Proposed new guidance on order execution only account services and activities

1. Background

The DIY investing segment has experienced significant growth and evolution over the past few years. As a response to this influx and change, it has become imperative that OEO Dealers who service these clients are able to provide educational and informative resources, such as alerts, notifications, and self-assessment tools (collectively referred to as “decision-making supports”) on their platforms, so that DIY investors can access trustworthy, high-quality information in a regulated forum to empower them to make well-informed investment decisions for themselves. However, investor research and industry feedback has consistently indicated that the current OEO Guidance has created confusion and unnecessary limitations regarding the kinds of decision-making supports that OEO Dealers can offer their clients.

We strongly support efforts to enhance investors’ financial literacy and awareness. In our view, timely and relevant decision-making supports allow clients to make informed investment decisions for themselves by empowering them to:

• better understand fundamental investment principles,
• self-assess their risk tolerance and financial goals, and
• accurately align their own investment decisions with their self-defined financial goals on a continuous basis.

Given the significant industry developments and consultation feedback detailed below, we have opted to provide a net-new document as the Proposed Guidance rather than revising the current OEO Guidance. As a result, we have not provided a blackline of the current OEO Guidance against the Proposed Guidance. The Proposed Guidance proposes significant, material changes to how the recommendation prohibition in the IDPC Rules1 should be interpreted and applied to decision-making supports in the OEO channel.

Our objective in proposing the Proposed Guidance is to provide flexibility that allows OEO Dealers to better service clients’ needs in this channel without compromising investor protection, and while remaining consistent with the IDPC Rules, which prohibit recommendations in OEO accounts.

1.1 Key findings in the DIY investing segment

CIRO’s inaugural Investor Survey2 found that four out of 10 DIY investors opened their first DIY account within the last three years and that these DIY investors are considerably more likely than other investors to use social media, internet forums or financial influencers (Finfluencers) as sources of investing information and advice.

A recent research report3 by CIRO’s Office of the Investor (referred to in this bulletin as the DIY Investing Report) further examined DIY investing and built on these past survey findings with in-depth interviews with DIY investors. Key findings from this research included the following:

• Most DIY investors interviewed tried to double-check and validate investment advice and information using multiple sources. However, the sources for both the initial information and the validation were often social media sources, messaging platforms, internet forums or Finfluencers, rather than regulated entities.
• Many DIY investors interviewed were open to additional tools through their DIY investing platform that would provide further information, research, alerts, or education. However, they emphasized the importance of maintaining full control over their accounts and decision-making, and emphasized concerns regarding these offerings by OEO Dealers being used to ‘sell’ them something (whether a specific product or generally encouraging certain types of activities).
• Many interviewees expressed a desire for more regulation and safeguards to prevent the spreading of misinformation through social media.

1.2 Previous consultation

On December 13, 2024, CIRO published a consultation regarding the limitations of advice in the OEO channel (the Phase 1 consultation).4 We clarified that our intention is to enhance investor protection by:

• allowing investors to access high-quality information from regulated sources, and
• allowing the use of tools designed to help investors make better investment decisions.

In that consultation, we clarified that we share the view expressed by the Ontario Securities Commission (OSC) in its Business Plan published on April 29, 2024, that “There is an increasing consensus that the present limitations on advice being provided by OEO [order-execution-only] firms are preventing important information from being provided to do-it-yourself (DIY) investors who are increasingly seeking advice from unregistered channels, including social media platforms. Information that is shared online may be incomplete or misleading, and in some cases may not comply with securities laws. In addition, these limitations may impede the communication of important warnings to investors concerning products or services, including leveraged products, meme stocks, options trading and margin.”5

We received extensive feedback on the Phase 1 consultations from participants across the industry, including OEO Dealers, industry associations, and investor protection advocacy groups. We received 28 letters in total. All comments received are available on CIRO’s website. We have also provided a summary of these comments and CIRO’s responses as Appendix 2.

The comments were unanimous in calling for revisions to the current OEO Guidance. However, they offered different views on how to best balance two goals: (1) giving investors enough information to make well-informed investment decisions on their own, and (2) protecting them from potentially incomplete, biased, or misleading communications, particularly given OEO investors cannot receive investment recommendations. Having considered the IDPC Rules against the varied feedback received in the Phase 1 consultation, the Proposed Guidance sets out our approach to balancing these two objectives.

