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IIROC Amends CRM at CSA’s Request

By Andrew Rickard | September 23 2014 01:08PM

The Investment Industry Regulatory Organization of Canada (IIROC) has made changes to its Client Relationship Model (CRM) in order to comply with a request from Canadian Securities Administrators (CSA) staff.

On September 18, IIROC released amendments to its Client Relationship Model, which is scheduled to come into force over the next two years. The changes are being made at the request of CSA staff, who were unsatisfied with the wording of an earlier version of the regulations. The areas of contention are the portions of the IIROC 2015 and 2016 CRM2 Amendments which deal with how off-book transactions are reported.

In the accompanying notice to its members, IIROC admitted that this recent revision would "likely have a significant impact on the costs that must be borne by its Dealer Members” as the changes would require dealers to "either build and maintain this new reporting capability or expend resources to demonstrate to IIROC that they should be exempted from this revised requirement to report to clients on their off-book positions."

However, IIROC concluded that the CSA would “almost certainly” refuse to approve its proposals if the requested changes were not made. If the IIROC proposal were to be refused by the CSA, it would make IIROC dealer members subject to two separate client reporting requirements (i.e., both IIROC and the CSA).

"Given that, it is highly likely that in either case IIROC Dealer Members will be subject to the CSA staff requested requirement, IIROC staff decided to revise the proposed IIROC 2015 and 2016 CRM2," reads the notice.

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