The model shows the comparable risk assessed for each regulated firm relative to all other firms and relative to other firms in a peer group. The objective of Business Conduct Compliance’s Risk Assessment Model is to identify Dealer Members having a higher than average or lower than average indication of risk in their business models. With this information, IIROC further ensures that its regulatory focus is placed on higher risk firms.

The model identifies three risk types, six risk categories and seventeen specific risks. Each specific risk is assessed and weighted to determine a business risk score for each firm.

The model then calculates the risk control score by identifying two risk control categories and seven specific risk controls. Each specific risk control is assessed and weighted. Risk control is the method the firm uses to mitigate or reduce its business risk. The higher the risk control score, the higher the quality of overall risk control in that category.

Staff conduct regular reviews and on-site examinations of investment dealers, focusing on issues such as suitability, client account supervision and due diligence, corporate finance and research, employee activities and internal controls.

Providing best practice guidance on the application of IIROC rules is also part of Business Conduct Compliance’s work, as well as providing feedback on policy development to the Policy Department.

The department, which has staff in all IIROC regional offices, performs regular reviews and onsite examinations of specific issues to ensure firms are in compliance with key and emerging issues. Business Conduct Compliance examinations focus on issues ranging from suitability of investments, account opening documentation, to the supervision of advisors, branches and staff, and employee activities such as personal trading and outside business activities. They also examine the firm’s supervision and internal compliance testing on all these activities.