Investors support proposed IIROC enforcement alternatives, survey finds

The majority of respondents said the proposed fines for minor rule violations were too low and should be raised

A majority of Canadian investors surveyed for the Investment Industry Regulatory Organization of Canada (IIROC) support the regulator’s proposals for alternatives to enforcement, IIROC announced Thursday.

These alternatives would encourage early settlements and divert minor violations away from lengthy court hearings.

Disciplinary proposals panned

The survey of 1,011 investors, part of IIROC’s public consultation on the proposals it published earlier this year, found that 76% support an early settlement program that would encourage settling a portion of disciplinary cases before they reach an IIROC panel.

In addition, 63% of respondents support more flexibility in dealing with minor violations (including inadvertent actions that cause minimal harm to investors), and 70-85% agree that serious violations, which demonstrate a pattern of malfeasance or cause serious harm to investors, should result in a formal hearing before an IIROC panel.

The majority of investors surveyed said the proposed fines for minor rule violations ($2,500 for individuals and $5,000 for firms) were too low and should be raised. More than half also said IIROC should publish the names of firms or individuals in all cases, including minor violations.

Many investors indicated that the proposals would increase IIROC’s effectiveness and boost their confidence in investing, the Canadian financial services industry, and the regulation of the industry and markets.

“It’s important that Canadian investors have a voice and the ability to provide their input on our regulatory proposals,” Elsa Renzella, senior vice-president, registration and enforcement, says in a statement. “We will carefully consider this input, along with the comments received, in refining our alternative discipline proposals.”

Support for IIROC’s proposals is not universal, and the investment industry and investor advocates have expressed their concerns to the self-regulatory organization.

Recent Posts

See All

CSA to ban DSCs everywhere but Ontario

Ontario is considering alternatives to a DSC ban, but will join the CSA in outlawing trailers for discount brokers Ontario will remain a holdout, but the rest of Canada’s securities regulators are mov