CIRO passes latest CSA review

The Canadian Investment Regulatory Organization (CIRO) has passed its latest oversight review by the Canadian Securities Administrators (CSA), which only had a few recommendations for improvement by the self-regulatory organization (SRO).

In a report published Wednesday, the CSA detailed the results of its latest review of CIRO, testing the SRO’s compliance with its recognition orders. The latest review focused on three specific areas — the SRO’s IT systems, its member intake processes and trading compliance.

The CSA recommended changes in a few areas, which were classified as “medium priority” findings by the provincial regulators. And the SRO has committed to addressing each of the CSA’s findings.

Specifically, the CSA called out the adequacy of the SRO’s internal controls for its system for tracking compliance with the continuing education (CE) requirements; its use of a cloud service that was based outside of Canada; and concerns about the role of staff in its Quebec office when it comes to assessing applications to join the SRO. 

On the issue of the internal controls for the CE tracking system, the report acknowledged that CIRO was in the midst of integrating legacy systems when those controls were initially assessed, and that an independent review was planned for its current fiscal year.

The CSA also found that CIRO was still using a legacy cloud services provider that allowed certain data to transit through servers located in the U.S. That issue was to be resolved by mid-2025, it noted.

Finally, the regulators found that staff in CIRO’s office in Quebec don’t have “clearly defined responsibilities and dedicated staff for analyzing, reviewing and formulating recommendations regarding membership applications” submitted by firms based in the province, which “could result in an inconsistency” with the requirements of the SRO’s recognition order.

According to the report, the SRO pledged to “work toward more clearly defining responsibilities” when it comes to assessing Quebec-based membership applications.

The CSA also noted that CIRO had fully addressed the recommendations from its previous oversight review.

James Langton

James is a senior reporter for Advisor.ca and its sister publication, Investment Executive. He has been reporting on regulation, securities law, industry news and more since 1994.