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CIRO – Rule Consolidation Project – Phase 3

Letter Summary:

The Rule Consolidation Project will bring together the two rule sets currently applicable to investment dealers (IDPC Rules) and mutual fund dealers (MFD Rules) into one set of rules applicable to both categories of CIRO Dealer Members going forward.

Overview of the Council’s Comments:

The CAC generally responded positively to the proposals, noting its support for harmonization and simplification of rules, as these promote compliance and clarity for industry.

In its comments, the CAC asked CIRO to clarify its position and plan relating to registrants’ permissible use of personal corporations to conduct non-registerable and registerable activities.

It reiterated its concerns relating to investor protection and its position that clarity should be sought from tax authorities prior to proceeding with any change initiative, given the significant costs to industry of making any change.

Among other specific comments, it was noted that with respect to settlement hearings, the CAC prefers the flexibility of the MFD Rules, which empowers the hearing panel to determine in what circumstances a settlement hearing could be made public, as there may be sufficient public interest in certain cases.