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IIROC suspends its rule regarding commissions for the advisors, executors



August 20, 2018 09:45

Photo : Freepik

Thecanadian regulator of the securities trade (IIROC) suspended its directive concerning trailing commissions paid to advisors the performers (who do not offer advice), that provide funds to series A.

In section 2 of the guidance Note on the services and activities of the order execution without guidance, the regulator stipulates that commissions, trailing commissions that are paid to companies offering accounts without advice create a conflict of interest. He demanded then that one of these companies favours the supply of funds that do not pay commissions to follow up when possible. If this was not the case, IIROC requested that the company reimburse the customer for the part of the commission paid related to the ongoing services of the board.

A certain degree of uncertainty

The organization has said since the canadian securities administrators (CSA) will be made in September next their requirements related to the commissions as part of applying to all registrants. IIROC said that it ” will harmonize its requirements with those of the CSA “.

“We are aware that until this process is completed to the CSA and that our requirements are harmonised as a result, companies offering accounts without conseirèglementationls could experience a degree of uncertainty about the plan,” says IIROC. He adds, however, that the companies have the obligation to continue to manage conflicts of interest and in the best interests of clients.

The organization also calls on the companies that offer accounts without the guidance to take account of the positions expressed by the CSA. It is a reminder that this suspension does not alter the application of its guidance note on the services and activities of the order execution without guidance, which came into force last April.


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