Investment Industry Regulatory Organization of Canada, a governing body for all Canadian debt and equity markets, investments and brokerages, dealers, and providers. It collaborates closely with the Financial Industry Regulatory Authority of the United States (FINRA) to “support and enhance oversight of firms with international operations.”
The IIROC is like the FINRA. It has set regulations that require all financial institutions and individuals in the country to maintain client correspondence and documents, including all forms, within a specified time. Failure to adhere to these requirements can result in severe fines and significant legal action.
IIROC Archiving requirements for Electronic Communications
The IIROC Rules 29.7 outlines the rules that require firms to preserve written business communications (advertisements and sales literature) and supervise employees. So Telegram, Messenger, and Viber need to be recorded. Also, WeChat monitoring is essential to ensure your compliance with IIROC. Here are some key points from the rule.
- Records relating to business activities, financial transactions, and communication must be kept by firms for five years starting at the date of their creation. All sales literature and related documents must also be kept for two years after creation. The Association must have access to all archival sales literature and correspondence.
- The content of the communication will determine if the communication is relevant to the dealer member’s business and, thus, if this requirement covers it.
- It doesn’t matter what type of device was used to send the message or if it is company-issued or personal.
- Dealer members must create systems and programs that comply with record retention and retrieval requirements for all communication methods allowed at the firm. These communications include messages posted on Twitter, Facebook, blogs, chat rooms, email, and content sent by SMS and email.
- Dealers should be able to keep all transaction-related documents for clients. This includes emails, trade confirmation statements, and notes from oral communications.
- Dealers are permitted to use social media sites as long as they are appropriately supervised and comply with regulatory or legislative requirements, such as record retention.
- Dealer Members must exercise extreme caution when engaging with third-party communication, including using consumer messaging apps to communicate with clients. The facts and circumstances of each case will determine whether or not a third-party communication is considered Dealer Member’s communication.
IIROC Fines For Non-Compliance
According to the IIROC website, penalties for IIROC-regulated companies can include the following:
- A reprimand.
- There are fines of up to $5 million for each contravention, plus a minimum of three times the profits or losses avoided due to the violation.
- Conditions imposed on employment approvals in one or more job categories.
- Suspension or revocation of current approval for one or more types of employment at any time and under any terms.
- Prohibition on the right to apply for future approval in any one or more type of employment
- Permanent or temporary ban on employment approvals in any or all job categories.
The penalties for firms that IIROC regulates can include the following:
- A reprimand
- Fines up to $5 million for each contravention, plus a three-fold increase in profit or loss due to the infringement.
- Conditions imposed on membership
- Suspension can be granted for any duration and under any terms.
- Expulsion
- Any other suitable remedy or penalty
For more information on WeChat archiving IIROC and the fines included with it, visit our website at https://www.leap.expert/.
