Are the fines a deterrent? We think not since fines are generally a fraction of what the investor lost .On a statistical basis the number of complaint cases in the industry seems to be stable perhaps even increasing. Suitability continues to be the major issue year after year.
Not only is effectiveness and deterrence value questionable there is actually a potential downside. Giving IIROC collection authority will divert scarce human resources from investigating dealers to fighting court battles. It will also require added legal expenses. Although IIROC will cherry pick its cases there is still the chance it will lose a case and that could have a negative impact on the SRO.
We'd rather see IIROC focus its limited resources on preventing investor abuse by 1.(a) changing its rules for suitability, dealing rep compensation and complaint handling; (b) establishing more cooperative agreements with insurance and banking regulators and most importantly (c) step up its enforcement of dealers and 2. Holding dealers accountable when they reject an OBSI restitution recommendation. That would put money in the pockets of the investor rather than the SRO.