There are two different tracks for substantive and non-substantive rule change proposals.
Substantive Change Rules
Once the Rules are drafted and reviewed for plain language they are passed on to the Policy Department to process using the normal rule development process. This involves the membership consultation process using established industry committees such as the FAS and its sub-committees, the CLS and its sub-committees and MRAC. In addition to the normal development process, the project Steering Committee is also posting the Rules to the Members Only Website section for Member review and comments before the Rules are finalized.
Non-Substantive Change Rules
IIROC has developed a detailed Rule development and review process. The process starts with the SMEs reorganizing, restructuring and re-writing the Rule in plain language. In addition to drafting the Rules, the SMEs prepare a Table of Concordance (TOC) for each Rule. The draft is then reviewed by the project consultant and the project director. When approved, the draft is passed to the Policy Department for review and comments or amendments. Following that, the draft is submitted to Wordsmith Associates for plain language review. The document is then passed back to Policy (for a second review) to ensure that the meaning and the intent of the Rule has not inadvertently changed as a result of the plain language writing. The Rule is then sent to the project consultant and director for a second review before it is passed on to the Department VP (with primary responsibility for the Rule) and then the Senior Vice President for review and feedback.
The project director will then submit the Rules to the Rule Book Steering Committee for final approval before they are sent to translation. Once translated, the non-substantive change Rules are posted to the Members Only Website section (for 30 days) for review and comments.
At the same time that IIROC staff post a Rule to the MOW section, staff submit the draft Rule to the CSA staff along with Table of Concordance and a covering memo. All submissions to the CSA are in English and French except for the TOC which will only be translated when it is finally completed. The CSA staff are carrying out an informal pre-approval review of these non-substantive change Rules and provide us with their feedback.
IIROC Board Approval
The IIROC Board will approve the individual Rules in tranches as and when they are completed. We are currently considering the staging of IIROC Board approval of the new Rules and publication for public comments to ensure that we provide adequate period for such comments to be received.
CSA Review and Approval
We have committed to keeping the CSA informed of the status and progress of the project. They have been consulted on the procedures we have put in place for substantive and non substantive change Rules. While the substantive change Rules will follow the normal rule development process in which the CSA plays a critical part, IIROC undertook to provide the CSA staff with copies of the non-substantive change Rules prior to their finalization for their pre-approval review.
IIROC also undertook to provide the CSA with a cover memo that explains the changes made to each Rule and a certification that those changes do not amount to anything substantive.
This process will assist the CSA in approving the Rule Book package when it is finally submitted to them following IIROC Board approval and publication for public comments.
Project Timelines
IIROC Board of Directors will be reviewing and approving the new Rules in 8 tranches or related rules (substantive and non-substantive change). This will be done over a period of 12 to 18 months starting January 2010.
The first tranche was approved by the Board on January 26, 2010. The tranche consisted of two large business conduct (substantive change) rules. They were Rule 3100 Business Conduct and Rule 3200 Client Accounts. The Rules were published for a 90-day public comments period and forwarded to the CSA for approval on March 26, 2010.
Two more tranches of the new Rules (series 2000 and 4000) were approved by the Board on April 30, 2010. On June 24, 2010, the Board also approved two more tranches (part of series 3000 and 5000).
None of these new rules will become effective until all the new rules are approved by the CSA.