Note that while the Phase 1 consultation used the term ‘non-tailored advice’ to refer to communications by OEO Dealers that contained general investment information (i.e., information that was not unique to an individual client’s personal circumstances or portfolio), we have since decided to move away from this language. The use of this term has led to significant confusion in the industry regarding the distinctions between advice, non-tailored advice, and recommendations. Given that the IDPC Rules that relate to the Recommendation Prohibition do not use the term non-tailored advice or advice6, there is no need to continue to use this terminology and invoke this confusion. Instead, the Proposed Guidance uses the term ‘decision-making supports’ to collectively refer to communications by OEO Dealers that support clients in making their own investment decisions.

2. Proposed Guidance

2.1 Overview

The purpose of the Proposed Guidance is to clarify the ability of OEO Dealers, as regulated sources, to provide topical, timely, high-quality information to clients in a manner that maintains investor protection, respects the business boundaries of the OEO channel, and is consistent with the regulatory obligations to which OEO Dealers are subject. This ultimately allows investors who wish to engage in DIY-investing to do so in an informed way.

DIY investors have clearly indicated the importance of having high-quality, trustworthy, unbiased decision-making supports that they can use to foster better-informed investment decisions for themselves. As a result, OEO Dealers may desire to win business by offering decision-making supports to clients, beyond order-execution-only services. However, pursuant to the IDPC Rules, OEO Dealers cannot make recommendations.7 Therefore, the Proposed Guidance addresses what is considered a prohibited recommendation in an OEO account and, conversely, sets out the rationale for why specific kinds of decision-making supports are not prohibited recommendations.

The Proposed Guidance also sets out that OEO Dealers who choose to offer decision-making supports that go beyond order-execution-only services incur the responsibility to provide safeguards for their clients. These key safeguards are critical for OEO Dealers to avoid violating the Recommendation Prohibition and to ensure that clients understand the limitations of an OEO account. These key safeguards are detailed in section 2.2.3 below and include managing or avoiding conflicts of interest, and providing clear, fulsome, and prominent client disclosures and supplementary information that makes it clear that the OEO Dealer cannot recommend any specific investment decision to a client.

Ultimately, the Proposed Guidance seeks to strike an appropriate balance between empowering investors to make informed decisions for themselves, promoting healthy capital markets by addressing the types of decision-making supports that OEO Dealers can opt to offer to their clients (subject to compliance with the applicable regulatory requirements and limitations in the OEO channel), and maintaining adequate investor protection.

2.2 Key Issues

The below is a summary of the key issues addressed in the Proposed Guidance and our corresponding rationale.

2.2.1 Revised Recommendation Prohibition

The response to the Phase 1 consultation indicated a widespread desire in the industry to clarify – and, in many comments, to narrow – what kinds of communications by OEO Dealers are caught by the recommendation prohibition.

IDPC Rule subsection 1201(2) requires that, in an OEO account, the client is solely responsible for making all investment decisions, and the Dealer Member provides “no recommendation to purchase, sell, hold or exchange any security, including any class of security or security of a class of issuer, or transact in any derivative.” The term “recommendation” is not defined in the IDPC Rules.

The current OEO Guidance defines this restriction from providing recommendations in an OEO account as the “Recommendation Prohibition.” For the purposes of the Recommendation Prohibition, it defines a “recommendation” as:

“any communication or statement of opinion sent or made available to an investor (or class of investor) that could, based on the context or circumstances, reasonably be expected to influence that investor (or class of investor) to make an investment decision regarding a security (including any class of securities and the securities of a class of issuers) (collectively, securities).”8 [emphasis added]

We believe this drafting, specifically the clause “reasonably be expected to influence,” is overly broad because it may catch purely informative resources upon which a client may choose to rely to inform their own investment decisions. The effect of this overly broad drafting is counterproductive to investors’ desire to access high-quality information that they can, in fact, use to arrive at investment decisions for themselves.

