New Guidance Greenlights OEO Platform for Sample Portfolios

What You Need to Know:

• CIRO’s updated OEO guidance modernizes self-directed platforms by allowing helpful information and tools, while keeping a strict ban on recommendations.
• OEO dealers can’t endorse buy/sell/hold decisions, so clients retain responsibility (with dealers still screening for basic self-directed appropriateness at onboarding).
• Tools like screeners, asset-allocation sample portfolios, self-assessments and alerts are permitted if they’re factual, neutral, client-controlled and don’t steer toward a specific security or action.
• OEO Platforms get clearer permission to offer robust tools (and combinations of tools), but must strengthen governance—especially around neutrality, disclosures, and oversight of third-party content.
• For ETF Issuers, neutral, data-driven screeners may intensify competition on measurable attributes (fees, liquidity, spreads, performance) and create more demand for issuer education and transparency.
• Expect higher scrutiny and stronger disclosure expectations for Finfluencers, pushing content toward education and away from promotion that could look like unregistered recommendations.

The Canadian Investment Regulatory Organization (CIRO) released updated guidance detailing how Order Execution Only (OEO) dealers should manage their platforms and services. The new guidance outlines regulatory expectations, acknowledging that digital brokerages now provide various tools and educational materials to assist investors in understanding the markets. Its main aim is to permit helpful information and decision-making aids, while ensuring investor protection and upholding the key rule that OEO dealers cannot offer investment recommendations.

CIRO has clarified that OEO dealers are permitted to offer sample portfolios, provided these are based on asset allocation and do not reference specific securities. This change brings more certainty than previous guidelines and gives all OEO platforms the green light to offer sample portfolios with filtering tools to aid investors with their decisions. It also clarifies that OEO dealers are prohibited from naming individual exchange traded funds (ETFs) or stocks in any of their sample portfolios.

The Core Principle Remains: Prohibition of Recommendations

It is worth re-iterating that the most important rule in the OEO framework is the prohibition of recommendations. OEO dealers are not permitted to recommend buying, selling or holding specific securities. Because of this prohibition, they are exempt from the normal suitability requirement that applies to advisory accounts. In other words, the dealer is not responsible for determining whether an investment is suitable for the client; instead, the client bears full responsibility for their decisions. The guidance emphasizes that a recommendation occurs when the dealer endorses a specific investment decision for the client, which is fully prohibited.

Although OEO dealers do not provide suitability assessments, they still must determine whether it is appropriate for a client to open a self-directed account. During onboarding, the dealer should assess whether the client understands the nature of self-directed investing. Certain red flags—such as clients who clearly lack investment knowledge or repeatedly seek advice—may indicate that a self-directed account is not appropriate. In those cases, the dealer may need to suggest alternative services such as advisory accounts.

Decision-Making Support

The guidance acknowledges that modern trading platforms often provide decision-making supports such as educational materials, alerts, notifications, screeners and analytical tools. CIRO permits these tools if they provide factual and neutral information rather than directing investors toward a specific investment action. The guidance also allows sample portfolios with asset allocations, which has been a significant step forward for many OEO platforms.

Filtering tools

The use of filtering tools is permitted when relying on objective, industry standard criteria such as cost, exposure, size or liquidity. These tools allow clients to choose and customize inputs, clearly explain how results are generated and draw from the dealer's full product shelf rather than favouring particular securities.

It's important to keep in mind that this tool might lean toward larger ETFs because they usually have higher trading volume and smaller spreads, making them appear more liquid. On the other hand, newer or less actively traded ETFs—even if they have similar implied liquidity—might seem less liquid.

Sample flow chart for filtering tools

Sample portfolios

To illustrate generic investor profiles or themes, sample porfolios may be offered. However, these samples must be limited to asset allocation frameworks and must not include specific securities or derivatives as that would imply a recommendation. Dealers should explain how these portfolios align with general investor goals, highlight associated risks, provide educational context and regularly review and update them. To avoid endorsement, dealers should offer multiple portfolio options and/or allow clients to easily edit allocations, so outcomes remain client directed.

How investors may use these tools to make investment decisions

Self assessment tools

Risk questionnaires, goal setting tools or other self-assessment tools are acceptable where all inputs are client provided and outputs are framed in general, non advisory language. Dealers should clearly explain how investor classifications are determined, allow clients to review and validate results and support these tools with educational resources on portfolio construction, diversification and time horizons.

Rebalancing tools and alerts

Generally permissible as long as they operate strictly within client defined parameters, do not communicate endorsement of any investment decision and do not grant the dealer discretion to act independently. Together, these safeguards are intended to preserve investor autonomy while preventing OEO platforms from replicating advice based services.

Sharing tools while protecting investors

If OEO dealers provide decision-making tools (such as the above), they must also implement safeguards to prevent them from being interpreted as recommendations. These safeguards include clear disclosures that the tool is informational only, ensuring the outputs do not endorse specific investment decisions, manage conflicts of interest, and regularly review the tool's design and outputs. When several tools are used together, the overall result must remain non-advisory and must not guide the client toward a specific investment decision.

