The Canadian Securities Administrators (CSA) have recently approved amendments to IIROC's Dealer Member Plain Language Rule Book (IIROC Rules) consistent with the CSA's client focused reform (CFR) project.
Among other things, the amendments to the IIROC Rules: (i) provide exemptions from know-your-client (KYC), know-your-product (KYP), suitability determination, and product due diligence obligations in respect of certain account types, such as order execution only and direct electronic access accounts; (ii) update account appropriateness rules to provide consistency with CSA suitability amendments and CFR rules; and (iii) update suitability requirements to incorporate language that is uniform with the CSA's CRF suitability requirements. Guidance outlining IIROC's expectations regarding compliance with product due diligence and KYP obligations was also released.
The amendments were initially published for stakeholder feedback in November 2020. Housekeeping rule changes, which form part of the new amendments, were also published for comment at that time. As we discussed in an earlier post, IIROC also released proposed guidance in June to assist dealers with new KYC and suitability determination requirements.
Meanwhile, most members of the CSA, including Ontario, have either adopted or not objected to amendments to MFDA rules to also ensure uniformity with the CSA's CFR project. The amendments were similarly first published for comment in November 2020.
The amendments to the IIROC rules and MFDA requirements come into force on December 31, 2021, which is the date on which the CSA's CFR rules regarding KYP, KYC, and suitability also come into effect.
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