IIROC Considers Lower Capital Requirements For Introducing Brokers

Earlier this week, IIROC published a concept paper that considers lowering the minimum capital requirement for Type 1 and Type 2 introducing brokers. According to IIROC, there is a materially lower risk of client loss in the event of a Dealer Member insolvency in respect to Type 1 and Type 2 introducing brokers as these dealers have, at most, only limited access to client cash or securities.

IIROC is accepting responses to its concept paper until July 9, 2014. In addition to seeking comments on the idea of introducing a lower minimum capital requirement for these types of introducing brokers, IIROC is also requesting feedback on the appropriate level of minimum capital requirement.