IIROC rolls out new fee models

By Staff | March 29, 2012 | Last updated on March 29, 2012
2 min read

The Investment Industry Regulatory Organization of Canada (IIROC) is implementing new fee models for both market and dealer regulation, effective April 1.

Under the new dealer regulation fee model, the regulator says 25% of firms will see their fees decline, while 37% will pay more.

The minimum firm fee will rise for the first time in a decade, from $25,000 to $27,500.

“We developed the new fee models based on the principles of fairness, transparency and industry competitiveness,” said Susan Wolburgh Jenah, president and CEO, IIROC.

“We recognize that these are challenging economic times and we are committed to prudent fiscal management while ensuring that we have the appropriate tools to fulfill our regulatory mandate in an effective manner.”

For both the dealer regulation model and the market regulation model, member’s share of fees paid will take into account that firm’s usage of IIROC’s regulatory resources.

For the dealer regulation model, fees are determined by a firm’s revenue tier and number of IIROC-registered staff.

Firms that are deemed to be higher risk will pay “a modest risk premium” to help defray the higher costs of compliance oversight.

Under the new market regulation model, a dealer’s fees will be based on its share on each marketplace of the total number of messages processed by IIROC’s surveillance system for technology costs, as well as its share on each marketplace of the total number of trades for all other costs.

IIROC is one of the first financial regulators globally to propose and implement recovering technology costs based on messages. Approximately 85% of firms will see a decrease based on the new market regulation model, while 15% of firms will experience a fee increase.

For full details on the integrated fee model and its various components, please see IIROC’s February 3rd, 2012 Administrative Notice, “Approval of Integrated Fee Model” and “IIROC Fee Model Guidelines” from March 5th, 2012.

IIROC operates on a cost-recovery basis and has returned almost $12 million to the industry since 2008 in operational surpluses. Being a cost-effective organization is one of IIROC’s five priorities identified in its Strategic Plan.

Advisor.ca staff


The staff of Advisor.ca have been covering news for financial advisors since 1998.