(September 26 – 18:00 ET) – The Investment Dealers Association has a slew of regulatory initiatives underway, as revealed in a recent update from the IDA.

The association is currently developing rules to define the circumstances where referral fees and commission splitting may be permitted, and when trade names may be employed by firms and salespersons. This initiative comes out of the CSA Distribution Structures Position Paper, with the IDA drafting rules intended to ensure compliance with the CSA paper and to clarify the association’s current position on these issues.

The IDA is also preparing a proposal for submission to the CSA requesting further relief from suitability requirements for full-service dealers on trades where advice isn’t offered. The IDA and the Joint Industry Compliance Group’s Full-Service Brokers Suitability Sub-Committee have been looking at the issue over the past year.

A subcommittee of the Joint Industry Compliance Group has been reviewing the Minimum Standards for Retail Account Supervision. IDA staff have made further changes to the policy and it will be returned to the Joint Industry Compliance Group for review and approval.

The IDA has also developed a policy on whistleblowing. The policy requires firms and their partners, directors, officers, and reps to report to the applicable firm and/or SRO items such as material changes in registration information, customer complaints, securities related claims pending or disposed, and civil litigation claims. The policy has been revised as a result of industry consultation and will be submitted to the board.

The IDA is currently drafting amendments to separate the characteristics of discretionary and managed accounts. The association says the line between discretionary and managed account structures has been blurred. As a result, discretionary accounts must be restricted and used only as a temporary measure, instead of the current practice which sees these accounts consistently renewed annually.

Other initiatives under consideration by the IDA include: day trading; the use of corporate veils; district council exemptions; electronic signatures; U.S. withholding tax regulation amendments; and capital requirements for underwritings.
-IE Staff