Canadian Securities Administrators acknowledges CIRO update on planned rule amendments for an incorporated advisor compensation option

The Canadian Securities Administrators (CSA) acknowledged the Canadian Investment Regulatory Organization (CIRO) Bulletin #25-0297 updating market participants on work to date on CIRO’s project to develop rule amendments for the proposed adoption of an incorporated advisor compensation option. The update reflects CIRO’s continuing work to determine a harmonized approach to allowable individual advisor relationships and related compensation approaches across advisors sponsored by investment dealers and mutual fund dealers. Under the CSA’s Position Paper 25-404 New Self-Regulatory Organization Framework, further policy work within CIRO’s jurisdiction was identified as a specific solution to support CIRO, including possible harmonization of advisor relationship and compensation approaches across the two dealer platforms. CIRO has assumed primary responsibility for determining the appropriate harmonized approach and will develop draft rules to implement an incorporated advisor compensation option, subject to CSA approval; CIRO previously issued a position paper on January 25, 2024 requesting public comments on proposed approaches. The CSA will continue to monitor CIRO’s progress on the rule amendment project as part of its standard oversight activities.