The Investment Industry Regulatory Organization of Canada is proposing to set a six-year limitation period on enforcement proceedings against its members and their employees.

In a notice proposing the new rule, IIROC says that the primary objective is to provide clarity in its rules on the time frame within which IIROC may pursue enforcement proceedings. It notes that the rules currently carry a five-year limit on bringing enforcement cases against dealers or registered reps who leave the industry, and that it may bring a case against a former rep who re-applies for registration, but that here is currently no limitation on bringing cases against current members or reps.

The proposed six-year limitation period would apply to both current dealers and reps, as well as former dealers and reps. It will also extend the period of investigative powers over former members to six years, so that it is consistent with the limitation period for IIROC enforcement proceedings.

The proposed rule would require the regulator to initiate proceedings within six years, it wouldn’t be bound to complete them within that time frame. It notes that this requirement ensures that defendants cannot simply avoid IIROC oversight by delaying proceedings for more than six years.

Under the proposal, the clock would start ticking when the last event giving rise to the proceeding occurred. For non-compliance that is continuing, the time starts on the last occurrence of the conduct in question, it says.

Comments on the proposal are sought by January 25, 2011.

IE