CIRO Annual Priorities for fiscal 2024

This Bulletin summarizes the significant activities and initiatives that the Canadian Investment Regulatory Organization (CIRO). CIRO will focus on during our fiscal year: April 2023 – March 2024 (FY24). These activities and initiatives take place in the context of post-amalgamation of the Investment Industry Regulatory Organization of Canada (IIROC) and the Mutual Fund Dealers Association of Canada (MFDA) which closed on December 31, 2022, creating New SRO on January 1, 2023.

In addition to the ongoing delivery of CIRO’s core mandate of investor protection and market integrity, we are focused on the following eight priorities:

1. Determine mission, vision, values, and brand for CIRO and develop our three-year strategic plan.
2. Promote the investor perspective through the Office of the Investor and Investor Advisory Panel.
3. Harmonize our regulatory approach.
4. Articulate the plan for an integrated fee model.
5. Maintain an engaged, empowered, and unified staff.
6. Continue to deliver on the regulatory mandate and support investors through industry and regulatory transformation.
7. Strengthen stakeholder relationships.
8. Demonstrate progress on the integration of corporate systems and processes.

This year’s priorities build off the work and previous priorities of the two legacy self-regulatory organizations, the MFDA and IIROC. CIRO will continue to work closely with the Canadian Securities Administrators (CSA) to deliver on our mandate.

1. Determine mission, vision, values, and brand for CIRO and develop our three-year strategic plan

   1. CIRO Strategic Planning
      
      During Fiscal Year 2024 CIRO will consult with all relevant stakeholders to seek input on the mission, vision and values for the new organization. Our strategic plan is an important forward-looking document that sets the vision of the organization. We will be seeking feedback on the strategic plan and all comments will be taken into consideration as we finalize and publish our strategic plan by the end of this Fiscal Year.
   2. Select and rollout new name and logo
      
      The Board and leadership of CIRO believed it was important to develop a new name as quickly as possible to establish a clear and distinct identity that evokes trust and integrity. In addition, we wanted to provide members with the new name as quickly as possible to ensure they are given a reasonable implementation period (until December 31, 2024) to make all updates necessary to reflect the new name and logo where they are required. The new name Canadian Investment Regulatory Organization (CIRO) will officially be used on June 1.

2. Promote the investor perspective through the Office of the Investor and Investor Advisory Panel

   1. Development of IAP workplan and delivery of mandate
      
      We will support the Investor Advisory Panel (IAP) in the development of their workplan and delivery of their mandate. This includes providing education and guidance to Members and investors on key investor protection requirements in a number of areas including complaint handling, designating a trusted contact person and determining client risk profile. We will also engage in internal and external outreach to various stakeholders to discuss investor issues.

   2. Conduct an investor survey
      
      To help inform the strategic direction and future priorities of the Office of the Investor we will conduct an investor survey to gather data on their experiences and outcomes.

   3. Launch a dedicated site for the Office of the Investor and Investor Advisory Panel
      
      A dedicated section on the website will be developed for the Office of the Investor IAP to provide information relevant to the mandate of the office such as research and education materials.

3. Harmonize our regulatory approach
   
   During the next fiscal year, we will continue to look for ways to harmonize both our teams and practices in the following areas:
   1. Compliance
      
      The integration of the compliance department and its operations with a focus on aligning Investment Dealer and Mutual Fund Dealer compliance processes where appropriate based on workplan. Furthermore, we will align our exam approach with the CSA for Client Focused Reform phase 2 work. Work will also begin on determining the best approach for an integrated risk model and align the best regulatory approach for consistency across the organization.
   2. Enforcement
      
      Work will soon commence with the integration of the Enforcement department and its operations with a priority of developing uniform Sanction Guidelines. We will also establish a centralized Complaint Intake Process for investors.
   3. Proficiency and Registration
      
      We will develop a work plan to harmonize Continuing Education requirements. We will also seek to obtain delegation which will lead us to begin planning to operationalize authorities in Québec with respect to Mutual Fund Dealer Representative Registration.
   4. Policy
      
      We will conduct a phased plan to consolidate Investment Dealer and Mutual Fund Dealer rules. Our first step will be to publish the proposed Phase 1 consolidated rules for public comment, followed by announcing the proposed approach on directed commission/personal incorporation to be made available to an expanded group of registered individuals.
4. Articulate the Plan for an Integrated fee model
   
   Work has begun to determine the final fee model that addresses requirements set out in the Recognition Orders and Memorandum of Understanding.
5. Maintain an engaged, empowered, and unified CIRO team
   
   CIRO will continue to demonstrate progress on Equity, Diversity, Inclusion, and Anti-Racism initiatives. A Staff Advisory Committee has been created and have been engaged on developing plans for Days of Significance and staff Lunch and Learns. All people leaders, from Managers to our Executive Leadership Team have participated in training about unconscious bias.
   
   People leaders have also begun to receive change leadership training providing best practices to effectively support their teams, while proving guidance on how to develop a custom action plan tailored to the leadership style of each manager and their team’s needs. The training has four modules and will be delivered in the coming months.
6. Continue to deliver on the regulatory mandate and support the investor through industry and regulatory transformation
   1. Compliance
      
      CIRO will be finalizing a joint report with the CSA on the Client Focused Reforms sweep that was undertaken over the last year. We plan to enhance the Financial Operations examination program for business continuity planning testing, as outlined in the next steps of the Order-Execution Only Service Level working group.
      
