The Canadian Investment Regulatory Organization (CIRO) announced the upcoming launch of its Disgorgement Distribution Program. The Program builds on CIRO’s existing ability to seek disgorgement orders, following a finding of registrant misconduct. In certain cases, the Program will now enable CIRO to distribute funds collected pursuant to a disgorgement order to investors who have been financially harmed by registrant misconduct.
Disgorgement is a monetary sanction imposed by CIRO hearing panels which require a wrongdoer to repay funds, gains, or any other type of value obtained from their misconduct.
Coming into effect on April 1, 2026, the Disgorgement Distribution Program, one of CIRO’s strategic priorities, is a significant milestone to enhance investor protection, improve regulatory outcomes, promote fairness, and support confidence in Canada’s investment industry.
Previously, investors who suffered financial harm as a result of registrant misconduct could not receive payments through CIRO for losses, even when disgorgement was ordered in disciplinary proceedings. The Disgorgement Distribution Program advances investor protection by introducing a mechanism to distribute disgorged funds to investors who suffered direct financial losses, and aligns CIRO with other Canadian securities regulators that have implemented similar frameworks to return funds to harmed investors. Investors continue to rely on existing avenues such as firm-level complaints, the Ombudsman for Banking Services and Investments (OBSI), arbitration, and civil claims.
“CIRO’s Disgorgement Distribution Program is an important step forward in the protection of Canadian investors,” said Andrew Kriegler, President and CEO, CIRO. “By requiring individuals and firms to return gains obtained through misconduct disgorgement is an important deterrence tool, and through the development of the Program announced today we will be able to help harmed investors as well.”
The Disgorgement Distribution Program includes clear eligibility criteria, governance controls, and oversight mechanisms to ensure that any distributions are handled transparently, consistently, and in the best interests of harmed investors.
For more information about the Disgorgement Distribution Program, including eligibility criteria, processes and Frequently Asked Questions, please visit: Disgorgement Distribution.
