The Investment Industry Regulatory Organization of Canada is reminding dealers that they must inform the regulator of any significant changes to their business models.

In a notice to members, the regulator says that “it is essential that IIROC be made aware of significant changes to a dealer member’s business model”. This is important, it says, as it uses a risk-based approach to guide its oversight of dealers; and this sort of information will also affect its business conduct reviews, financial examinations, and trade desk reviews of firms.

The question of what constitutes a ‘significant change’ depends on the individual circumstances of each firm, but the notice suggests it may include: the introduction of a new line of business which is a marked departure from its existing business, which may require the dealer or its staff to obtain new registrations; or, changes to important processes which may impact trade execution, clearing, jitney, omnibus or settlement arrangements.

The regulator says that if firms have any doubt whether a change needs to be reported, they should err on the side of either reporting it, or at least discussing it with the IIROC’s staff.

IE