ANNUAL REPORT 2021‑2022

Message from the Chair

Paul Allison

It’s been a remarkable year for IIROC, despite the challenges brought on by the COVID-19 pandemic. After over two years of coping with this virus, the path back to a more normal world is starting to come into view. While uncertainty and challenges persisted throughout 2021, IIROC had a productive and successful fiscal year. We continued to execute on the priorities outlined in our three-year strategic plan while providing value to Canadian investors and enhancing securities regulation across Canada.

We accomplished a lot;

  • We reached a major milestone when Newfoundland and Labrador adopted enhanced investor protection rules, granting IIROC additional powers to do its job. This means that every province and every territory has given us fine collection powers through the courts – from coast to coast to coast.
  • The expansion of mandatory client identifiers to Canada’s equity as well as debt markets now provides for a far more comprehensive and timely view of market activity, enhancing our capability to perform both market monitoring and investigations.
  • Our Dealer Member Rules were rewritten, reformatted and reorganized in plain language and took effect December 31, 2021.
  • IIROC and the Montreal Exchange entered a Memorandum of Understanding to enable cross-asset monitoring of the derivatives and underlying cash markets in Canada.

Since October 2013, I’ve had the privilege of working closely with IIROC’s exceptional people, and they are second to none. The Board and I are proud of how IIROC’s team, under the dedicated leadership of Andrew J. Kriegler and his executive team, upheld its governance and key strategic oversight practices and worked tirelessly on our strategic priorities.

As I wrap up my last term serving on IIROC’s Board, I’d like to thank my fellow Board members for their oversight and counsel. This year, we had a new board member join us, Debra Doucette, and a familiar face return, Edward Iacobucci, who brought a wealth of industry experience and have made exceptional contributions. The IIROC family was also very saddened by long-standing board member, Malcolm Heins’s passing in May 2022 after a lengthy battle with cancer. We are especially thankful for the passion he carried to support Canadian investors. His dedication leaves a lasting impact, and he will be greatly missed.

As I close this chapter as IIROC’s Chair of the Board, I can say with confidence that I’m extremely proud of the Board’s collective efforts to make this year such a success.

As an organization, we have an exciting and transformative road ahead. We continue to make great strides together with the Canadian Securities Administrators (CSA) and Mutual Fund Dealers Association of Canada (MFDA) to make the new self-regulatory organization more efficient and effective, ultimately leading to better outcomes for Canadians and for the investment industry. We’re looking forward to the opportunities the new SRO will create—from increasing access to advice to better protecting investors. This year has further solidified the important purpose of our work to strengthen the self-regulatory model for Canadians. It’s what Canadians and the industry that serves them deserve.

This is a transformative time for Canadian securities regulation. As we look to the future, I have no doubt that our clear sense of purpose will continue to be our greatest strength.

Paul D. Allison
Chair of the Board

Responded to

2323

business conduct related investor enquiries

715

business conduct related complaints

585

trading related investor enquiries

551

trading related complaints

Responded through IIROC’s Complaints and Inquiries department, which includes front-line staff in Calgary, Toronto, Vancouver and Montreal

As I close this chapter as IIROC’s Chair of the Board, I can say with confidence that I’m extremely proud of the Board’s collective efforts to make this year such a success.

Report from the President and CEO

Andrew Kriegler

Although we couldn’t have predicted it, last year was another year defined by the COVID-19 pandemic. 2021 reinforced that the pace of change and disruption has accelerated significantly in recent years and IIROC responded by evolving as the world changed. Throughout it all, we remained focused on our core mandate: to deliver regulation effectively. While technology allowed us to stay connected, be productive, and remain focused on our work, it is also fair to say that we missed in-person interaction. As of May 2022, we cautiously made our way back into the offices, taking a hybrid approach, and will continue to adapt accordingly.

Amidst all of this transformation, I continue to be proud of the ways in which our team made progress on several important initiatives this past fiscal year. We demonstrated resilience as we adapted to meet the challenges the pandemic brought on, IIROC continued to thrive, and we accomplished a great deal.

A major milestone of this past year was the fact that IIROC completed its quest to be able to enforce fine collection through the courts in every province and territory across the country. In November 2021, IIROC welcomed the Government of Newfoundland and Labrador’s passage of Bill 16, An Act to Amend the Securities Act, that strengthens investor protection and safeguards seniors and vulnerable retail investors. With the passage of these legislative amendments, Newfoundland and Labrador has ensured that every province and territory in the country has taken substantial steps to protect Canadian investors and foster healthy Canadian capital markets.

