Additionally, the SRO said that it will be reviewing complaint-handling practices.

“Later this year, IIROC, with the assistance of an independent research firm, will interview individual complainants confidentially in order to improve its complaint handling process,” it said, adding that it will also collect input from investors on restitution issues during this exercise.

In the year ahead, IIROC will also be working to establish its investor advisory group, the Expert Investor Issues Panel (EIIP), to provide it with another mechanism for incorporating investor feedback into its policy efforts.

Additionally, IIROC will continue to work with the provincial regulators on issues such as financial planning regulation and title reform, it said, as well as implementing the client-focused reforms.

Alongside investor protection, the SRO’s other main priorities for the coming year include continuing to cope with the effects Covid-19 and the prospect of SRO reform.

Last week, the Canadian Securities Administrators (CSA) launched its consultation on the self-regulatory framework.

Other initiatives on IIROC’s agenda for the year include ongoing derivatives reform, a study on failed trades and developing crypto trading regulation along with the CSA.

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James Langton

James is a senior reporter for Advisor.ca and its sister publication, Investment Executive. He has been reporting on regulation, securities law, industry news and more since 1994.