Response suggests that plans have potential to cause disorder and further consultations are needed
The Investment Funds Institute of Canada has called into question proposals contained within the IIROC ‘s (Investment Industry Regulatory Organization of Canada) white paper entitled The Public Policy Implications of Changes to Rules Regarding Proficiency Upgrade Requirements and Directed Commissions on the IIROC platform.
As part of its submission, the IFIC has suggested the IIROC should not proceed with scrapping the so-called 270 Day Rule and wants further work looking into understanding implications that allow advisors to direct portions of commissions to a personal corporation.
The submission outlines that it would not be in the interest of the public for the rule that states firms and advisors operating under IIROC registration be fully qualified to full investment rep status within 270 days, to be scrapped. If the rule were scrapped it would allow individuals and firms to offer only ETFs and mutual funds – something Joanne De Laurentiis, CEO of the IFIC, disagrees with.
“The proposal might create efficiencies for some members of IIROC; however, it would destabilize the MFDA and its membership, causing a disorderly and costly restructuring of the SRO regulatory system,” she said.
“We agree that the future structure of the SROs is an important and legitimate question to consider, especially in light of the imminent Capital Markets Regulatory Authority, but such major structural change should occur through a deliberate, fulsome process rather than as a supplemental outcome of a specific rule change.”
As for the proposal on directed commissions, the IFIC stated that it would be of interest of financial advisors but further consultation and analysis is needed.
As part of its submission, the IFIC has suggested the IIROC should not proceed with scrapping the so-called 270 Day Rule and wants further work looking into understanding implications that allow advisors to direct portions of commissions to a personal corporation.
The submission outlines that it would not be in the interest of the public for the rule that states firms and advisors operating under IIROC registration be fully qualified to full investment rep status within 270 days, to be scrapped. If the rule were scrapped it would allow individuals and firms to offer only ETFs and mutual funds – something Joanne De Laurentiis, CEO of the IFIC, disagrees with.
“The proposal might create efficiencies for some members of IIROC; however, it would destabilize the MFDA and its membership, causing a disorderly and costly restructuring of the SRO regulatory system,” she said.
“We agree that the future structure of the SROs is an important and legitimate question to consider, especially in light of the imminent Capital Markets Regulatory Authority, but such major structural change should occur through a deliberate, fulsome process rather than as a supplemental outcome of a specific rule change.”
As for the proposal on directed commissions, the IFIC stated that it would be of interest of financial advisors but further consultation and analysis is needed.
