The Proposed Guidance would replace the existing KYC and suitability guidance in its entirety and is intended to conform IIROC’s guidance in all material respects to the CSA’s CFRs. The new guidance explains IIROC’s expectations on the collection of KYC information, its interpretation of certain terms, its expectations on how dealers can in fact “put the client’s interest first” and confirms that KYC requirements are not one-size fits all but depends on a member’s business model, service offerings and clients. Similar to the MFDA’s guidance, IIROC states that dealers should apply the guidance and the suitability determination requirement to all investment products IIROC is currently seeking input into the proposed framework of an Expert Investor Issues Panel, including its creation, structure, and operation. The Panel is intended to enhance IIROC’s investor outreach efforts and help it accomplish its goal of investor protection. The framework includes provisions addressing membership composition, meetings, and responsibilities. The Request for Comments includes an appendix with a comparative study of similar panels of other public interest regulators.
Overview of the Council’s Comments:
The Council is supportive of IIROC’s intent to further expand the inputs it receives from an investor perspective.
Our key comments are summarized below:
• We believe that the Terms of Reference should be modified such that the composition of the Panel membership more directly reflects and promotes diverse perspectives.
• Members should be chosen by a nominating committee comprised solely by members of the IIROC Board’s Corporate Governance Committee.
• If a member resigns or his/her appointment term has expired, the Panel should have a mechanism to appoint new Panel members on its own authority without having to resort back to the nominating committee.
• Panel members should be explicitly provided with an ability to convene special or project-based meetings in addition to their prior scheduled quarterly meetings.
• Consideration should also be given to the funding and governance of Panel-directed research, surveys, and projects.
• Finally, we believe accountability should refer to the process for discussion and dispute resolution (if any is needed) between IIROC executives, the panel, and the IIROC Board.