IFIC makes submission on phase 3 of CIRO’s rule-consolidation project
July 19, 2024 (Toronto) – The Investment Funds Institute of Canada (IFIC) has made a submission to the Canadian Investment Regulatory Organization (CIRO) on phase 3 of its rule-consolidation project. When completed, the project will merge the two sets of rules that currently apply to investment dealers and mutual fund dealers into one set of rules, which will be known as the CIRO Dealer and Consolidated (DC) Rules.
“While IFIC fully supports the project, phase 3 contains several proposals that we disagree with,” said Andy Mitchell, IFIC’s President and CEO. “We appreciate the opportunity to submit our comments and look forward to further discussions.”
In our submission on phase 3, we ask CIRO to publish the final CIRO DC Rules prior to their approval and after the completion of phase 5. This will give our members an opportunity to assess and provide final feedback to CIRO on the proposed rules. We also ask CIRO to develop and publicly consult on conforming guidance for the final CIRO DC Rules before they come into force.
IFIC’s members disagree with the proposal to increase the maximum fine a CIRO hearing panel can impose to $10 million per offence from the current $5 million under both the existing Investment Dealer and Partially Consolidated (IDPC) rules and the Mutual Fund Dealer (MFD) rules. We believe such an increase should be subject to further consultation and rigorous policy analysis.
Finally, IFIC members disagree with the proposal to require mutual fund dealers to participate in the CIRO arbitration program. In our earlier submission to the Canadian Securities Administrators (CSA) about the Ombudsman for Banking Services and Investments (OBSI) independent dispute-resolution service, we urged the CSA to undertake an analysis of all dispute-resolution, arbitration and other complaint-resolution solutions available to investors and make reforms to create a cohesive and harmonized regime for the investment sector in Canada. We urge CIRO to conduct such an analysis and to delay the requirement for mutual fund dealers to take part in the CIRO arbitration process until the CSA/OBSI project is completed.
We reiterate the principles set out in our phase 1 submission, dated December 19, 2023, and our phase 2 submission, dated March 11, 2024, which help guide our policy analysis of the proposals throughout each phase of the project.
As we did in phases 1 and 2, we restate our recommendation to provide a sufficient implementation period for our members to make required IT changes and any necessary changes to policies and procedures, training and operational matters. We also suggested ways to improve the efficiency of the consultation process for the remaining project phases. In particular, we urged CIRO to provide a minimum of 90 days for comments for subsequent, increasingly complicated phases of the rule-consolidation project.
About IFIC
The Investment Funds Institute of Canada is the voice of Canada’s investment funds industry. IFIC brings together approximately 150 organizations, including fund managers, dealers, professional and back-office service providers, to strengthen the integrity of the investment funds industry, foster public confidence in investment funds, and enable investors to achieve good outcomes. By connecting savers to Canada’s economy, our industry contributes significantly to Canadian economic growth and job creation.
For more information
Christine Harminc
Senior Manager, Communications and Public Affairs
charminc@sima-amvi.ca
416-309-2313