Overall, CIRO's updated approach reflects the rapid growth of DIY (do-it-yourself) investing and digital brokerage platforms. The guidance aims to strike a balance between modernized direct investing (DI) platforms and investor protection by allowing OEO dealers to provide decision-support tools and information while maintaining strict prohibition on personalized recommendations. The regulator also hopes that better information from regulated platforms will reduce the influence on retail investors' of unregulated sources such as social media or online forums. The updated guidelines could present ETF issuers with new chances to collaborate with OEO dealers, allowing them to offer enhanced education on asset allocation, product structures, and investment strategies.

Implications for OEO Platforms

The new guidelines provide more clarity about what can be provided on OEO platforms and create many opportunities. The guidelines explicitly allow filtering tools, sample portfolios and a combination of tools to serve direct investing clients, which can be a major step forward for these platforms. Also, the guidelines explicitly point out that OEO platform may be held responsible for third-party statements (including finfluencers) made on their behalf, advocating stricter compliance of third-party contents. Overall, the guidance legitimizes robust tools (screeners, asset‑allocation portfolios, self-assessment) but forces a redesign toward neutrality, transparency and client control.

• Digital Tools and Screeners: OEO dealers can offer tools like ETF screeners, sample portfolios and self-assessment tools to help investors, but these must not steer clients toward specific securities. Platforms should ensure these tools are clearly educational or analytical, rather than investment recommendations, and review algorithms to prevent outputs from being interpreted as advice.
• Recommendation Boundaries: Online brokerages must separate information from recommendations. Although they're exempt from suitability requirements, features like product lists must remain neutral and avoid influencing client decisions.
• Disclosure and Transparency: Brokerages must state that self-directed accounts provide execution and information only, not personalized advice. Clear disclosures throughout the platform help investors understand their responsibilities and reduce confusion.
• Monitoring Client Appropriateness: While suitability isn't required, firms should assess if self-directed trading suits a client at account opening and monitor for signs it may not. When needed, platforms should provide warnings, education or suggest advisory services.
• Compliance and Content Governance: Brokerages must closely oversee all content—internal and third-party—to ensure it fits OEO rules. They may be held responsible for statements by third parties on their behalf, including finfluencers, and must ensure compliance.
• Opportunity to Expand Investor Education: The guidance encourages robust investor education. Platforms can improve the investor experience by offering more market insights, risk tools, and financial literacy resources, without breaching regulatory limits on advice.

Implications for ETF Issuers

ETF issuers may also be affected by the changes that may be implemented by OEO dealers. The CIRO guidance requires ETF filtering tools to remain neutral, emphasizing objective product characteristics like fees, liquidity and performance over marketing partnerships. This shift means ETF issuers may need to prioritize investor education and focus on transparent, data-driven competition.

Over time, ETF innovation and product design may increasingly cater to criteria favored by these neutral screening tools, making clarity and quantitative factors more important for product success.

• ETF Screeners and Rankings: With CIRO guidance, brokerage platforms must keep ETF screeners neutral, ranking ETFs based mainly on objective factors like size, fees, liquidity and performance. This makes these features more important for issuers, as marketing partnerships play a reduced role.
• Investor Education: ETF issuers may need to increase their educational efforts, explaining concepts like index methodology, portfolio construction, diversification and risk since brokerages emphasize investor responsibility and avoid recommendations.
• Data-Driven Competition: As screeners rely on objective data, competition among ETF issuers may shift toward measurable attributes such as fees, bid-ask spreads, liquidity and performance, benefiting products strong in these areas.
• ETF Product Development: Issuers will likely focus more on quantitative criteria when designing new ETFs, ensuring their products fit within self-directed brokerage tools. Adapting to these standards is increasingly vital for long-term success.

Implications for Finfluencers

As investor protection becomes a higher priority for regulators and OEO platforms, finfluencers may face increased scrutiny and pressure to be credible and transparent. Those who clearly disclose sponsorships and provide balanced, educational content are likely to gain investor trust and possible collaboration opportunities with OEO platforms, while those making speculative or undisclosed recommendations risk reputational and regulatory consequences. Regulatory bodies may introduce stricter enforcement and disclosure requirements for finfluencers, encouraging a shift from product promotion to educational and financial literacy content.

• Credibility and Transparency Expected: With heightened focus on investor protection, audiences demand more clarity. Finfluencers who disclose sponsorships and offer balanced analyses gain trust and potential partnerships, while those promoting speculative or undisclosed products risk their reputation.
• Regulators Target Finfluencer Activity: CIRO guidance stresses investment recommendations must come from regulated sources. As platforms cut back on advice, finfluencers may face stricter oversight if promoting securities without proper registration, leading to tougher enforcement and clearer rules on disclosures.
• Shift Toward Education: To comply with regulations, finfluencers may increasingly provide educational content about investing principles rather than promoting specific products. Emphasizing financial literacy helps them stay within regulatory boundaries.

CIRO's new guidance for OEO platforms allow dealers to offer sample portfolios and decision-support tools, provided they remain neutral and do not make investment recommendations or include specific securities. Tools like screeners, sample portfolios, and self-assessment tools are permitted if designed with objectivity and clear disclosures. Overall, the guidance clarifies what OEO platforms can offer, aims to enhance investor protection, reduces reliance on unregulated sources, and encourages education and neutrality across OEO brokerage services.