- What is the Investment Industry Regulatory Organization of Canada (IIROC)?
- Why and when was IIROC created?
- What are the main responsibilities of IIROC?
- Who does IIROC regulate?
- How is IIROC funded?
- What is IIROC’s role in resolving an investor's complaint?
- How do I file a complaint?
- What steps does IIROC take to investigate a complaint?
- What penalties may be imposed?
- How can I get compensation?
- Will IIROC provide the disciplinary history of an individual or investment dealer firm?
- Does it cost anything to file a complaint?
- How long does it take to review a complaint?
- Where can I go for further information on the securities industry in Canada?
1. What is the Investment Industry Regulatory Organization of Canada (IIROC)?
IIROC is the national self-regulatory organization for all investment dealer firms and debt and equity marketplaces in Canada. Created in 2008 through the consolidation of the Investment Dealers Association of Canada (IDA) and Market Regulation Services Inc. (RS), 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 integrity rules regarding trading activity on Canadian equity marketplaces.
2. Why and when was IIROC created?
IIROC was created when the Investment Dealers Association of Canada (IDA) and Market Regulation Services Inc. (RS) were consolidated in June 2008. The goal of the merger was to simplify, streamline and consolidate the self-regulatory system while enhancing its quality and effectiveness, enhancing investor protection, maintaining fair, efficient and transparent markets and reducing risk to the Canadian financial system.
3. What are the main responsibilities of IIROC?
IIROC regulates the proficiency, business and financial conduct of 217 investment dealer firms and their registered employees. It also monitors in real time and on a post-trade basis trading activity on the following marketplaces for compliance with market integrity rules.
4. Who does IIROC regulate?
IIROC regulates all investment dealer firms in Canada. Securities legislation requires investment dealers to apply and be accepted for membership with a self-regulatory organization like IIROC if they wish to operate in Canada. Prior to the early 1990s, membership in an SRO was voluntary and so the term ‘member’ firm was used. Today, although the term ‘member’ is still widely used, membership is no longer voluntary. IIROC also regulates debt and equity marketplaces in Canada.
Equity marketplaces we regulate
Investment Dealer Firms we regulate
5. How is IIROC funded?
IIROC charges firms an annual fee based on the firm’s capital, number of registrants and revenues. IIROC-regulated firms have to pay the annual fees which IIROC charges or they cannot operate as investment dealers in Canada. IIROC also charges the marketplaces it regulates fees for the cost of regulation. IIROC is not the only regulator in Canada which charges the industry for the cost of regulation. Securities commissions also fund their regulatory work through fees they impose on industry participants. This means that the industry pays the costs of regulation rather than governments using public tax dollars.
6. What is IIROC’s role in resolving an investor's complaint?
As a self-regulatory organization, IIROC's role is to determine whether breaches of the By-laws, regulations or policies have occurred. If there is evidence of misconduct, IIROC will take the appropriate regulatory action against regulated firms and/or their registered employees. Regulatory action may involve the imposition of discipline penalties.
7. How do I file a complaint?
We require a written letter of complaint from the holder of the account(s) in question indicating the subject of the complaint, the issues involved and specific information regarding times, dates, and events. You may wish to fill out an IIROC Complaint Form. While an individual may file a complaint on behalf of someone else, we do require written authorization from the account holder in order to proceed with our review of the complaint. For more information, please see our section on Resolving a Complaint.
8. What steps does IIROC take to investigate a complaint?
Our investigation process includes:
- reviewing complaints received in writing;
- requesting relevant account documentation from the firm;
- conducting a full investigation if the evidence indicates the possibility of misconduct; and
- forwarding the file for disciplinary proceedings if the full investigation uncovers sufficient evidence of misconduct to proceed with regulatory action.
Disciplinary proceedings can be brought against registered employees and the firm, as the evidence warrants.
9. What penalties may be imposed?
Penalties for registered employees can include:
- A written reprimand;
- Fines of up to a maximum of $1 million per contravention or an amount equal to three times the profit made or loss avoided by reason of the contravention;
- Suspension of approval for any period of time and upon any conditions or terms;
- Terms and conditions of continued approval;
- Prohibitions of approval in any capacity for a period of time;
- Termination of the rights and privileges of approval;
- A permanent bar from approval with IIROC; and/or
- Any other fit remedy or penalty (often includes re-writing of licensing course
Penalties for firms can include
- A written reprimand;
- Fines of up to a maximum of $5 million per contravention or an amount equal to three times the profit made or loss avoided by reason of the contravention;
- Suspension of the rights and privileges of the firms(and such suspension may include a direction to the firm to cease dealing with the public) for any period of time upon any conditions or terms;
- Terms and conditions on continued Membership;
- Expulsion of the firm from IIROC ; and/or
- Any other fit remedy or penalty.
10. How can I get compensation?
If seeking compensation, clients should first attempt to reach a satisfactory settlement with the investment dealer firm.
Failing this, we suggest contacting the Ombudsman for Banking Services and Investments (OBSI), which is a free, independent and impartial resolution service. Please note, however, that in order to use OBSI, you must first go through the investment dealer’s complaint process and have attempted to resolve the dispute with the investment dealer firm. IIROC-regulated firms are required to participate fully with any investigation carried out by OBSI.
Arbitration or the civil courts would be a client’s next step in the escalation process. Please see Ombudservice and Arbitration for more information.
You may also wish to consult a lawyer to determine how best to proceed.
11. Will IIROC provide the disciplinary history of an individual or investment dealer firm?
Yes. Information about every disciplinary action taken by IIROC is available to the public. Please see Member Firm/Registrant Info Service for more information.
12. Does it cost anything to file a complaint?
No. IIROC does not charge a fee for reviewing complaints against firms or their registered employees.
13. How long does it take to review a complaint?
We try to complete our review of complaints submitted to IIROC as soon as possible. While it is possible to provide a determination on straightforward complaints within three months, complex matters may take longer.
14. Where can I go for further information on the securities industry in Canada?
For information regarding the securities industry in Canada, including statistics and economic data, please contact:
The Investment Industry Association of Canada, the professional association for the industry, has a mandate to promote efficient, fair and competitive capital markets for Canada while helping its member firms across the country succeed in the industry.
For information regarding the mutual fund industry in Canada, please contact the Investment Funds Institute of Canada