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Measures included in yesterday's Ontario budget will help strengthen investor protection and send a strong message of deterrence to those who would abuse the trust of their clients, say representatives of the Investment Industry Regulatory Organization of Canada (IIROC), CARP and Prosper Canada.
The proposed changes to the Ontario Securities Act contained in the budget will give IIROC the legal authority to pursue the collection of disciplinary fines directly through the courts. As a result, wrongdoers in Ontario will no longer be able to avoid payment simply by leaving the securities industry and abandoning their registration with IIROC.
Similar authority to enforce fines exists in Alberta, Prince Edward Island and Quebec.
"We welcome these important amendments as they will add teeth to existing IIROC rules," said IIROC President and CEO Andrew J. Kriegler. "As a result of the Ontario Government's action, IIROC will be able to more effectively enforce its rules and hold wrongdoers accountable if they harm investors."
"For investors who want to protect their hard-earned savings, this sends an important signal that those who abuse their trust will pay for their wrongdoing," said CARP's VP, Advocacy Wanda Morris.
"Strong consumer protection depends on effective powers of enforcement, so these are very welcome measures – particularly for more vulnerable investors who are often targeted and will benefit from their deterrent effect," said Prosper Canada's CEO Elizabeth Mulholland.
There is nearly $20 million in unpaid fines owing to IIROC in Ontario dating back to 2008 and a total of almost $32 million outstanding across the country. In 2016, IIROC collected approximately 8 per cent nationally of the fines owing by individuals who have breached the regulator's rules by, for example, misappropriating funds from clients, falsely endorsing client signatures and/or making unsuitable recommendations to investors, many of them seniors who have suffered significant financial losses.
IIROC uses proceeds from fines to finance investor protection, investor education and financial literacy initiatives.