Responses to the Phase 1 consultation support this view.9 While commenters were not universally aligned in what should constitute a prohibited recommendation, many commenters raised that there should be a distinction between an OEO providing high-quality informative resources which investors can use to inform their own investment decisions, as opposed to recommending that a client undertake a specific investment decision.

Therefore, the Proposed Guidance clarifies in section 2.1 that a recommendation is prohibited in the OEO channel “if it endorses a specific investment decision for the client” (the revised recommendation prohibition). In effect, this materially narrows prohibited recommendations from any client communications that may contain mere information, or the expression of an opinion, by the OEO Dealer (which could be considered a prohibited recommendation under the current OEO Guidance), to client communications by the OEO Dealer that endorse a specific investment decision.

Informative resources and decision-making supports that do not endorse a specific investment decision and are provided with adequate safeguards would not be caught by the revised recommendation prohibition.

The revised recommendation prohibition better reflects the intention of IDPC Rules, which is to ensure that OEO Dealers do not provide recommendations to clients regarding specific investment decisions where no suitability obligations apply.10 The IDPC Rules are not intended to prevent OEO Dealers from providing informative resources upon which their clients may choose to rely to inform their investment decisions, as long as those resources do not endorse a specific investment decision.

2.2.2 Decision-making supports

As set above, we strongly support OEO Dealers offering high-quality decision-making supports (such as alerts, notifications, tools, informative and educational material) to clients to empower them to make informed investment decisions that align with their financial goals. While OEO Dealers are not required to offer decision-making supports under the IDPC Rules, research and consultations have indicated that many OEO Dealers choose to do so to win client business and loyalty.

The Proposed Guidance does not prescribe what kinds of decision-making supports OEO Dealers may offer. We believe that taking a prescriptive approach would unnecessarily risk stymieing innovation, as CIRO cannot conceive of every potential permutation or combination of decision-making supports that OEO Dealers may create in the future. OEO Dealers have the flexibility to innovate and develop decision-making supports that we have not defined today, as long as those decision-making supports are consistent with the applicable regulatory requirements and the Proposed Guidance.

The Proposed Guidance takes a principle-based approach by setting out common themes among different types of decision-making supports that exist in the industry today and discusses the key challenges that OEO Dealers face if they choose to offer these decision-making supports. We also provide a (non-exhaustive) discussion of key safeguards that we consider pertinent to decision-making supports.

Below, we summarize the different types of decision-making supports outlined in the Proposed Guidance.

(a) Allowing OEO Dealers to use client-specific information to provide timely and relevant information to clients

In the consultation process, OEO Dealers indicated a strong desire to provide accurate, timely, relevant (and, in some cases, targeted) information to clients to ensure that clients have all the information they need to make informed investment decisions. Similarly, investor advocacy groups have emphasized the importance of decision-making supports that keep investors informed on a timely basis to help them manage risks effectively.

As such, we have explicitly included a discussion of such decision-making supports in the Proposed Guidance. While alerts and notifications are not mandatory, where offered, they should be intended to empower investors to make sound decisions for themselves. By providing reliable and timely information, OEO Dealers can help reduce investors’ reliance on social media or other non-regulated sources, fostering more confident and informed investment decisions. We emphasize that the aim of alerts and notifications should be to enhance investor protection by ensuring clients have access to high-quality information from regulated sources, rather than to emphasize certain investments for sales purposes.

Our consultation process indicated that investors want to be provided relevant information without being inundated with so much information that it becomes difficult to discern what is relevant to their specific goals. The typical model of a client being required to log onto an OEO Dealer platform to proactively seek out and access this information (referred to as “pulling” in the current OEO Guidance) is not always the most useful format for clients to access information they need to make their own investment decisions. As a result, section 3.1.1 of the Proposed Guidance allows OEO Dealers to use limited client-specific information to proactively send targeted information to relevant clients (subject to the applicable key safeguards), so long as the content of that communication does not contain a prohibited recommendation. This approach allows clients to receive timely and relevant information to support their own investment decisions, while still prohibiting OEO Dealers from endorsing any specific investment decision.

