On February 4, 2025, the IIAC provided recommendations to CIRO in respect of Rule Consolidation Project – Phase 4. Certain key highlights as follows:
Making Consultations Matter
The timing and scope of Phase 4, which includes a substantial number of rules drawn from a disparate selection of rule series, raises concern. Notwithstanding, CIRO’s request for comments was published towards the end of the calendar year with a technical 90-day response period running over the holiday period and amid several other consultations occurring at the same time.
To ensure that interested parties can provide substantive and complete comments, we request that CIRO set public consultation deadlines that reflect the volume and complexity of rules that are addressed in each phase of the project.
A comprehensive and meaningful consultation process brings benefits to the policy making process and improves policy outcomes.
Jurisdiction Exceeded
CIRO’s jurisdiction derives from recognition orders of each member of the Canadian Securities’ Administrators. Should that jurisdiction be proposed to be expanded, it must be subject to proper processes including a cost-benefit analysis and public consultation, which is well outside the scope of the Rule Consolidation Project.
CIRO’s proposed definition of “investment product” purports to give CIRO the authority to expand its own jurisdiction over any product that CIRO’s deems an “investment project”. CIRO’s proposed rules also seek to assume jurisdiction over exempt market dealers. These proposals give rise to significant jurisdictional concerns.
Technology Neutral Principles Should be Upheld
CIRO’s proposed rules on automation are unnecessary and contrary to CIRO’s proper principle that securities regulation should be technology neutral.
Greater Householding Can be Accommodated
The IIAC has actively advocated for a broader household approach to meet Canadian investor needs, most recently in our Advisor.ca Opinion Piece.
We have carefully (again) reviewed Know Your Client, Account Appropriateness, Updating Accounts and Suitability Rules, and further confirm they can and should accommodate investors managing investments on a household level.
Further Recommendations
Our further recommendations include addressing personal financial dealings and certain proficiencies on a more practical level.
