August 1, Dear Ms. Keshwar,

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1 Sonia Keshwar Director, Proficiency Investment Industry Regulatory Organization of Canada (IIROC) 121 King St. West, Suite 2000 Toronto, ON M5H 3T9 August 1, 2017 Re: Request for Comments on IIROC Notice Continuing Education Consultation on Plain Language Rule Proposals and Ongoing Review (the Proposed CE Review ). Dear Ms. Keshwar, CFA Institute 1 appreciates the opportunity to provide comments on the Continuing Education (CE) related Plain Language Rewrite (PLR) proposals. CFA Institute believes this consultation is timely, relevant, and in the best interests of investors and other market participants. We provide comments to each of the CErelated PLR proposals below. Comment 1: IIROC seeks comment as to the goal of CE, and the broader scope of what qualifies as CE, under the PLR proposals. We concur that CE programs perform a critical role in maintaining high proficiency standards. While professionals may be able to demonstrate knowledge or proficiency at a point in time, we believe it is necessary for these professionals to maintain this knowledge or otherwise run the risk of seeing it diminish. 1 CFA Institute represents the views of investment professionals before standard setters, regulatory authorities, and legislative bodies worldwide on issues that affect the practice of financial analysis and investment management, education and licensing requirements for investment professionals, and on issues that affect the integrity and accountability of global financial markets. Page 1

2 Hence, it is a vital that supervisory agencies promote robust CE programs that require completion of educational activities that can help achieve and maintain quality in professional services. Moreover, the investment management industry is characterized by rapid changes, advancing technology and increasing complexity. Thus, investment professionals must be compelled to further their knowledge, skills, and abilities. Overall, we believe that the changes in goals and scope of the CE program that IIROC is proposing are appropriate. We see certain benefits in opening-up the types of courses that Approved Persons can enroll in. Firstly, as IIROC states, having more choices will allow professionals to work on their professional growth and development. Secondly, and perhaps most importantly, the ability to receive credit for a broader range of training should result in much better compliance and higher participant satisfaction. The reason we support IIROC s new approach is because our very own voluntary continuing education program at CFA Institute is quite flexible in terms of types of activities that qualify for CE. Our members can design their own CE program and search our library of CFA Institute resources which includes courses, webcasts, local events by our member societies, and content offered by third-party providers. Members can also earn credit for resources that are not included in our library, such as training offered by your employer or activities for other investment-related designations and regulatory bodies. There are however eligibility requirements that an activity must meet to qualify for CE: 1) learning activities should be educational in nature and geared towards increasing the knowledge, skills, and abilities of an investment professional; and (2) the educational content should relate to one or more of our lifelong learning topics derived from the Global Body of Investment Knowledge (GBIK). Below we provide examples of approved continuing education activities: Self-study (i.e., reading, researching, webcasts, etc.) Employer-based (i.e., in-house training) Educational programs sponsored by CFA Institute, member societies, and third-party Approved Providers Educational activities offered by unaffiliated organizations/providers in any language/format Continuing education activities for other investment-related designations Page 2

3 Comment 2: IIROC seeks comment on the recognition of relevant CE accredited by other regulators. Comment is also welcome regarding the desirability and benefit of extending recognition to CE completed to fulfill requirements of other regulated platforms where the course may not be directly relevant to the business of dealing and advising in securities. We support the approach of extending recognition to CE completed to fulfill requirements of other regulated platforms. This concept is in line with the proposed changes to the CE program in regards to expanding options for courses to Approved Persons. This also would further increase harmonization across CE programs run by regulators across Canada. However, we do support the Canadian Advocacy Council for Canadian CFA Institute Societies (CAC) 2 approach to evaluate the courses on a case by case basis. Comment 3: IIROC seeks comment on the PLR Proposal relating to compliance manual training. In this topic, we would agree that the compliance manual training should involve an in-person seminar or webinar accompanied by some form of assessment. Comment 4: IIROC invites comment on the PLR Proposal permitting CE participants to repeat ethics courses. We agree with the proposal to permit CE participants to repeat ethics courses in two cycles. This proposal would encourage ethics training. Ethics training is of utmost importance for professionals seeking to serve investors and other market participants. Our mission at CFA Institute is to lead the investment profession globally by promoting the highest standards of ethics, education, and professional excellence for the ultimate benefit of society. We believe ethics is an important pillar in anyone s training and so we would be very much in favor of measures that recognize its importance. 2 The Canadian Advocacy Council for Canadian CFA Institute Societies (CAC) submitted a letter to IIROC on June 22, Page 3

