On October 22, the Investment Industry Regulatory Organization of Canada released its Annual Consolidated Compliance Report, which discusses the deficiencies found by IIROC compliance teams during field examinations of member firms. IIROC teams in Financial and Operations Compliance, Business Conduct Compliance and Trading Conduct Compliance identified three general compliance deficiencies common across the above programs, namely: (i) inadequate supervisory testing; (ii) inaccurate or incomplete books and records; and (iii) compliance programs not updated to reflect new rules or obligations. Specific compliance deficiencies identified included inaccurate or inappropriate margin provisions, inadequate controls around the sale of private placements and inadequate procedures to ensure that better priced orders in the visible market are not traded-through.
IIROC further stated that it would be undertaking focused regulatory reviews on an ongoing basis to test for compliance in specific areas. For more information, see IIROC Notice 10-0278.