The Investment Industry Regulatory Organization of Canada (IIROC) today published for comment proposed IIROC rule amendments to increase the transparency of account performance, and account fees and charges.
The proposed amendments, which relate to the second and final set of regulatory objectives of IIROC’s CRM comprehensive reform package, introduce important disclosure requirements that will be phased in over the next three years. The key requirements include annual account performance, account fees and charges, pre-trade disclosure of fees, as well as trade confirmation and client statement disclosure requirements. There is also a proposed new requirement to report on client positions held outside of the Dealer Member.
“The CRM initiative is a comprehensive reform package designed to promote transparency, enhance investor protection and raise industry standards. These objectives are critical to promoting confidence in the quality and integrity of investment advisors as a profession,” said IIROC president and CEO Susan Wolburgh Jenah.
CRM builds on the existing requirement of IIROC registrants to act fairly, honestly and in good faith with their clients, and strengthens the overall foundation of the client-advisor relationship.
At the request of the Canadian Securities Administrators (CSA) and to ensure consistency with parallel rules being developed by the CSA, IIROC previously suspended implementation of its rules relating to performance reporting. IIROC’s CRM2 reforms propose standards that are consistent with the CSA’s framework.
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To ensure all stakeholders have a comprehensive and cohesive understanding of the overall goals of these reforms, IIROC is publishing the rule changes in their totality and is providing extensive comment periods to facilitate stakeholder input.
Comment periods and proposed implementation dates for CRM2 rule amendments:
| Proposed rules affecting: | Public comment periods | Proposed implementation dates |
| ● Pre-trade disclosure of charges ● Trade confirmation disclosure requirements – debt securities |
60 days expiring on February 10, 2014 |
July 15, 2014 |
| ● Account statement disclosure requirements ● Report on client positions held outside of the Dealer Member |
120 days expiring on April 10, 2014 |
July 15, 2015 |
| ● Performance reporting ● Relationship disclosure – discussion of investment performance benchmarks ● Fee / charge report ● Trade confirmation disclosure requirements – investment products with deferred sales charges |
120 days expiring on April 10, 2014 |
July 15, 2016 |