IIROC powers get boost with new law
The regulator of i nvestment dealers across Canada is set be granted the power t o compel evidence and co- operation in its investigations from third parties including banks and phone companies.
Andrew Kriegler, chief executive of the Investment Industry Regulatory Organization of Canada, said new legislation introduced in Alberta on Monday would give the self- regulatory agency powers he hopes will be adopted across Canada.
“There’s a pretty darn good sense of momentum,” Kriegler said in an interview.
Kriegler noted that Prince Edward Island and Ontario recently followed Alberta and Quebec with plans to grant IIROC legal authority to collect fines through the courts.
“I think it’s a sign governments across the country and their securities commissions are committed to investor protection,” he said.
Dealers and advisors registered with IIROC can already be compelled to cooperate with the self- regulatory agency’s investigations, but the new powers included in the Alberta legislation would extend the reach to third parties such as financial institutions and telecommunications companies in the province.
“If you’re trying to find out whether or not funds were misappropriated, it certainly helps if you can follow the trail of the funds,” Kriegler said, adding that phone and financial records “complete the story” for investigators.
“There certainly have been cases in the past across the country where we’ve hit effectively a dead end, not being able to get the information to tell whether or not there’s a real case there. So this will reduce that.”
The new legislation, which was introduced by Alberta Finance Minister Joe Ceci, is intended to provide the agency that oversees investment dealers in the province with a similar suite of investigative tools wielded by provincial securities regulators to police their corner of the capital markets. It also includes provisions to protect IIROC staff and disciplinary tribunals from lawsuits stemming from “good faith” investigations, a protection that is already available to provincial securities regulators.
Ceci said in an interview the government hopes to have the new law passed by early June.
“We’re taking kind of a leadership role in this country …. We’re doing the things we think need to happen to protect our capital markets,” he said, noting that Albert has the second- largest capital market in Canada next to Ontario’s.
Alberta is not participating in the creation of a joint federal- provincial securities regulator with Ontario and five other provinces and territories. Ceci said the province is instead working on a “passport” system that would allow the Alberta Securities Commission to remain independent without leaving regulatory gaps.
“I believe we need to take those active steps,” he said. “We need to mesh with them because we’re going to continue to have independent securities regulation in this province, so we want to make sure we’re aligned going forward.”
Ottawa and four provinces — Ontario, British Columbia, Saskatchewan, and New Brunswick — signed on to create the co-operative regulator in 2014. Prince Edward Island and Yukon joined later, and the target is to have it up and running by next year.