IIROC Notice 10-0163 Request for Comments – Proposed over-the-counter securities fair pricing rule and confirmation disclosure requirements

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IIROC Notice 10-0163 Request for Comments – Proposed over-the-counter securities fair pricing rule and confirmation disclosure requirements

Letter Summary:

The Canadian Advocacy Council of the CFA Institute Societies of Canada (the CAC) appreciates the opportunity to comment to the Investment Industry Regulatory Organization of Canada (IIROC) on the proposed changes to over-the-counter securities fair pricing rule and confirmation disclosure requirements We support initiatives that enhance the protection of investors’ interests. We, therefore, support the proposed obligation for Member dealers to provide or obtain fair and reasonable prices for OTC securities sold to or purchased from their clients, whether retail or institutional.

Overview of the Council’s Comments:

We also support the inclusion of a requirement to disclose the yield on fixed income securities on trade confirmations delivered to clients. In addition, we believe that the mark-up or mark-down on trades on OTC equity securities should be required to be disclosed on trade confirmations. The proposed inclusion of the statement “The investment dealer’s remuneration on this transaction has been added to the price in the case of a purchase or deducted from the price in the case of a sale” is an improvement on the current state of disclosure, but does not go far enough to give retail investors concrete information on what they, in fact, have paid for their trades.