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IIROC weighs in on titling issue

By Kate McCaffery | November 13 2020 02:39PM

The Investment Industry Regulatory Organization of Canada (IIROC) submitted and published its response to the Financial Services Regulatory Authority of Ontario request for comment on Proposed Rule [2020-001] Financial Professionals Title Protection.

In it, IIROC joins others in encouraging the regulator to avoid unnecessary or duplicative rules where minimum standards already exist. It warns that the regulator is confusing the activities undertaken by financial advisors and financial planners, and suggests revisions to the baseline competency profiles proposed.

More, it points out that the rule suggests that individuals who prepare financial plans that do not include specific investment recommendations would not be able to use the financial planner title.

In general, IIROC says “existing proficiency and conduct standards imposed by conduct regulators such as IIROC, the Mutual Fund Dealers Association of Canada (MFDA) and the Ontario Securities Commission (OSC), are generally higher than those contemplated under the FSRA titling regime. We do not plan to lower our existing proficiency and conduct standards,” they write. Later in its submission, IIROC adds that “IIROC would not allow an individual who is employed by an IIROC member dealer to use a FA (financial advisor) or similar title where they are not approved by IIROC as a registered representative, associate portfolio manager or portfolio manager, irrespective of the fact that they may hold one of the FSRA approved credentials.”

IIROC also recommends that existing conduct regulators be exempt from the credentialing body application process. It asks if and how enforcement action would be communicated to credentialing bodies and if those bodies would be required to recognize the enforcement action. Finally, IIROC proposes that an exemption be granted to those who are already approved as registered representatives on the IIROC platform.

“As a general principle,” they write, “we believe that regulators should avoid introducing any new regulatory requirements that are duplicative to existing requirements and do not add any incremental benefit to investor protection or market integrity.”

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