Investment industry body announces amendments to rules on client identifier requirements

Organization also issues investor alert warning against fraudsters, phishing websites

Investment industry body announces amendments to rules on client identifier requirements

The final phases of changes to the Investment Industry Regulatory Organization of Canada’s Universal Market Integrity Rules and Dealer Member Rules regarding the use of client identifiers took effect on July 26.

These amendments require client identifiers and/or designations — either via legal entity identifiers, which generally apply to clients treated as institutional accounts, or via account numbers for most retail clients — on every order for a listed equity security sent to a marketplace on a client’s behalf. Such changes have been in place for corporate and government debt securities in Canada since Oct. 18, 2019.

“The expansion of mandatory client identifiers to Canada’s equity as well as debt markets now provides for a far more comprehensive and timely view of market activity, enhancing our capability to perform both market monitoring and investigations,” said Andrew Kriegler, the organization’s president and chief executive officer, in the news release.

The changes seek to more effectively safeguard investors, to support healthy capital markets and to align with jurisdictions which have similarly required client identifiers for better risk management, surveillance and investigatory capabilities.

The enhanced trading data as a result of these client identifiers are expected to assist the organization in conducting their regulatory functions, such as market monitoring, investigations and data analysis, and in supporting the efforts of the Canadian Securities Administrators in line with their public interest mandate.

“With the implementation of our new state-of-the art surveillance system in 2019 and mandatory client identifiers we are well-positioned to meet the continuously evolving trading and investing environment,” said Victoria Pinnington, the organization’s senior vice-president of market regulation, who thanked the industry for spending time and resources to support this initiative.

The organization engaged in consultation, including through two public comment periods, so that these changes would help it work toward its regulatory goals while minimizing the effects to the market.

The organization has also recently issued an alert to warn Canadian investors of fraudsters who are misrepresenting themselves as legitimate and regulated institutions, or divisions or affiliates of such, through numerous channels, such as via phishing websites, brochures or other documents. The organization urged those who have fallen for such scams to reach out to their securities regulator.

Some tips for investors to safeguard themselves include the following, according to the organization:

  • Verify that the institution is regulated by the organization
  • Confirm websites through checking the domain names, through cross-referencing contact details with other resources and through checking misspellings or variations in company names or in email addresses
  • Conduct an internet search to ensure that the website is legitimate, not a duplicate

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