Are you involved in any outside business activities? If so, double-check that they comply with IIROC’s policies.
This is especially crucial given the regulator recently amended the rules covering the personal financial dealings and OBAs of all dealer members.
This past June, IIROC announced its new rules will be known as dealer member rule 43. It added all changes will take effect in December 2013.
In that release, the regulator summarized the changes, saying they were made to:
- clearly articulate that any personal financial dealings with clients, subject to limited exemptions, is considered inappropriate conduct, a conflict of interest and a violation of the general business conduct standards; and
- codify its prior position regarding outside business activities, by imposing specific and positive obligations on registered representatives and investment representatives.
The regulator pointed out it wanted to reiterate advisors must “disclose any OBAs to the dealer member and obtain…approval…before engaging in any OBAs in order for the dealer member to ensure [the activities] aren’t inappropriate or give rise to a conflict of interest.”
And as a result of the changes, IIROC adds that any existing arrangements with clients that are considered OBAs—some approved persons could be acting as a client’s PoA, trustee, or executor, for instance—must be unwound or be deemed compliant with the new rules by June 13, 2014.
Read: What to consider before appointing a PoA
IIROC first published the proposed changes in May 2010. It also proposed the release of a guidance note in May 2011. This guidance has also been issued, and provides:
- A summary of the requirements relating to the disclosure and approval of all OBAs;
- Some considerations relating to the approval of OBAs;
- Dealer members’ supervisory responsibilities relating to OBAs; and
- The filing requirements
For more on OBAs, read:
Are outside business activities worth the risk?