IIROC Releases 2020 – 21 Annual Report

TORONTO, Sept. 8, 2021 - The Investment Industry Regulatory Organization of Canada (IIROC) released its Annual Report for 2020-21 today, highlighting how the pan-Canadian public interest regulator is supporting Canadians by protecting investors and prioritizing industry transformation.

“Throughout a year punctuated with uncertainty, IIROC has continued to provide regulation without interruption, demonstrating our organization’s strength and resilience,” said Andrew J. Kriegler, IIROC’s President and Chief Executive Officer. “We took significant steps forward to support the evolution of the self-regulatory model, and the coming years will see IIROC build on our already strong foundation. Under the leadership of the Canadian Securities Administrators and together with our colleagues at the Mutual Fund Dealers Association of Canada, we will create a new and enhanced self-regulatory organization—one which is more effective and efficient and will better protect investors and support healthy Canadian capital markets.”

In addition to delivering on its core mandate of investor protection and market integrity, IIROC made considerable progress on key fiscal year 2021 priorities in support of its three-year strategic plan. Highlights are outlined below.

Effectively managing issues that arise from the COVID-19 pandemic, prioritizing the health and safety of our staff and stakeholders, investor protection and healthy capital markets.

• Despite record trading volumes and volatility, IIROC’s real-time market surveillance continued without disruption, supported by enhanced capacity and processing capability.
• IIROC developed and implemented an efficient and agile process, supported by its Board of Directors’ delegation of authority to staff, to quickly approve exemptions for firms due to pandemic challenges, without compromising investor protection.

Advancing our various initiatives and commitments related to investor protection.

• IIROC clarified, reorganized and rewrote its rules in plain language to promote greater understanding of and compliance with IIROC rule requirements, and also created a new rules section on its website to enhance transparency for all stakeholders.
• As part of the Client Focused Reforms initiative, IIROC clarified and enhanced the core regulatory obligations of firms and their client-facing staff, including the importance of know-your-client and suitability determination obligations owed to investors.

Supporting industry transformation through the evolution of the self-regulatory model to more effectively and efficiently serve Canadians.

• IIROC released several publications outlining how a new, single, consolidated self-regulator would protect Canadians and better enable the industry to deliver the advice, products and services that investors are looking for. In June 2020, IIROC submitted its proposal outlining the benefits of consolidating IIROC and the Mutual Fund Dealers Association of Canada (MFDA).
• In August 2021, IIROC announced its support of the Canadian Securities Administrators’ (CSA) decision to create a new, single, enhanced pan-Canadian self-regulatory organization to deliver efficient and effective regulation in the public interest.
• IIROC’s work with the CSA to create a regulatory framework for crypto asset trading platforms (CTPs) resulted in the publication of a joint staff Notice on March 29, 2021. The Notice provides guidance on how securities law requirements apply to CTPs. IIROC will continue to work with the CSA to ensure that CTPs subject to such requirements are integrated into the Canadian regulatory system.

Other Accomplishments

• Stage 1 of proposed amendments to modernize Dealer Member Rules for derivatives is in progress, and its finalization will be coordinated with that of NI 93-101 and 93-102. Stage 2 (margin requirements) will follow.
• IIROC went live, as scheduled, with the first phase of government debt transparency on September 1, 2020. Work continued on Phase 2, which included reporting in both corporate and government debt by all Schedule I, II and III banks, and was published in June 2021.
• IIROC continued with the implementation of Phases 2 and 3 of the client identifier requirements that were fully implemented on July 26, 2021, as scheduled. The amendments, among other things, introduced requirements to include client identifiers either in the form of Legal Entity Identifiers (LEI) or account numbers on all orders sent to a marketplace. The addition of client identifiers to IIROC's trading data will significantly improve our efficiency in performing a range of regulatory functions, including market monitoring, investigations and data analysis in addition to better supporting the CSA in carrying out their public interest mandate.

“I’m grateful for not only what has been accomplished over the past year, but especially for how it was accomplished,” said Kriegler. “Looking ahead, we’re excited about working with the Canadian Securities Administrators and Mutual Fund Dealers Association of Canada to create a new and enhanced self-regulatory organization to better protect investors and support healthy Canadian capital markets.”

View the full Annual Report on IIROC’s website.

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About IIROC

IIROC is the pan-Canadian self-regulatory organization that oversees all investment dealers and their trading activity in Canada's debt and equity markets. IIROC sets high quality regulatory and investment industry standards, protects investors and strengthens market integrity while supporting healthy Canadian capital markets. IIROC carries out its regulatory responsibilities through setting and enforcing rules regarding the proficiency, business and financial conduct of 174 Canadian investment dealer firms of varying sizes and business models, and their more than 31,000 registered employees. IIROC also sets and enforces market integrity rules regarding trading activity on Canadian debt and equity marketplaces. For more information, visit www.iiroc.ca.

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