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IIROC consulting public on streamlined disciplinary process for minor infractions

Last Updated Feb 22, 2018 at 12:20 pm PDT

TORONTO – A national group that oversees Canadian investment dealers and trading activity says it’s launching a public consultation about a new approach to disciplinary actions.

The Investment Industry Regulatory Organization of Canada is proposing a minor violations program that would bypass a formal disciplinary hearing, and see individuals fined $2,500 and firms fined $5,000.

Admitting to the rule breach would not reside on the individual’s or firm’s formal disciplinary record and the public notice of the misconduct would remain anonymous.

Under the current process, monetary penalties are equal to three times the profit made or loss avoided, to a maximum of $5 milion per contravention.

IIROC also wants to establish an early resolution program to settle cases more quickly once sufficient facts are known and certain conditions are present.

The self-regulatory organization for Canada’s investment industry says firms would be encouraged to take corrective action and compensate clients if the disciplinary process took less time to complete.

Currently, IIROC Enforcement provides the options to either settle before a disciplinary panel or to have a full disciplinary hearing before a panel with the power to impose monetary penalties, expulsions or employment bans.

IIROC’s says its new proposals are based on its review of programs and best practices adopted by other regulatory bodies in Canada and abroad.

Public comment on the proposed alternative forms of disciplinary action will be open until May 23.

“IIROC welcomes the opportunity to hear from investors, industry and other stakeholders about the changes we propose to ensure a fair, effective and timely enforcement program,” said Elsa Renzella, IIROC senior vice-president of registration and enforcement, in a statement.

“We expect these approaches will provide faster resolution and allow us to focus our resources on more serious cases where there has been harm to investors.”