Investment dealers can still use part-time chief financial officers (CFOs), the Investment Industry Regulatory Organization of Canada (IIROC) says.
IIROC issued new guidance Monday confirming that firms can employ part-time CFOs, who may also work for more than one dealer. The regulator indicates that it has received a number of questions from firms about whether this practice is still allowed; so, it is issuing guidance to confirm that it is, and to spell out its expectations for these arrangements.
“IIROC’s view on the use of part time CFOs has not changed – it is still permitted,” the notice says. It then goes on to detail the requirements for approval of a CFO, their roles and duties, and issues related to supervision, conflicts and confidentiality.
The notice stresses that, “The regulatory obligations of a part time CFO are exactly the same as the regulatory obligations of a full time CFO.” Those duties aren’t diminished if they work off-site, or if they work for a number of firms, it says. And, it notes that CFOs play “an important role in ensuring investor protection” as they are responsible for dealers’ compliance with IIROC’s financial and operational rules.
IIROC says that when it comes to approving a part-time CFO, “IIROC staff may also consider the demands of other retainers of the applicant. In evaluating these demands, staff may take into account the number of firms for which the applicant works and the circumstances of those firms.”
“The terms of engagement of a part time CFO may not unduly circumscribe the role and responsibilities of the CFO. The scope of the individual’s role must accord with the principles set out in this notice and encompass all of the obligations and functions of a CFO and an executive,” it adds.
Additionally, the notice reminds firms of their obligation to supervise the work of their CFOs. And, in the case of executives that work with more than one dealer, this includes managing conflicts of interest and preserving confidentiality between the firms.