FAIR Canada submitted a comment letter to IIROC warning against securities related outside business activities undertaken by approved persons outside of the Dealer Member. The comment letter recommended that IIROC amend its rules to ensure that all securities related and investment product activity, including marketing, selling and advising, is required to be conducted through a Dealer Member. FAIR Canada is concerned that securities related outside business activity poses significant risk to retail investors.
Additionally, the comment letter suggested that IIROC: (i) impose an obligation to ensure that the distinction between Dealer Members’ business and any approved outside business activity is properly disclosed; (ii) make Deal Members liable for harm caused by the outside business activity of their representatives; (iii) research whether insurance should be required to protect investors from harm caused by outside business activity; and (iv) impose a duty for all approved persons to report breaches or suspected breaches of securities regulation.
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