On August 31, the Investment Industry Regulatory Organization of Canada (IIROC) released another consultation paper with respect to draft competency profiles for its registration categories which is the second phase of a multi-year project. IIROC estimates that they will release the final publication for all profiles by early 2024. For these purposes, a “competency” refers to the knowledge, behaviour, and skills that a person must have to perform effectively in their role. Among other things, the competency profiles are intended to provide IIROC with a benchmark with which to evaluate course providers, give course providers guidance on course content, and help dealers and their representatives better understand IIROC’s expectations.
The competency profiles for directors, executives, and ultimate designated persons (UDPs) are generally the same. They consist of four categories of high-level competencies related to their oversight responsibilities, and focus on each of the general regulatory framework, corporate governance and ethics, duties, liabilities and defences and risk management and oversight. Within each of these high-level competencies are a number of sub-competencies. For the UDP, this would include understanding and applying UDP responsibilities.
In addition to the general competencies set out above which would be applicable to all executives, a registered firm’s Chief Compliance Officer (CCO) would be subject to five more categories of high-level competencies associated with their oversight responsibilities, comprised of: the compliance function and operations, risk management, regulatory reporting, examinations, investigations and actions, compliance responsibilities and CCO duties and obligations. Within these new competency categories are thirteen sub-competencies.
A member firm’s Chief Financial Officer (CFO) would be expected to meet the highest number of competency profiles. In addition to the general competencies for all executives, a CFO would be subject to seven more categories of high-level competencies related to their oversight responsibilities: general financial requirements, capital adequacy, books and records and reporting, credit risk management and customer accounts, inventory, pricing of securities and underwriting, operations and settlement, protection of firm and client assets and other capital provisions. It is proposed that there be thirty-one sub-competencies within those broader categories.
Appendices to the proposal set out the expected knowledge, behaviour, and skills for each competency within each category. IIROC is accepting comments on its proposal until December 29, 2021.
September 30, 2021