As part of its ongoing project to rewrite its Dealer Member Rules in plain language, the Investment Industry Regulatory Organization of Canada (IIROC) today published a set of proposed new provisions respecting its members' dealings with clients. The proposals cover such issues as suitability, sales practices, communicating with the public, supervision and complaint handling. According to IIROC, the rewrite is intended to eliminate unnecessary rule provisions, clarify IIROC's expectations with respect to certain rules, ensure that the Rules reflect IIROC's practices and ensure consistency with other rules and applicable securities legislation. Draft guidance was also published by IIROC.
Beyond consolidating existing rules, the proposals also contain substantive changes to current obligations. For example, proposed Rule 3400 states that in order to comply with suitability requirements, members must consider the suitability of the client's account type, trading strategy, order type and the method of financing the trade. Proposed Rule 3500, meanwhile, would require members to provide clients with a commission fee schedule on account opening. Further substantive changes can be found throughout the proposals.
IIROC is accepting public comment on its proposals for 90 days from today.
See: IIROC Notice 10-0266