Securities regulators report that they are finding notable differences in the disclosure that firms are providing to clients about their processes for assessing suitability and for managing conflicts of interest.

The Investment Industry Regulatory Organization of Canada (IIROC) issued a report today detailing frequently asked questions (FAQs) relating to the first phase of the Client Relationship Model (CRM) reforms. Those reforms include changes to relationship disclosure requirements, enhancing suitability obligations, and the processes for managing and disclosing conflicts.

In that report, IIROC notes that its compliance reviews in this area have focused on the new account relationship disclosure requirements and the obligations to manage conflicts of interest. “Although the results of this work are still being analyzed, one finding of note is that there appears to be differences (from one firm to the next) in the level of detail of the relationship disclosure information provided to clients,” it says, pointing particularly to the processes used by dealers to assess suitability, and the process to manage conflicts.

IIROC says that it will provide further discussion of these findings, and other results from its CRM-related compliance review work in its annual compliance report that will be issued at the end of the year. In the meantime, the FAQ spells out IIROC’s responses to some of the common questions it has received on the new CRM requirements, in a bid to assist firms that are impacted by these new requirements.

The FAQ deals with issues such as the details of the pre-trade disclosure requirements, the required contents of account statements, and clarifying the enhanced suitability obligations.IIROC says that the list of common questions will be updated and re-issued periodically to keep it current.