These types of communications may take the form of alerts or notifications sent directly to specific clients when the information is timely and relevant to them. For example, OEO Dealers may opt to:

• alert clients who are significantly invested in, newly investing in, or considering highly volatile or speculative assets, informing them of the risks involved,
• notify clients about unnecessary or duplicative fees, or reminding them of large amounts of uninvested cash in their accounts,
• notify clients about known scams and security alerts related to cyber threats, or
• provide alerts of news related to investment products or markets that a client is invested in, or has opted to receive news about, such as earnings reports, regulatory actions, press releases, market trends, interest rate decisions, employment, stock reorganizations, dividend announcements, product expirations, price movement, market volatility, and portfolio performance.

(b) Other kinds of decision-making supports

As set out above, OEO Dealers may provide informative resources that are purely general and educational to clients. However, some decision-making supports are more akin to tools, designed to allow clients to self-assess their investment goals and make decisions against those goals. Some examples include tools such as self-assessment questionnaires, filtering mechanisms, and rebalancing tools that allow investors to self-assess their risk tolerance and capacity, choose specific securities that align with their investment strategies, and maintain those positions over time.

Tools can play a pivotal role in the OEO channel by improving financial literacy and helping investors to better understand their investment needs and make decisions for themselves that align with those needs. Overall, these decision-making supports should provide investors with a mechanism to analyze their own information and apply that against general investment principles that are applicable to a wide range of situations or people.

Section 3 of the Proposed Guidance sets out that the output of a decision-making support will generally not be considered a prohibited recommendation if all inputs are made by the client, the OEO Dealer does not endorse a specific investment decision, and the output is provided alongside adequate safeguards (discussed in further detail below).

(c) Applying the revised recommendation prohibition to the combined output of multiple decision-making supports

OEO Dealers may choose to offer a range of decision-making supports to help clients develop a full picture of their investor profile and objectives on an ongoing basis. There are a wide range of such tools that would be helpful to DIY investors.

We note that revised recommendation prohibition does apply to the combined output of multiple decision-making supports offered by an OEO Dealer. This analysis is set out in section 3.2 of the Proposed Guidance.

The OEO Dealer must avoid the sum output of decision-making supports resulting in a prohibited recommendation to a client. Generally, the output of a combination of decision-making supports will not violate the revised recommendation prohibition where outputs do not endorse any specific investment decisions and where it is made clear that all outputs are general and have not been tailored, nor assessed as suitable, to any specific client.

(d) Sample portfolios

Note that in the Proposed Guidance, we have moved away from the term ‘model portfolios.’ Instead, we use the term sample portfolios to describe general examples of portfolios that have not been personalized to a particular client. This change in verbiage is intended to distinguish sample portfolios from the existing industry concept of model portfolios that are offered by full-service dealers and portfolio managers. We will continue to use the term sample portfolios throughout this consultation.

In the Phase 1 consultation, we asked commenters to provide feedback on ‘model’ portfolios that reference specific securities in the OEO channel, which is not permitted under the current OEO Guidance. Comments were received both for and against making these resources available in the OEO channel. Concerns cited the blurring of lines between OEO services and investment advice, conflicts of interest (particularly for proprietary products), and investor protection.

As discussed in section 2.2.1 of this bulletin, we believe the revised recommendation prohibition accurately identifies the key elements that constitute a recommendation. When reviewing sample portfolios against the revised recommendation prohibition, we conclude that OEO Dealers should not select specific investment products for sample portfolios, as doing so would amount to endorsing a specific investment decision.

Note that per section 2.1 of the Proposed Guidance OEO Dealers cannot avoid the revised recommendation prohibition by simply stating that a sample portfolio is not tailored to a specific client if, in every other regard, it meets the test of a recommendation. There is a significant risk that, without an adviser to make abundantly and continuously clear to a client that sample portfolios are fundamentally unable to be personalized and/or assessed as suitable for that client in the OEO channel, a client will understand these investment products to be endorsed by the OEO Dealer.

Furthermore, as set out in sections 2.2.2(a)-(c) of this bulletin, under the Proposed Guidance OEO Dealers are able to offer combinations of decision-making supports that rely on (and create outputs that are contingent on) a client’s specific information, such as investment objectives, risk tolerance, etc. If the outputs of these tools are then used to inform sample portfolios that reference specific securities, then from a client perspective, this creates an environment where their specific goals and objectives are used to inform the selection of specific investment products, which is akin to a recommendation.

