The Investment Industry Regulatory Organization of Canada is proposing rule amendments to clarify what sort of activities fall under its oversight, and to harmonize the requirements for reps that are employees with those that work in a principal-agent model.

IIROC is seeking comment on proposed amendments that would revise the definition of “securities related activities” and repeal the definition of “securities related business”.

In a notice issued Friday, the regulator says that the amendments are designed to clarify the definition of the term “securities related activities” to ensure that it specifically refers to all investment products; and, to replace the term “securities related business” with “securities related activities”.

“The primary objective of the proposed amendments is to clearly articulate that IIROC registered representative recommended transactions for any investment product (which includes products defined as securities under provincial legislation as well as principal protected notes, guaranteed investment certificates and other like products) must be conducted within and recorded on the books of an IIROC dealer member,” the notice explains. “It is important that all securities related activities be recorded on the books of the dealer in order that IIROC can effectively regulate those activities.”

The secondary objective of the amendments, it adds, “is to harmonize the requirements for agent and employee salespersons to conduct certain activities within an IIROC dealer”; which will be accomplished by repealing the term “securities related business”.

The regulator says that it does not consider the amendments to be a change, but rather a clarification, of existing IIROC requirements. And, it says that the amendments don’t impose limit competition or impose costs that are disproportionate to its regulatory objectives. The IIROC adds that the effect of the proposed amendments will be to give firms and their salespeople the option of choosing the most effective structure for their business.

Comments on the proposal are due by June 23.

IE