Personal Financial Dealings and Outside Business Activities

IIROC Rule Changes Improve Transparency and Reduce Potential Conflicts

TORONTO, June 13, 2013 /CNW/ - The Investment Industry Regulatory Organization of Canada (IIROC) today announced that firms will have six months to implement rule amendments relating to prohibited personal financial dealings and permissible outside business activities (Attachment A). IIROC's rule amendments take effect December 13, 2013, with the exception of trustee or executor type arrangements which must be compliant by June 13, 2014.

The amendments, approved by its recognizing regulators, codify IIROC's prior position by specifically prohibiting employees and Approved Persons of IIROC-regulated dealer firms from directly or indirectly engaging in personal financial dealings with clients.  To achieve this, IIROC Dealer Member Rule 43 includes a general prohibition on engaging in personal financial dealings with clients and provides a non-exhaustive list of prohibited dealings.

The amendments to Dealer Member Rule 18.14 expand the scope of the current rules that apply to "other gainful occupations" to include all "outside business activities".  Further, the rules clarify that a Registered Representative/Investment Representative must inform their IIROC-regulated firm of any outside business activity and obtain their firm's advance approval to engage in any such outside business activity.

The rule amendments follow extensive consultations with stakeholders over the past three years and are consistent with other IIROC initiatives designed to improve relationship disclosure, enhance transparency and reduce potential conflicts.

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IIROC is the national self-regulatory organization which oversees all investment dealers and trading activity on debt and equity marketplaces in Canada. Created in 2008 through the consolidation of the Investment Dealers Association of Canada and Market Regulation Services Inc., IIROC sets high quality regulatory and investment industry standards, protects investors and strengthens market integrity while maintaining efficient and competitive capital markets.

IIROC carries out its regulatory responsibilities through setting and enforcing rules regarding the proficiency, business and financial conduct of dealer firms and their registered employees and through setting and enforcing market integrity rules regarding trading activity on Canadian equity marketplaces.

SOURCE: Investment Industry Regulatory Organization of Canada (IIROC) - General News