In the most recent 2023-2024 Enforcement Report, the Canadian Investment Regulatory Organization (CIRO) describes recent changes to enforcement policies as well as notable case highlights. The report begins with a description of the new harmonized Sanction Guidelines and Enforcement Staff Policy Statements, as well as CIRO's new centralized intake process for all public complaints and inquiries. Enforcement decision-making has been harmonized across investment dealer and mutual fund rule cases, which is intended to promote consistency from the investigation stage through to formal proceedings. It is also noted that CIRO intends to focus its finite resources on cases with the greatest deterrent impact and send the strongest regulatory message.
Highlighted cases included:
- prohibited recommendations for contracts for differences by an order-execution-only dealer;
- failure by a dealer to implement a proper supervisory system regarding high-risk trading strategies of a registered representative; and
- fines issued to a representative of a mutual fund dealer, who was also permanently banned from conducting securities related business, for a number of rule breaches, including soliciting investments in an outside business activity and failure to disclose conflicts of interest.
In 2024, cases resulted in over $14 million in fines, disgorgement and costs, and hearing panels ordered suspensions and permanent bans in a significant proportion of proceedings involving individuals.
The report notes that CIRO is also beginning its work on harmonizing key enforcement systems and technologies of its predecessor organizations, the Investment Industry Regulatory Organization of Canada and the Mutual Fund Dealers Association of Canada.
July 31, 2024
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