IIROC proposes OEO eligibility amendments

IIROC firms that offer order-execution-only services are the subject of recently published proposed amendments.

Specifically, IIROC is requesting comments on proposed amendments to Dealer Member Rule 3200, Minimum Requirements for Dealer Members Seeking Approval Under 1300(T) to Offer an Order-Execution Only Service.

The amendments address IIROC’s concern that the use of order-execution-only services (OES) may present risks similar to other methods of third-party electronic access.

For example, the proposed prohibition on OES dealers from providing OES to registered dealers would help ensure that registered dealers use appropriate channels to access marketplaces for their registration category, says the notice—channels where they’re subject to IIROC rules.

Amendments for OES dealers to identify “registered advisers” and “foreign adviser equivalents” with control over OES accounts would improve IIROC’s surveillance capability and better address electronic trading risks, the notice says.

Though proposed amendments would prevent registered dealers from using OES to trade, registered dealers would retain the options to trade through a participant on an intermediated basis, or to become registered as an investment dealer and IIROC member and trade through a routing arrangement, the notice says.

To comply with proposed amendments, OES dealers would be required to develop associated policies and procedures. Further, participants that execute for OES dealers may need to modify their systems to accommodate the expanded use of proposed identifiers, the notice says.

Comments to proposed amendments must be submitted by Oct. 24.

Read the full notice and request for comments.

Also read:

IIROC seeks second round of comments on client identifiers

IIROC takes action as advice evolves

Former IIROC rep fined over unauthorized discretionary trading

Staff

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