OEO Dealers can make available sample portfolios that set out asset allocations (this is consistent with the current OEO Guidance and has been maintained in the Proposed Guidance). We have also materially expanded the scope of sample portfolios under the Proposed Guidance by explicitly allowing OEO Dealers to provide filtering tools alongside sample portfolios, thus allowing clients to select investment products to fill in the asset allocations (subject to the applicable requirements and key safeguards). In this context, the OEO Dealer has not endorsed any specific investment product, so the sample portfolio is not a prohibited recommendation.

From a client perspective, the effect of this proposal is materially the same as allowing sample portfolios that reference specific investment products. Under the Proposed Guidance, clients still receive decision-making support from an OEO Dealer at a portfolio allocation level, yet the client is still fundamentally required to make their own investment decisions to fulfill specific positions. We believe this approach strikes the appropriate balance between allowing OEO Dealers to offer clients helpful information (thus reducing investors’ reliance on Finfluencers and other unregulated channels for this type of information), without constituting a prohibited recommendation under the IDPC Rules.

2.2.3 Key Safeguards

In the OEO channel, investors do not have access to an investment adviser who can explain and reinforce the limitations of the channel. This creates a significant risk that where OEO Dealers offer decision-making supports, even those that are general in nature, clients may mistakenly understand these communications as personalized recommendations.

We note that because the revised recommendation prohibition in the Proposed Guidance has been significantly narrowed in scope, this consequently widens the scope of decision-making supports that OEO Dealers may choose to offer. As a result, decision-making supports may include information regarding, and references to, specific investment products that are pertinent to specific clients (albeit, absent any endorsement). This presents a wider swath of decision-making supports that clients can potentially mistake as recommendations.

Therefore, robust investor protections are needed if OEO Dealers provide decision-making supports. To address this risk, section 3 of the Proposed Guidance contains a thorough (though non-exhaustive) discussion of key safeguards that OEO Dealers should apply if they offer decision-making supports to clients. At a high-level, these key safeguards include clear descriptors regarding the methodology and limitations of any decision-making supports offered, using objective criteria, addressing or avoiding material conflicts of interest, regular monitoring and updates of all decision-making supports, and providing educational resources regarding the proper use of any decision-making support.

In summary, these safeguards are designed to ensure that clients are aware of the limitations of both the OEO channel and any particular decision-making supports, and are made aware of those limitations on a continuous basis. We note that, given that OEO platforms are entirely self-directed, merely providing extensive disclosure regarding the limitations of an OEO account during account opening, or housing all such disclosure on a single webpage, will likely not meet the standard for making this clear to clients.

Furthermore, it is crucial that OEO Dealers either address, or avoid entirely, potential conflicts of interest that may be present in the OEO channel. For example, potential conflicts of interest include prioritizing references to proprietary or affiliated products, or products that OEO Dealers have an incentive to prefer, in any decision-making supports. Disclosure alone is not sufficient to address conflicts of interest in this context.

Lastly, we emphasize that it is critical that OEO Dealers who offer decision-making supports to clients make it clear that all decision-making supports are merely intended to empower the client to make their own investment decisions, and that the OEO Dealer is never able to review clients’ accounts, trading activities, or personal information (such as their financial circumstances, investment needs or risk profile) for the purpose of recommending specific investment decisions to that client.

2.2.4 Method of Delivery: Revised Analysis of ‘Push’ vs ‘Pull’

The current OEO Guidance places a strong emphasis on whether a communication is actively sent to a client by an OEO Dealer (referred to as “pushed”), or sought out by a client from the OEO Dealer’s platform (referred to as “pulled”). The current OEO Guidance treats this as an important factor in the analysis of whether a communication is a prohibited recommendation, stating that “[CIRO believes] that a tool that is pushed or pushes information to clients is more likely to be relied on by clients as relevant to them.”11 This gives rise to the need to assess, for each type of tool or communication, whether the method of delivery is, in and of itself, enough to induce a client to rely on that communication.

