CIRO sketches three-year strategic vision

By James Langton | April 11, 2024 | Last updated on April 11, 2024
2 min read
Business people discuss investment project working and planning strategy on digital tablet.
AdobeStock / Natee Meepian

The collection of know-your-client (KYC) data could soon be standardized, and possibly centralized.

In its first-ever strategic plan, the Canadian Investment Regulatory Organization (CIRO) set out its aspirations for the next three years, headlined by the ongoing work to integrate the two self-regulatory organizations (SROs) that came together to form CIRO, and to harmonize their rules.

The plan “prioritizes the completion of the integration in its first year,” said Andrew Kriegler, president and CEO of CIRO, in a release.

The plan — which helps set the regulator’s agenda into early 2027 — detailed the SRO’s grander ambitions, including its plans for expanding access to advice.

“We will consider new policy to allow for greater access to advice to occur through the expansion of advice options that can be made available to investors across CIRO-regulated firms,” the SRO said in its report. “These may include hybrid and automated advice alternatives which are also more cost-efficient, more scalable and may be less personalized than those historically provided.”

The SRO also said it plans to standardize the collection and documentation of KYC information, while streamlining client disclosure.

“By limiting boilerplate disclosure and unnecessarily lengthy legal documentation, this will enhance usability for investors and reduce the process burden while continuing to ensure that all account offerings feature appropriate and consistent disclosure and investor protections,” CIRO said.

And, by standardizing the collection of KYC and other client information, CIRO said it aims to ease the administrative burden on firms while promoting “greater consistency in suitability determinations across firms and to help facilitate future greater portability of client data between dealers.”

Examples of burden reduction could include not needing to fill out applications for multiple accounts for the same client.

The SRO suggested that standardizing KYC data could also aid the compliance review process and regulatory oversight.

CIRO said it’s also aiming to modernize the industry registration regime and proficiency standards. In particular, the regulator said it’s pursuing delegation of the registration function for all reps under its jurisdiction from provincial regulators.

Other areas that may be in for change include the regulation of ETF trading, expanded cross surveillance of cash and listed derivatives trading, and possible tightening of the rules around short selling.

“CIRO’s inaugural strategic plan lays the foundation to improve the elements of the Canadian capital markets system we support by working to fill the gaps in regulation and reduce duplication and increase simplicity to an unnecessary complex system,” Kriegler said. “The plan also looks to the future and our ability to set the stage for transformational change, change which will support both the priorities of our stakeholders and our regulatory partners the Canadian Securities Administrators.”

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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.