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IIROC History & FAQ



IIROC was established as a non-profit corporation on June 1, 2008 through the consolidation of the Investment Dealers Association of Canada (IDA) and Market Regulation Services Inc. (RS). For more information, please see the original Information Circular.


FAQ

What are the main responsibilities of IIROC?

Which firms and activity does IIROC regulate?

How is IIROC funded?

What is IIROC’s role in reviewing an investor's complaint?

How do I file a complaint?

How does IIROC or my investment dealer respond to investor complaints?

Which kind of penalties may be imposed?

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 statistics on the securities industry in Canada?

Tell me more about IIROC’s predecessor organizations, the Investment Dealers Association of Canada (IDA) and Market Regulation Services Inc. (RS)

What are the main responsibilities of IIROC?


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 market integrity rules regarding trading activity on Canadian equity marketplaces.

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Which firms and activity 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 (SRO) if they wish to operate in Canada. Prior to the early 1990s, membership in an SRO was voluntary. Today, although the term ‘member’ is still widely used to describe firms regulated by IIROC, membership is no longer voluntary.

IIROC also regulates trading activity on debt and equity marketplaces in Canada, including all exchanges and alternative trading systems (ATSs), under a single set of rules.

Under Canada’s regulatory framework, a provincial securities regulator regulates an exchange directly. This includes, for example, governance of exchange activities, approval of their rules, market models and listing standards, and oversight of their systems capacity and integrity. Exchanges can regulate the trading activities on their own market or outsource regulatory functions to an independent regulation services provider through a contractual arrangement.

Under CSA rules, ATSs cannot regulate trading activities on their own marketplace and must sign a regulation services agreement with an independent regulation services provider. Currently, IIROC is the only independent regulation services provider for Canadian equity marketplaces.


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How is IIROC funded?


IIROC operates on a cost-recovery basis, charging dealer firms an annual fee based on the firm’s capital, number of registrants, trading activity and revenues. The Dealer Member and Marketplace fee models are both guided by the principles of fairness, transparency and industry competitiveness.

See our current fee models for Dealers and Marketplaces


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What is IIROC’s role in reviewing an investor's complaint?


As an SRO, IIROC's role is to determine whether breaches of IIROC’s rules have occurred and to take appropriate regulatory action against dealer firms, approved persons, access persons or participants. Disciplinary action may result in the imposition of disciplinary penalties.


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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 you 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 these complaints. Visit our Making a Complaint area in the Investors section of the website for a more detailed explanation of the complaints process.


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How does IIROC or my investment dealer respond to investor complaints?


We encourage investors to inform us of their complaints. It’s important so we can take regulatory action where rule infractions have occurred. Every complaint that IIROC receives is reviewed by IIROC staff, who will respond to indicate what the next steps will be. Not all complaints will proceed to an investigation. IIROC may also pursue other courses of action, including issuing a warning letter to the firm or individual in question or referring the case to other regulatory or police authorities.

When handling complaints, IIROC-regulated firms must comply with IIROC rules, which stipulate how and within what timeframe firms must respond to clients. Even with service complaints, where rule infractions are not alleged, IIROC rules require firms to respond in writing to all written complaints.

Disciplinary proceedings may be brought against registered employees or the firm, as evidence warrants.


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Which kind of penalties may be imposed?


Penalties for registered employees at IIROC-regulated firms can include:

  • A reprimand;
  • Fines, up to a maximum of $1 million per contravention or an amount equal to three times the profit made, or loss avoided, due to the contravention;
  • Imposition of conditions on current approval in one or more categories of employment;
  • Suspension of current approval in one or more categories of employment for any period of time and upon any conditions or terms;
  • Prohibition of the right to seek future approval in one or more categories of employment;
  • A ban, permanent or for a specific period of time, on approval in any or all categories of employment; and
  • Any other fit remedy or penalty.

 Penalties for firms regulated by IIROC can include:

  • A reprimand;
  • Fines, up to a maximum of $5 million per contravention or an amount equal to three times the profit made or loss avoided due to the contravention;
  • Imposition of conditions on membership;
  • Suspension for any period of time and upon any conditions or terms;
  • Expulsion; and
  • Any other fit remedy or penalty.

When an IIROC Hearing Panel determines an appropriate penalty, it considers the general principles and guidelines below. These principles and guidelines may be taken into account when determining the appropriate sanction to be imposed as part of a Settlement Agreement or at the end of a disciplinary hearing.


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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 the IIROC AdvisorReport or visit the Enforcement section of our website for more information.


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Does it cost anything to file a complaint?


No. IIROC does not charge a fee for reviewing complaints against firms or their registered employees.


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How long does it take to review a complaint?


All complaints submitted to IIROC are reviewed as soon as possible. While it is possible to provide a determination on straightforward complaints within three months, complex matters may take longer.


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Where can I go for further statistics on the securities industry in Canada?


For information regarding the securities industry in Canada, including statistics and economic data, please contact any of the following:

The Investment Industry Association of Canada (IIAC) is the professional association for the industry. The IIAC has a mandate to promote efficient, fair and competitive capital markets in 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.


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Tell me more about IIROC’s predecessor organizations, the Investment Dealers Association of Canada (IDA) and Market Regulation Services Inc. (RS)


The Investment Dealers Association of Canada (IDA) was formed in 1916 when a group of Toronto bond dealers created the Bond Dealers Section of the Toronto Board of Trade. Over the years, the IDA evolved into a decentralized national self-regulatory organization with a dual regulatory and trade association mandate. Its work was carried out through an extensive structure of national and regional committees representing a diversity of business and geographic perspectives. Starting in the 1990s, provincial regulators recognized the IDA as a self-regulatory organization for full service investment dealers and their registered employees. Securities legislation was introduced to require membership in a self-regulatory organization, which had previously been voluntary, to be mandatory for any firm wishing to operate as a full service securities dealer in Canada. The trade association role was eliminated in 2006, with the creation of a separate and independent trade association called the Investment Industry Association of Canada (IIAC).

Launched on March 1, 2002, Market Regulation Services Inc. (RS) was created as a joint initiative of TSX Group and the Investment Dealers Association of Canada (IDA). RS amalgamated the in-house surveillance, trade desk compliance, investigation and enforcement functions of the TSX and TSX Venture Exchanges to produce a new single, neutral entity to monitor and enforce trading rules on all marketplaces.


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