Industry feedback has continuously criticized this aspect of the current OEO Guidance for several reasons. We recognize that the emphasis on the distinction between “push” and “pull” was overemphasized in the current OEO Guidance for the following reasons:

• The distinction between “push” and “pull” is not a practicable distinction and is the source of ongoing confusion. For example, if a client seeks out information regarding a specific security from the OEO Dealer’s platform and requests ongoing updates on that security be sent to them, are those communications being “pushed” by the OEO Dealer or “pulled” by the client?
• The distinction between “push” and “pull” is not always relevant to the analysis of whether a communication is a prohibited recommendation. For example, an OEO Dealer “pushing” (i.e., sending) purely informative, educational information to a client is indeed likely to be relied on by a client, but that is irrelevant as long as no endorsement of a specific investment decision is contained in the communication. Providing clients with high-quality, reliable information that they can rely on to inform their own investment decisions is the purpose of making educational resources available.

To address this issue, the Proposed Guidance takes a different approach than the current OEO Guidance in considering the method of delivery of a communication by an OEO Dealer.

We believe that the method of delivery by an OEO Dealer is only relevant where the communication endorses a specific investment decision for a client.

Under the Proposed Guidance, the substantive content of a communication or decision-making support will generally be determinative of whether it constitutes a prohibited recommendation. Therefore, if an OEO Dealer sends targeted, but purely informative or educational, resources to clients that does not contain any information that does not endorse a specific investment decision for a client, these will likely not be considered a prohibited recommendation even though they are ‘pushed’ to the client. In this scenario, even if one might argue that the act of ‘pushing’ implies an endorsement, there is no specific investment decision in the communication to be endorsed. An example of this kind of communication could be an educational pamphlet sent to clients describing the pros and cons of investing in ETFs generally.

However, the Proposed Guidance also acknowledges that there are some contexts in which the method of delivery remains relevant to the determining whether a communication by an OEO Dealer is a prohibited recommendation. Specifically, if a communication by an OEO Dealer does contain language regarding a specific investment decision, then the OEO Dealer proactively sending that language to a client may create ambiguity, or even the implication, that the OEO Dealer endorses that specific investment decision for the recipient client.

For example, research reports commonly contain language that clearly endorse a specific investment decision, describing a security as a ‘buy’ or ‘sell.’ We recognize that, from an OEO Dealer’s perspective, research reports are intended to be understood as a purely general resource that is not tailored to the recipient client. However, if an OEO Dealer proactively forwards research reports to directly clients, clients may misinterpret these general recommendations to be endorsed by the OEO Dealer.

For this reason, the Proposed Guidance notes that the method of delivery of a communication by an OEO Dealer may be relevant to the analysis of a prohibited recommendation in some contexts. OEO Dealers are expected to apply all of the key safeguards (with particular emphasis on clear, comprehensive disclosure and conflict of interest management) to ensure that all client communications that reference a specific investment product are not misunderstood by a recipient client to be an endorsement of a specific investment decision.

2.2.5 Finfluencers and Copytrading

In the Phase 1 consultation, commenters emphasized their concerns regarding Finfluencers and copytrading, with many calling for the application of stringent regulatory standards in respect of these practices.

After the comment period for the Phase 1 consultation period closed, the CIRO Office of the Investor’s DIY Investing Report confirmed that many DIY investors use social media to inform their investment decisions, to learn about new investment products, to monitor peers’ analysis or activity on investments they own and to do additional research or validate what they had heard about a product from another source.12 However, Finfluencers’ awareness of the applicable securities laws and regulatory requirements around these communications was extremely low, despite their promotional content relying largely on self-regulation.13

In light of these findings, we strongly reiterate that OEO Dealers are responsible for ensuring that the activities in which they engage comply with the regulatory obligations to which they are subject under the IDPC Rules and securities laws. This includes (but is not limited to) requirements regarding marketing and advertising practices, referral arrangements, conflicts of interest, etc. OEO Dealers must also consider whether they could be making prohibited recommendations or facilitating registerable activity by unregistered others (such as Finfluencers) if they link to, host or provide third-party content, enter into referral arrangements, or facilitate copy-trading functionality.

These issues are of utmost importance to investor protection across the industry and their implications extend beyond just the OEO channel. As the landscape continues to evolve, regulatory analyses are ongoing and additional efforts to address these issues may be undertaken. OEO Dealers should be mindful of any applicable guidance that CIRO or the CSA may issue specifically concerning such practices.

