Investors support regulator’s enforcement alternatives, says survey

By The IJ Staff | November 09 2018 01:30PM

Photo: Freepik

The Investment Industry Regulatory Organization of Canada (IIROC) released a survey on Nov. 8 that indicates that a majority of Canadian investors support the regulator's proposals to provide alternative approaches to enforcement, including early settlement of disciplinary cases and diverting minor rule violations away from lengthy hearings.

The survey, conducted for IIROC by The Strategic Counsel, was part of the regulator's public consultation to gather input on its proposals published earlier this year.

Inadvertent or unintentional actions

Among the findings, the survey showed that 76 per cent of investors support an early settlement program to encourage resolution of disciplinary cases before they reach an IIROC disciplinary hearing panel and 63 per cent support more flexibility in dealing with minor violations, such as inadvertent or unintentional actions that result in little or no harm to investors.

Furthermore, 70 to 85 per cent strongly agreed that serious violations, such as those that cause significant harm to investors or demonstrate a history of disciplinary issues, should result in a formal hearing before an IIROC panel.

Proposed fines too low

Most investors surveyed, however said they would like IIROC to consider changing its proposed fine levels for minor rule violations – $2,500 for individuals and $5,000 for firms. They found these amounts too low. Also, more than half say IIROC should publish the names of firms or individuals in all cases of rule breaches, including minor violations.

"It's important that Canadian investors have a voice and the ability to provide their input on our regulatory proposals," said Elsa Renzella, Senior Vice-President, Registration and Enforcement. "We will carefully consider this input, along with the comments received, in refining our alternative discipline proposals."