Firm Application Registration Guide
Promoting a Culture of Compliance
We take our registration process seriously. Registering new registrants is not a mechanical, check-the-box process. It is not enough to demonstrate proficiency, pass a detriment check, fill out the required forms, and pay the fee.
We do not think that a narrow approach serves either the firm or the investing public well. A narrow approach at the outset would also create an added burden for our examinations team at its initial registrant examination some 18 to 24 months after registration. The better informed we are about your business before you register, the more likely it is your firm will be and stay compliant with securities regulation.
In addition to the demonstrating proficiency, we expect new registrants to demonstrate that they have thought about compliance and have in place fundamental compliance, supervisory, and risk management systems.
What Do We Look for in a Policy & Procedure Manual (PPM)?
- Compliance function and process
- Ultimate designated person’s (UDP) responsibilities and duties (daily monthly and annual)
- Chief compliance officer’s responsibilities and duties (daily monthly and annual)
- PPM updates and acknowledgement to read
- Branch and head office supervision
- Registration and renewal of registration
- New account opening procedures, including know-your- client (KYC) and suitability (cradle to grave account opening process)
- Account supervision
- Know Your Client (KYC) update process (including how often)
- Money laundering and anti-terrorism compliance
- Proxy voting
- Outside business activities
- Custody and segregation of client assets
- Trade confirmations and account statements
- Disclosure when recommending related party or connected securities
- Subscriptions and redemptions (cradle to grave process, including documents that need to be completed)
- Personal trading
- Insider and early warning reporting
- Disaster recovery and business continuity plan (including incapacitation of key personal)
- Oversight of outsourced services
- Adverting sales communication and other client communications
- Referral arrangements and, if applicable, soft dollar arrangements
- Borrowing for securities purchases and disclosure to clients
- Human resources (hiring and training)
- Conflicts of interest and disclosure to clients
- Tied selling
- Capital requirements, monitoring capital adequacy, and how excess working is calculated
- Bonding and insurance
- Books and records
We May Need Clarification
When considering your application we may want to meet with the CCO and UDP of the firm to understand the firm’s business objectives.
Six to nine months after registration, our compliance team will visit your office for a post registration inspection. They will conduct an informal inspection of the firm’s operations to make sure that your procedures and operations reflect the business plan and PPM and meet the minimum requirements set out in NI 31-103.
The inspection provides an opportunity for your firm’s key personnel and the compliance team to continue an open dialogue about your business and your particular compliance challenges.
Registration Requirements & Categories
Section 34 of the Securities Act states that a person must not; (i) trade in a security or exchange contract; (ii) act as an adviser; (iii) act as an investment fund manager; or (iv) act as an underwriter, unless the person is registered in accordance with the regulations and in the category prescribed for the purpose of the activity. The categories of registration are set out in Part 2 (for individuals) and Part 7 (for firms) of National Instrument 31-103 Registration Requirements, Exemptions and Ongoing Registrant Obligations.
Applying for Registration
An individual or firm that wants to register must file an application form. Under National Instrument 33-109 Registration Requirements and National Instrument 31-102 National Registration Database, individuals file the individual application form, Form 33-109F4, on the National Registration Database or NRD. Firms file the application form, Form 33-109F6, as a paper filing, by fax, or scanned in in an email.
Branches and Sub-Branches
All branches, including sub-branches and home offices, need to be registered. Applications must be filed through the National Registration Database (NRD). Please refer to Form 33-109F3 Business Locations Other than Head Office (previously Form 7).