IIAC takes issue with IDA notices

There comes a time in every kid’s life where they have to challenge their parents. In this case, the Investment Industry Association of Canada, which used to be part of the Investment Dealers Association, has a beef with the SRO.

In early July the IIAC sent Paul Bourque, the IDA’s senior vice-president of member regulation, a letter expressing “concerns about the process by which IDA notices are issued.”

Deborah Wise, the IIAC’s assistant director of policy, says some members are confused as to how to interpret these frequently released notices. She says notices are meant to explain a by-law — which is created through extensive consultation with industry members — but that “more and more members are feeling that notices are becoming requirements.”

Wise cites notice MR0343, Other Business Activities as an example (click here to read the notice). She won’t say specifically what part of the notice reads like a by-law, just that members had a problem with the document in general. “There were some requirements in there that members were feeling weren’t so much guidance, but more requirements that if they didn’t follow that they could be penalized.”

The IDA disputes the IIAC’s accusations. “Notices are drafted in response to an industry request for guidance on existing rules, on interpretation of existing rules and implementation of existing rules,” says Bourque. “We do not make policy through notices or bulletins. We have no jurisdiction to do that. We provide guidance in response to industry requests.”

This isn’t a new concern, but it is the first time the IIAC has contacted the IDA on this issue. That’s because the IIAC is relatively new and until now, members haven’t had a soapbox from which to speak.

“It’s come up from time to time and I think members are growing more concerned particularity with this notice,” says Michelle Alexander, the IIAC’s director of policy. “(And now) The IIAC has been able to give members an opportunity to raise concerns.”

The letter was sent on July 3, and the IIAC has yet to hear back from the IDA. Bourque says he’s drafting a response, but refused to estimate when it will be ready. He does reveal that the response will maintain the IDA’s view that notices are provided for guidance, not to introduce new regulations.

Alexander expects to formally discuss this issue with the IDA at some point in the future, though no meetings have been set up.

Filed by Bryan Borzykowski, Advisor.ca, bryan.borzykowski@advisor.rogers.com