CSA releases review of IIROC oversight

By Andrew Rickard | March 07 2016 11:38AM

The Canadian Securities Administrators (CSA) have released their review of the Investment Industry Regulatory Organization of Canada’s (IIROC) regulatory performance. In particular, the CSA found that IIROC needs to control access to its electronic case management system and improve documentation of its case files.

High priority issues

The first issue that the CSA named as a “high priority” was the fact that IIROC had not restricted access to the case management database it uses to manage potential conflict issues involving its Enforcement Case Management (ECM) system users. This means that users with a perceived or actual conflict of interest may have had the opportunity to access information on ECM to their benefit. The CSA notes that it uncovered similar problems in its 2014 oversight report. IIROC says it plans to submit a renewed capital expenditure request to its board, and also notes that part of the delay is due to that fact that other system changes have to be completed before it can proceed with its updates to the ECM system.

The second high priority issue relates to case file standards at IIROC. CSA staff reviewed a sample of files from IIROC’s case assessment and investigation groups and found that, in some cases, the required level of management review and approval was not consistently documented. CSA staff note, once again, that they uncovered similar issues in 2014 and say they “continue to have concerns that the inconsistent application of file standards may not provide a proper level of assurance that the necessary approvals are in place.”

Working group formed

IIROC responded by pointing out that it formed a working group in July 2015 to address the issue of document management standards. “The objective is to provide clarity and consistency of procedures across the department and regional offices relating to electronic storage of file documents, including document naming conventions, and we expect to finalize the new protocol in January 2016 and to present it to staff in the latter half of February,” explained IIROC.

These are just the two high priority issues. The report details several other medium priority concerns and is available from the OSC web site.