      The Mutual Fund Division will also be conducting an examination to assess compliance with the Continuing Education Program.
      
      Obtain delegation and begin planning and operationalize authorities in Québec with respect to Mutual Fund Dealer compliance examinations.
   2. Enforcement
      
      CIRO will continue to pursue legislative authority across the country that will improve Enforcement’s ability to collect evidence and provide statutory protection against malicious lawsuits while performing our regulatory responsibilities in good faith.
   3. Proficiency and Registration
      
      Work continues to enhance our Proficiency Regime by finalizing the competency profiles for Investment Dealer approval categories, and by initiating a competitive request-for-proposal process to select new education service provider(s).
   4. Market Surveillance
      
      In 2022, IIROC signed a Memorandum of Understanding with the Montreal Exchange on cross-asset surveillance of the securities and derivatives markets to help mitigate the risk of market integrity breaches. We will continue to build on our cross-asset surveillance capability.
      
      We also plan to administer an industry-wide Business Continuity Planning test. Also, work continues with the CSA on the Short Selling Consultation.
      
      We will create a plan for external-facing access to aggregated Market Data (Public ADP).
   5. Policy
      
      CIRO will look to finalize and implement amendments to modernize Dealer Member rule requirements for derivatives that are materially harmonized with the implemented version of National Instrument 93-102 Derivatives: Business Conduct.
      
      CIRO has begun the process of finalizing and announcing implementation of rule amendments to support the industry’s move to T+1 trade settlement. Notice 23-0054 Amendments to facilitate the investment industry’s move to T+1 settlement was issued for public comment on April 20, 2023.
      
      We will develop a proposed harmonized rule requirement to facilitate more timely transfers of an expanded group of account assets amongst investment dealers and mutual fund dealers.
      
      We will continue to work with the CSA to determine a regulatory framework for the trading, and offering of, crypto assets to institutional and retail clients.
   6. Member Services and Innovation
      
      In April 2023, we conducted a roundtable exercise with Members who are approved to trade in crypto-asset products and some of their key counterparties.
      
      We look forward to conducting a cybersecurity table-top exercise with small and medium Dealer Members to improve their cybersecurity resilience.
      
      CIRO has established and will continue to promote availability of the Innovation function.
      
      The Innovation function at CIRO represents our continued commitment to supporting innovation and modernization in the investment industry to create better outcomes for investors and enhance capital market efficiencies. For the current fiscal year, the Innovation function will focus on initiatives including:
   • Continuing industry engagement to discuss the modernization of rules around back-office arrangements and subordinated debt financing
   • Conducting stakeholder outreach to determine areas of need, growth and transformation, and identify emerging trends
7. Strengthen stakeholder relationships
   
   Developing and maintaining strong relationships is important to the work we do as an SRO. We will continue to find avenues to engage with our members on areas of interest to them. We will also work closely with the provincial and other regulators on areas of mutual interest. To strengthen our stakeholder relationships, we will:
   • Determine optimal structure and role of regional and national councils.
   • Determine revised advisory committee structure.
   • Collaborate with the Financial Services Regulatory Authority of Ontario (FSRA) to become a credentialling body and support the creation of a public registry for financial advisors/planners.
   • Collaborate with other regulators on financial title protection.
   • Conduct innovation outreach to various stakeholder groups and prioritize areas of focus.
   • Implement mechanisms for the smooth integration of new MFD members in Québec.
8. Demonstrate progress on the integration of corporate systems and processes
   
   CIRO will facilitate the initiation of our year one integration plans and begin mid and long-term planning tied to strategic plan for years two and three. We will also complete all agreed IT changes in support of new brand launch.
   
   Our priorities for FY24 reflect the continued work since the amalgamation of IIROC and the MFDA.
   
   As a conduct and prudential regulator, we will continue to take a risk-based approach to business conduct, trading conduct, and financial and operational reviews of CIRO-regulated firms to ensure they comply with statutory and CIRO requirements, and to encourage a strong culture of compliance. As a market regulator, we will continue to oversee both debt and equity trading in Canada to ensure the integrity of our capital markets. For more details of our compliance activities and priorities, see the New SRO Compliance Priorities Report: Helping Firms with Compliance.
   
   Our Policy teams will continue to strive to deliver timely, relevant, comprehensible and proportionate regulation that minimizes undue impact. Our quarterly Policy Priorities publication is an important way we help Dealer Members, investors and other stakeholders anticipate, plan for and/or comment on our current and upcoming policy initiatives.
   
   In keeping with our oversight role, we will continue to investigate and enforce our rules and hold CIRO-regulated Dealers and individual registrants responsible for their actions through various disciplinary sanctions. For more details on the legacy organizations’ enforcement activities, see IIROC’s 2021-22 Enforcement Report, or the MFDA’s 2021-22 Enforcement Report.

For more information on CIRO, please visit www.ciro.ca.