Manitoba Enhances Investor Protections

March 19, 2018 – The Manitoba government has introduced legislation that would strengthen the ability of the Investment Industry Regulatory Organization of Canada (IIROC) to fulfill its mandate to protect investors and ensure investment dealers follow the rules, Finance Minister Cameron Friesen announced today.

“We are taking further action to protect investors in Manitoba,” said Friesen.  “Strengthening IIROC’s ability to collect fines assessed for wrongdoing will enhance the confidence of investors that those who break the rules will be held accountable.”

IIROC is the regulator of investment dealers and is recognized by and operates under authority delegated by the Manitoba Securities Commission (MSC).

The proposed bill would amend The Commodity Futures Actand The Securities Actto give IIROC additional tools to more effectively and consistently enforce rules and discipline those who break them, including:

  • the ability to file decision documents with the courts to enforce payment of fines;
  • civil immunity for IIROC staff to protect them while performing duties as part of their delegated regulatory function; and
  • the clear right to appeal a decision made by an IIROC hearing panel to the MSC.

Fines and costs currently assessed after a hearing can only be enforced as long as the dealer involved remains a member of IIROC, but if the dealer registration is cancelled or if the dealer or representative resigns, IIROC has no way of enforcing collection.  The proposed legislation would strengthen IIROC’s ability to collect fines in Manitoba.

Other jurisdictions in Canada including Quebec, Ontario, Alberta and Prince Edward Island have already provided authority to IIROC to enhance its ability to collect fines, the minister noted.

“We thank the Minister of Finance and the Manitoba government for taking this important step to enhance investor protection – particularly for seniors who rely heavily on their retirement investments and represent the largest number of complaints we receive,” said IIROC president and chief executive officer, Andrew J. Kriegler.  “By introducing these legislative changes, the Manitoba government is demonstrating it is serious about protecting investors and putting wrongdoers on notice that, if you break the rules and abuse the trust of your clients, you will pay the price and be held accountable.”

“We applaud the amendments introduced by the Manitoba government, which will strengthen IIROC’s authority to investigate and prosecute misconduct in the investment industry,” said Elizabeth Mulholland, chief executive officer, Prosper Canada.  “This is particularly important for vulnerable Canadians who are often targeted and for regulators who need tools to protect investors from financial harm and to take strong enforcement action when rules are broken.”

“At CARP, we hear too many stories of seniors who’ve lost their entire life’s savings to rogue rule-breakers who abuse their positions of financial knowledge,” said Wanda Morris, vice president of advocacy, CARP.  “Even one case of misconduct is one case too many.  With fewer workplace pensions, lower interest rates, and increased longevity, our members’ nest eggs are more important than ever.  Today’s changes will give IIROC more authority to demand accountability and seek justice, an important step towards greater investor protection for all Canadians.”

The minister noted the province recently enacted legislation to allow automatic reciprocation and enforcement of orders made in other provinces, to help prevent individuals who have breached securities laws in these markets from trying to set up shop in Manitoba.  Introducing The Commodity Futures Amendment and Securities Amendment Act is a further step forward to better protect investors, he added.

The proposed bill would come into force upon royal assent, Friesen noted.

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For more information:

  • Public information, contact Manitoba Government Inquiry: 1-866-626-4862 or 204-945-3744.