News & Events

CSA / ACVM
For Immediate Release
May 23, 2019

 

IIROC and CSA provide update on conflicts of interest arising from soliciting dealer arrangements

 

Calgary and Toronto – The Investment Industry Regulatory Organization of Canada (IIROC) and the Canadian Securities Administrators (CSA) today published an update about the management of conflicts of interest arising from soliciting dealer arrangements.

Following initial targeted consultation in 2018, the CSA published CSA Staff Notice 61-303 and Request for Comment Soliciting Dealer Arrangements, inviting further feedback from stakeholders. After the comment period ended and after reviewing the feedback, IIROC and the CSA determined that the publication of the guidance contained in IIROC Notice 19-0092 Managing Conflicts of Interest arising from Soliciting Dealer Arrangements (the Notice) would provide the most appropriate and effective means of addressing regulatory concerns associated with soliciting dealer arrangements.

IIROC consulted with IIROC Dealer Members (Dealers), its advisory committees, the CSA and considered the comments received in response to the CSA’s Staff Notice and Request for Comment, when drafting the guidance.

The Notice sets out IIROC’s view that in some cases, conflicts of interest arising from soliciting dealer arrangements can be managed through appropriate policies and procedures. In other cases, where conflicts are or appear to be unmanageable, they should be avoided. For example, Dealers should avoid arrangements that contemplate one-sided or success-based fees in contested director elections.

“Today’s guidance provides our Dealers with greater clarity about the circumstances where conflicts of interest associated with soliciting dealer arrangements can be managed or should be avoided,” said Irene Winel, Senior Vice-President, Member Regulation and Strategy, IIROC.

“We welcome IIROC’s guidance concerning soliciting dealer arrangements,” said Louis Morisset, CSA Chair and President and Chief Executive Officer of the Autorité des marchés financiers. “We believe it will offer greater certainty for dealers in managing these arrangements.”

Soliciting dealer arrangements are agreements that incentivize Dealers to encourage securityholders of an issuer to vote their securities or take action in connection with an acquisition or other transaction involving the issuer. For instance, an issuer may agree to pay a Dealer a fee for each vote solicited from securityholders in respect of a securityholder meeting. These arrangements can raise regulatory concerns about the ability of a participating Dealer to comply with IIROC’s conflicts rule and related guidance.

The Notice is available on IIROC's website.

IIROC is the national self-regulatory organization that oversees all investment dealers and their trading activity in Canada’s debt and equity markets. IIROC carries out its regulatory responsibilities under Recognition Orders from the provincial securities commissions that make up the Canadian Securities Administrators (CSA). 

The CSA, the council of the securities regulators of Canada’s provinces and territories, co-ordinates and harmonizes regulation for the Canadian capital markets.

 
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For Investor inquiries, please refer to your respective securities regulator. You can contact them here.

Investment Industry Regulatory Organization 
of Canada:

Andrea Zviedris
Manager, Media Relations and Public Affairs
416-943-6906
azviedris@iiroc.ca

 

For CSA media inquiries, please refer to the list of provincial and territorial representatives below or contact us at media@acvm-csa.ca.

 
Kristen Rose
Ontario Securities Commission
416-593-2336
 
Hilary McMeekin
Alberta Securities Commission
403-592-8186
Brian Kladko
British Columbia Securities Commission
604-899-6713
 
Sylvain Théberge
Autorité des marchés financiers
514-940-2176
Jason (Jay) Booth
Manitoba Securities Commission
204-945-1660
Sara Wilson
Financial and Consumer Services
Commission, New Brunswick
506-643-7045
 
Shannon McMillan
Financial and Consumer Affairs
Authority of Saskatchewan
306-798-4160
 
Steve Dowling
Government of Prince Edward Island
Superintendent of Securities
902-368-4550
David Harrison
Nova Scotia Securities Commission
902-424-8586
 
Jeff Mason
Nunavut Securities Office
867-975-6591
Renée Dyer
Office of the Superintendent of Securities
Newfoundland and Labrador
709-729-4909
 
Tom Hall
Office of the Superintendent of Securities
Northwest Territories
867-767-9305
Rhonda Horte
Office of the Yukon Superintendent
of Securities
867-667-5466