In December 2021, IIROC, the Montréal Exchange (MX), and the Canadian Derivatives Clearing Corporation entered a Memorandum of Understanding to enable cross-asset monitoring of the derivatives and underlying cash markets in Canada. Looking ahead, this collaboration between IIROC and the MX will allow our surveillance teams to work together to strengthen market integrity and further support our ability to share and transmit data and information relating to cross-asset trading and address problematic trading practices. Together with the MX and with the support of our colleagues at the Canadian Securities Administrators (CSA), this new capability will significantly improve market regulation in Canada.

We also continue to make great strides together with the CSA and Mutual Fund Dealers Association of Canada (MFDA) to create a single, new, enhanced self-regulatory organization (SRO) on January 1, 2023.

A new, enhanced, pan-Canadian SRO will increase access to advice while better protecting investors. It is precisely what Canadians and the industry that serves them deserve. I was honoured to have been selected by the Special Joint Committee and approved by the Boards of both SROs to lead this new organization when it is formed.

While there are too many other notable achievements to list, none would have been possible without the heart of our organization—our people. I’d like to thank my colleagues on the management team, the IIROC Board and most of all our talented employees for their dedication.

My appreciation goes out to IIROC’s Board of Directors for their ongoing engagement, counsel, and support over the past year. In particular, I would like to thank Holly Benson, who retired from the IIROC Board after serving for almost seven years. I would also like to note with sadness the passing of Malcolm Heins in May 2022 after a battle against cancer. He was an instrumental member of IIROC’s board, committed himself to our mandate and was a strong advocate for investors. IIROC offers our deepest sympathy to Malcolm’s family and loved ones.

I would also like to extend my thanks and a warm welcome to Debra Doucette and Edward Iacobucci new and returning board members, respectively. We are grateful to have such talented and experienced colleagues with us at this time in IIROC’s history—a time punctuated with significant challenges but also tremendous opportunity as we move to stand up the new SRO with the MFDA.

Finally, I would like to extend my gratitude to our team. From coast to coast, you continue to make us proud. You have risen to the challenges this year has presented and your daily drive to help protect investors and support healthy Canadian capital markets does not go unnoticed. The organization emerged from this past year strong due to everyone’s collective efforts.

As normality resumes and we enter a new fiscal year, we’re moving forward with a greater sense of hope and confidence. As phenomenal as last year was, I’m optimistic about the organization’s future and look forward to an even better year ahead.

Andrew J. Kriegler
President and CEO

30

Educational Webcasts (15 English, 15 French)

24612

industry participants viewed exisiting webcasts

3

Live Virtual Conferences* were attended by 1,177 industry participants

*EDI-AR, Quebec Bill 64, IIROC/IIAC Innovation Forum
We also continue to make great strides together with the CSA and Mutual Fund Dealers Association of Canada (MFDA) to create a single, new, enhanced self-regulatory organization (SRO) on January 1, 2023.

By the Numbers: Trading

1547

Coordinated trading halts

83

Coordinated cease trade orders

92

Single Stock Circuit Breakers triggered

Intervened by varying or cancelling trades

54
times
affecting
796

transactions

606325883

Trades monitored on 6 stock exchanges (operating 10 separate venues) and 5 equity Alternative Trading Systems

76

Business Conduct Compliance firm reviews conducted

84

Financial and Operations Compliance firm reviews conducted

35

Trading Conduct Compliance firm reviews conducted

1

Integrated on-site compliance firm review conducted


IIROC Enforcement’s Current Legal Authority and Protections

IIROC has made significant progress in the following jurisdictions to strengthen investor protection.

The table on the following page outlines the details of the legal authority map depicted below.

Newfoundland and Labrador New Brunswick
IIROC’S Current Legal Authority Across Canada
Province / Territory Date / Legal Authority
Yukon November 2018: collect fines and collect/present evidence
Northwest Territories November 2018: collect fines and collect/present evidence
Nunavut November 2018: collect fines and collect/present evidence
British Columbia May 2018: collect fines
Alberta June 2000: collect fines
June 2017: collect/present evidence and statutory immunity
Saskatchewan May 2019: collect fines
Manitoba June 2018: collect fines and statutory immunity
Ontario May 2017: collect fines
Quebec June 2013: collect fines
June 2018: collect/present evidence and statutory immunity
New Brunswick December 2019: collect fines, collect/present evidence and statutory immunity
Nova Scotia October 2018: collect fines, collect/present evidence and statutory immunity
Prince Edward Island January 2017: collect fines
December 2018: collect/present evidence and statutory immunity
Newfoundland and Labrador November 2021: collect fines, collect/present evidence and statutory immunity