The Investment Industry Regulatory Organization of Canada (IIROC) published a report Tuesday spelling out the sorts of exemptions from its rules that it granted, and refused, over the past year.
“The release of this comprehensive report is in keeping with our commitment to be as transparent as possible and will help firms better understand the types of exemptions that IIROC may grant in appropriate circumstances” said Paul Riccardi, IIROC’s senior vice president, enforcement, member policy and registration, in a release.
The report reveals that IIROC granted a total of 257 exemptions from its requirements in 2012. Over half, 157 of them related to exemptions from certain proficiency requirements.
It also allowed 62 exemptions from the trading rules, and 38 exemptions from dealer rules, including 26 exemptions granted by IIROC staff (not related to proficiency), and 12 exemptions granted by its board.
Of the 12 exemptions granted by IIROC’s board, 11 of them related to institutional trade arrangements, giving firms relief from the requirement to deliver trade confirmations and month-end statements in those cases. It also granted an exemption from KYC and suitability rules to allow Bank of Montreal’s Advice Direct service to operate.
The 26 exemptions from dealer rules granted by IIROC staff involve bulk transfers, including 17 related to the closure of back-office provider, Penson Financial Services Canada Inc.; and the other nine related to dealer acquisitions.
All of the trading rule exemptions came in response to a request for permission to act as principal or agent in a trade that would be completed off-marketplace.
As for the exemptions from proficiency requirements. The report indicates that between August 15 and December 31, IIROC received a total of 164 requests for exemptions from certain proficiency requirements, such as the obligation to write, or re-write, a certain course; or for an extension on the deadline to complete a course.
Most of these were granted based on individuals demonstrating equivalent education or experience; or, circumstances that merited an exemption. Seven of those applications were denied in cases where IIROC staff determined that the individual applicants were not able to demonstrate equivalence.
The report notes that the data on proficiency exemptions only relates to the Aug-Dec. period because reporting mechanisms allowing it to track these requests was only implemented then. In future, it expects to provide data for the full year. Additionally, it says that IIROC staff are considering possible rule amendments to codify these recurring exemption decisions.