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. To fulfill our mandate as a national self-regulatory organization, we must act with integrity, transparency and fairness.
What IIROC Does:
- Writes rules that set high regulatory and investment industry standards.
- Screens all investment advisors employed by IIROC-regulated firms to ensure they are of good character, are properly trained and have successfully completed all the required educational courses, background checks and programs.
- Conducts financial compliance reviews and sets minimum capital requirements to ensure that firms have enough capital for the specific nature and volume of their business. This reduces the possibility of firms failing by preventing excessive leverage and risky business practices. (IIROC-regulated firms also participate in the Canadian Investor Protection Fund which protects individual investors in the unlikely event that a firm should go bankrupt.)
- Conducts business conduct compliance reviews to check that firms have procedures in place to properly supervise the handling of client accounts and that advice and transactions appropriately reflect the client’s needs and instructions. IIROC-approved advisors must follow suitability and “know your client” rules by being familiar with a client’s financial situation, investment needs, objectives, investing experience and tolerance for risk.
- Conducts trading conduct compliance reviews to check trading firms' trade-desk procedures. The reviews assess whether trade-desk procedures comply with the Universal Market Integrity Rules (UMIR) and applicable provincial securities law.
- Conducts market surveillance and trading review analysis to ensure that trading is carried out in accordance with UMIR and applicable provincial securities law.
- Investigates possible dealer or marketplace misconduct by its dealer firms, approved persons and other market participants and can bring disciplinary proceedings which may result in penalties including fines, suspensions and permanent bans or terminations for individuals and firms. (Money from fines and settlements is contributed to IIROC’s restricted fund, which IIROC uses to fund capital expenditures necessary to address emerging regulatory issues, projects relating to investor and industry education, and other uses authorized under IIROC’s Recognition Orders.)
- Money from fines and settlements is contributed to IIROC’s Restricted Fund, which IIROC uses to fund reasonable costs associated with the administration of IIROC’s hearing panels, capital expenditures necessary to address emerging regulatory issues, projects relating to investor and industry education, and other uses authorized under IIROC’s Recognition Orders. IIROC’s
Restricted Fund Policy sets out the guiding principles that IIROC uses to allocate Restricted Funds, the process by which IIROC management reviews and the IIROC Corporate Governance Committee approves uses of Restricted Funds, and the requirements for external requests for funding from the Restricted Fund.