CIRO Aims to Revise Guidance for Order Execution Only Dealers

With rise in DIY investing, protecting investors may require change and clarity in guidance on tools offerings  

TORONTO, Dec. 13, 2024 /CNW/ - The Canadian Investment Regulatory Organization (CIRO) is requesting comments from industry representatives, investor advocates and investors on how to update Guidance for Order Execution Only (OEO) dealers working with Do-It-Yourself (DIY) investors.  

Order Execution Only dealers are firms that generally offer a broad range of investment products for DIY investors to buy and sell at their own discretion. 

CIRO is looking to enhance investor protection for DIY investors by ensuring access to high-quality information from verified sources. Updates to the guidance for OEO dealers could allow the use of low-cost and scalable tools designed to help investors make the most of their investments by making better decisions for themselves based on non-tailored advice. CIRO seeks comments on the range of alerts, proactive notifications, educational information and self-help investing tools that would be useful for OEO dealers to provide.   

"DIY is its own landscape where investors often access their accounts online or on their mobile device, and make investment decisions on the move," said Alexandra Williams, Senior Vice-President of Member Regulation and Corporate Strategy. "Being able to provide DIY investors with appropriate tools and information as well as a 'speedbump' alert if they are about to purchase a high-risk security or remind them that their cash accounts could be doing more for them by being invested, is something that many dealers want to offer. We see it as a win-win because it ensures investors can access high-quality financial information when and where they need it and also have certain protections in place."

CIRO's inaugural Investor Survey found that four out of 10 DIY investors opened their first DIY account within the last three years, and that DIY investors are considerably more likely than other investors to use social media, internet forums or finfluencers as sources of investing information and advice—all unregulated platforms for advice and information where misinformation can circulate unchecked. Changing the Guidance will support and protect a greater number of investors through the delivery of regulated, non-tailored financial information via new tools such as self-assessment, filters and model portfolios, that will meet the evolving needs of Canadian investors.  

"Protecting investors requires us as regulators to get ahead of and respond to changes in how Canadians invest," said Williams. "Considering the popularity of DIY investing, updating the OEO guidance to clarify and enable certain forms of non-tailored advice will have a material impact on investors simply by improving the quality, kind and frequency of information available, so they can make better decisions for themselves." 

For more information, to submit comments, or to review the Bulletin, visit: Non-tailored Advice in the Order Execution Only Channel.

SOURCE Canadian Investment Regulatory Organization (CIRO)

Kate Morris, Senior Corporate Communications Specialist, [email protected], Phone: [phone]