Firms and interested stakeholders have until September 30 to comment on the new proposed proficiency model for approved persons under the investment dealer and partially consolidated rules of the Canadian Investment Regulatory Organization (CIRO). Changes to the proficiency regime related to mutual fund dealers, they say will be done separately in collaboration with the Canadian Securities Administrators (CSA).
“This consultation paper builds off the multi-year work undertaken by CIRO and its predecessor organization, the Investment Industry Regulatory Organization of Canada (IIROC) to enhance its proficiency regime with the intention of launching the new standards in 2026,” they write. “High proficiency standards play a key role in investor protection and the integrity and efficiency of capital markets.”
Specifically, the model shifts from exams which are tied to mandatory coursework – no mandatory course are prerequisites to exams under the new regime – and instead introduces mandatory professional conduct training which must be completed within 30 days once approved persons are passed, continuing education (CE) on topics mandated by CIRO annually, and a general industry exam based on competencies common across all approved persons categories.
“Our research and review demonstrated that assessments based on competencies, and not based on courses are a best practice,” the proposal states. “Our review also demonstrates that assessments based on courses offered by the same provider could create a conflict of interest.”
Notably, the proposal increased the baseline education requirements for registered representatives to include a relevant diploma, degree or two years of relevant working experience. Also notable is CIRO’s section, entitled Experience for Executives. The section mandates that 60 per cent of a dealer member’s executives must have at least five years of experience in the financial services industry.
“We also have an experience requirement for chief compliance officers to have five years of experience working for an investment dealer or registered advisor, with three years in a compliance or supervisory capacity,” the proposal states. “We are of the view that each executive at the dealer, including the ultimate designated person, should have experience that is, at a minimum, the same as the experience applicable to supervisors, in addition to the general experience requirement set out in IDPC Rule 2503.”