3. Consultation Questions

We welcome comments on the Proposed Guidance. We also specifically request comments on the following questions:

Question 1

The Proposed Guidance sets out a non-exhaustive list of key safeguards for OEO Dealers to consider when offering decision-making supports to clients. Are there any additional safeguards you believe should be included to further enhance investor protection in the OEO channel? If so, please specify.

Question 2

As discussed in section 2.2.2(d) above, the Proposed Guidance permits OEO Dealers to provide sample portfolios that can be used in combination with filtering tools so that clients can receive support from OEO Dealers on asset allocation at the portfolio level, while still remaining responsible for their own specific investment decisions.

1. Do you agree that this approach appropriately balances OEO Dealers’ desire to provide sample portfolios with investor protection concerns (particularly around conflicts of interest)?
2. If you do not agree with this approach, please describe how can OEO Dealers could provide sample portfolios that reference specific investment products but do not constitute a prohibited recommendation under the revised recommendation prohibition. Recall that (as set out in 2.1 of the Proposed Guidance) OEO Dealers cannot avoid the revised recommendation prohibition by simply stating that a sample portfolio is not tailored to a specific client if, in every other regard, it meets the test of a recommendation.

Question 3

Consistent with a principle-based approach, we have abstained from listing extensive examples in the Proposed Guidance of decision-making supports and whether or not they would be considered prohibited recommendations. We believe this is crucial for the Proposed Guidance to remain technology-neutral and allowing OEO Dealers to create new decision-making supports without being hindered by a point-in-time, binding analysis in the Proposed Guidance. However, throughout the consultation process, feedback continues to be varied as to whether the industry would benefit from CIRO providing more examples.

Would commenters like CIRO to publish an analysis of different decision-making supports as against the revised recommendation prohibition in a supporting document alongside the Proposed Guidance? If so, please submit examples for which you would like that analysis.

Question 4

In its Executive Summary, the Proposed Guidance indicates that it does not contemplate an OEO Dealer that restricts its product shelf largely to proprietary or affiliate products, or a very limited range of products, because of the revised recommendation prohibition and conflicts of interest implications.

1. Do commenters disagree with this position? If so, please describe in what ways the material conflict that arises in this scenario (such as filtering tools generating results that only reference proprietary or affiliate investment products) could be appropriately addressed in the best interests of the client instead of avoided.
2. In the case of an OEO Dealer that offers a very limited range of products, how could an OEO Dealer ensure that decision-making supports do not offer so few options that it ultimately endorses specific investment products? For example, should such OEO Dealers be required to generate a minimum number of options to offer certain tools (such as filtering tools when used in combination with sample portfolios)?

4. Appendices

Appendix 1 – Draft Proposed Guidance Note: Guidance on order execution only account services and activities

Appendix 2 – Summary of public comments received from Phase 1 consultation

• 1IDPC Rule subsection 1201(2), “order execution only account.” See section 2.2.1 of this bulletin for a detailed overview of the Recommendation Prohibition.
• 2CIRO 2024 Investor Survey.
• 3DIY Investing: New investors and the role of social media, published July 2, 2025. 
• 4Non-Tailored Advice in the Order Execution Only Channel, published on December 13, 2024, as Notice 24-0367.
• 5OSC Business Plan - For the fiscal years ending 2025-2027.
• 6See IDPC Rule 1201(2), “order execution only account”. This subsection uses the term “recommendation” when discussing the limitations of an OEO account. The terms “non-tailored advice” and “advice” do not appear in this subsection and are not necessary to analyze the recommendation prohibition in the Proposed Guidance. 
• 7IDPC Rule subsection 1201(2), “order execution only account.”
• 8Current OEO Guidance, section 3.1.
• 9See Appendix 2.
• 10For example, see IDPC Rule clauses 3208(1)(i), 3211(2)(i), 3303(2)(i), and 3404(1)(i).
• 11Current OEO Guidance, section 3.2.2.
• 12DIY Investing: New investors and the role of social media, pages 12-17, 60 – 97.
• 13 Page 97.