The Canadian Investment Regulatory Organization (CIRO) has issued a white paper that offers regulatory and technological solutions to improve account transfers, a major source of frustration for investors.

The financial system in Canada faces significant inefficiencies in account transfers, largely due to outdated processes, inconsistent standards, and fragmented communication. Delays in account transfers can disrupt financial planning and lead to adverse financial consequences for investors, including missed investment opportunities. Account transfers are also a persistent operational frustration for financial institutions as well. Addressing these delays is critical for enhancing the Canadian capital markets system and improving investor outcomes.

“Account transfers are consistently a top complaint that CIRO hears from investors and Member firms alike,” said Alexandra Williams, Senior Vice-President, Strategy, Innovation, and Stakeholder Protection at CIRO. “Modernizing the account transfer system is an important way by which CIRO can improve investor outcomes and reduce frustration, but also enhance the effectiveness and efficiency of the industry – both key commitments of our strategic plan.”

Modernizing account transfers will require a multi-faceted approach that includes automation of systems, standardization of transfer procedures, and harmonization of regulations. CIRO’s work to support this effort takes a two-phased approach:

• Phase 1: Defining the Problem & Laying the Groundwork for Change
• Phase 2: Implementing Solutions & Driving Industry-Wide Adoption

The Phase 1 white paper, released today, examines the root causes of account transfer issues and presents both immediate and long-term solutions, including rule amendments and recommendations to enhance firm transfer operations.

Also released today are proposed rule amendments which, if adopted, will require all CIRO Dealer Members to use automated systems for eligible transfers and clarify that electronic communications must be used where available. They also stipulate the timeline for the receiving dealer to inform the client of transfer impediments and set a standard settlement period of 10 clearing days for account transfers (including for transfers with impediments).

In addition, the Phase 1 white paper also offers a vision for an industry-wide technology solution, designed through a collaborative effort by institutions across the financial and investment industry, that would digitize the account transfer process and allow for real-time processing and standardized data formats. This new system promises to be open, interoperable, and transparent and would ensure a seamless data exchange across Canada’s financial system.

CIRO is inviting:

• comments on its proposed rule amendments
• proposals from interested firms seeking to develop the technology solution.

Phase 2 of the white paper, which is expected in 2026, will provide updates on the progress, implementation strategies, and more wide-spread adoption of the regulatory standards and technology tool across the financial system.