handshaking and exchanging contract documents

Securities regulators have granted exemptions to three investment dealers that allow employees who are also employed by a related credit union to receive compensation directly from the credit union.

The Investment Industry Regulatory Organization of Canada (IIROC) announced that its board has granted relief to three dealers, allowing registered reps that are dually employed to accept compensation directly from the credit union for securities-related activities.

The exemptions are conditional on the dealers entering agreements that govern these arrangements, which are acceptable to IIROC staff.

Under IIROC’s rules, reps can only receive compensation from their dealer or its affiliates. Yet, credit unions don’t meet the definition of “affiliate” due to their member-owned structure.

In granting the exemptions, IIROC reported that the primary objective of the rules in this area is to deal with compensation-related conflicts, and that this concern can be addressed by requiring that these compensation arrangements be governed by approved agreements.