What we did
Continued to strengthen IIROC’s enforcement efforts as a public interest regulator.
How we did it
Published IIROC’s third Annual Enforcement Report in March 2015, reporting on our activities and progress in 2014. The report provides an overview of IIROC’s enforcement priorities, including seniors, vulnerable investors and supervision, as well as highlights of key enforcement cases and policy initiatives.
Why it matters
Publishing annual results supports IIROC’s commitment to transparency and sends a strong regulatory message to potential wrongdoers.
Finalized a framework to serve as a guide in determining sanctions in disciplinary proceedings.
Following review of written public comments received in 2014 to IIROC’s proposed revised Sanction Guidelines and companion Staff Policy Statements, hosted a roundtable meeting in April 2014 for discussion with commenters.
Published the Guidelines and related Staff Policy Statement in final form in January 2015 to take effect February 2, 2015.
Disciplinary proceedings serve to maintain high standards of conduct and to protect market integrity. Sanction Guidelines promote consistency, fairness and transparency by clearly communicating how IIROC will approach sanctioning decisions.
Continued to work to improve fine collection rates from individuals sanctioned by IIROC.
Began publishing in June 2014 the names of individuals with outstanding fines, as part of a quarterly Unpaid Fines Report on IIROC’s website.
Making this information public improves transparency and sends a deterrent message to wrongdoers.
Conducted a “mystery shopping” initiative in conjunction with the Ontario Securities Commission and the Mutual Fund Dealers Association of Canada.
Completed the mystery shopping exercise following development of the methodology – including setting scenarios, developing questionnaires, creating an evaluation framework, and determining the specific criteria for assessing the quality of advice and the investor experience.
The project focused on critical aspects of the initial client-registrant interaction including the collection of client information (know-your-client, sales practices, suitability assessment and the overall quality of advice).
It is important to gain insights into typical experiences of retail investors when seeking investment advice from licensed securities advisors so that IIROC can use this research to inform policy making and investor and member education.
Conducted research to gain insights into the investor experience with the know-your-client (KYC) process.
Convened focus groups in early 2015 in Toronto and Montreal, with groups of investors organized according to life stages (young investors, mid-career investors, pre-retirement investors and retired investors). The sessions delved into investor perceptions of the KYC process, with investors reviewing various KYC questionnaires, and facilitated discussions about the information collected when opening a retail account.
Research, combined with mystery shopping results and other inputs, will help inform future regulatory responses and IIROC’s investor and member education efforts.
It is important for investors and advisors to discuss the importance of providing/collecting appropriate information before investment decisions are made.
Focused on identifying risks among firms and working with them to resolve these issues.
Issued Risk Trend Reports on July 31, 2014 and held follow-up meetings with senior executives of all high-risk IIROC-regulated firms to discuss key considerations and recommendations for addressing risks. IIROC met with 21 of the 23 firms identified as high risk; the two firms without meetings resigned their memberships.
Identifying potential risks and proactively working with firms to address these issues can prevent the need for regulatory intervention and harm to investors.
Continued to focus on making seniors and vulnerable investors a priority for compliance, enforcement and education.
Created an internal, multi-departmental working group dedicated to issues relevant to seniors. This initiative has spurred enhancements that enable examiners to better identify, track and test for seniors-related business practices and to review supervisory controls implemented by firms in this regard.
More than 25 per cent of disciplinary actions against individual registrants related to seniors’ issues.
Worked with the Ontario Seniors’ Secretariat to raise awareness among 11 of the largest seniors’ organizations in the province about where seniors can turn if they encounter issues and to provide resources that can help them become better informed.
Participated in the Financial Consumer Agency of Canada’s (FCAC) national financial literacy conference in November 2014 in Vancouver which featured break-out sessions to discuss strategies to help educate the public, including seniors.
At the conference, the FCAC launched a Financial Literacy Database: a searchable list of money-related websites, tools, publications, educational programs and other resources that has been widely publicized. IIROC’s investor resources are featured in the database.
Distributed more than 2,500 bookmarks promoting IIROC’s AdvisorReport and the Glossary of Financial Certifications to local community and senior centres across Ontario during a series of 25 Active Living Fairs.
Greater focus on this important area helps to proactively protect a growing segment of the investing public.
Continued to raise awareness of IIROC’s investor education resources.
Over the course of Financial Literacy Month, in November 2014, developed and promoted IIROC investor resources through various media, including:
- an editorial – Be Better Informed: Ask yourself key questions – in The Toronto Star’s Financial Literacy Month supplement.
- a new online Investor Knowledge Quiz to test investors’ understanding of investing basics and encourage them to improve their financial knowledge. Through IIROC’s ongoing partnership with the Better Business Bureau (BBB), the Quiz was promoted by the BBB and distributed through its cross-country network.
- bookmarks to highlight IIROC AdvisorReport, an online tool for researching the background and history of IIROC-registered advisors, and the Glossary of Financial Certifications. In total, 251,000 bookmarks were distributed to 335 public libraries across Canada.
Launched an improved “Internet Resources for Investors” section of the IIROC website in November 2014. There were more than 31,000 visitors to IIROC’s website in the year, with nearly 41,000 AdvisorReports produced and more than 420,000 page views.
Resources help investors make more informed decisions when choosing or working with an advisor on the IIROC platform.
Raising awareness of the tools available to investors and the public is core to helping them become more informed.
Continued to strengthen our complaint intake and resolution process.
Responded to 1,785 inquiries and complaints related to member conduct, and 739 trading-related inquiries and complaints from investors through IIROC’s Complaints and Inquiries department, which includes front-line staff in Calgary, Toronto and Montreal.
A dedicated department provides one-stop access to knowledgeable, timely and accessible responses to investor inquiries.