4 Comment 5: IIROC invites comments regarding the reduction of the CE cycle to two years and related amendments in the PLR proposals. We have no position in the reduction of the CE cycle to two years. We agree though that a shorter cycle should result in more frequent and ongoing CE. The changes proposed in compliance credit hours are also adequate considering the reduction in the CE cycle. To provide some reference, in our voluntary continuing education program, CFA Institute encourages all members to participate and to complete at least 20 hours of CE activities each year, including 2 hours in the content areas of Standards, Ethics, and Regulations (SER). Comment 6: IIROC invites comment with respect to this proposal to bring the substantive review of CE courses in-house and implement a cost recovery model. We realize the need for IIROC to address the conflict of interest presented by CSI s involvement in CECAP. Consequently, we would understand that IIROC brings this function in-house. This should add further transparency to the accreditation process, resolve the conflict of interest with CSI and likely result in a more robust framework. It is important to note that by bringing the function in-house, IIROC would be able to oversee the entire accreditation process for courses, thus ensuring that the CE program offerings are aligned with its CE program objectives. Comment 7: IIROC seeks comment on the PLR proposal to restrict the VPP to the CSC In this topic, we agree that the VPP should be restricted to the CSC and not include the CPH. Comment 8:IIROC seeks input as to whether we should maintain grandfathering relief in the PLR proposals. We have no position on the issue of grandfathering, although we would note that we have observed as well that grandfathering relief granted by other regulators is typically temporary in time and not indefinite. Page 4

5 Comment 9: IIROC seeks input on the PLR proposals regarding credit for rewriting the CSC and CPH. We have no position on the issue of credit regarding rewriting the CSC and CPH. Comment 10: IIROC seeks comment regarding the carry forward reductions in the PLR proposals and input as to whether they should be further curtailed to simplify the system and encourage frequency of CE. In this subject, we would note that reducing carry forwards would definitely result in more frequent and ongoing CE. Additionally, reducing carry forwards would also strengthen the CE offering by providers as there would be more demand for such programs since carry forwards would be capped. However, the downside to the reduction of carry forwards would be increased cost to participants for the need for more frequent CE and possibly penalizing those providers who offer courses that represent more CE credit hours. In this line of thinking, lets says hypothetically that the CFA program were to be qualified as a CE activity. Should an individual take CFA Level II, which requires 300 hours of study, he would likely exceed the 20 credits of Professional Development (PD) and the 10 credits for Compliance training (because of the ethics training). Should carry forwards be capped this may reduce incentives for those pursuing these types of activities. As a result, we would recommend a balanced approach were carry forward caps are instituted but perhaps some allowances are given to programs that have demonstrated value and rigor, such as the CFA program. Comment 11: IIROC seeks comment on the PLR proposals relating to Dealer Member reporting and consequences for non-compliance. We have no position on reporting or consequences for non-compliance. Page 5

6 Thank you for the opportunity to comment. We would be pleased to discuss our comments in greater detail, or to provide any other assistance that would be helpful. If you have any questions, please do not hesitate to contact us. Yours sincerely, On behalf of CFA Institute: Iñigo Bengoechea, CFA CFA Institute Director, Program Recognition 477 Madison Avenue New York, NY Tel: Page 6