Securities Law

31-103CP - Registration Requirements [CP Proposed - Lapsed]

Published Date: 2008-02-29
Document(s):

Concurrently Published:

Table of Contents

Part 1 - Definitions and Interpretation 1

1.1 Introduction 1
1.2 Definitions 1
1.3 Business Trigger for Registration 1
1.4 Applying the Business Trigger Factors 3
1.4.1 Securities Issuers 3
1.4.2 Mortgage Investment Companies 4
1.4.3 Venture Capital 4
1.4.4 Principal Trading Activities 5
1.4.5 Activities Not Commonly in the Business of Trading or Advising in Securities 5

Part 2 - Categories of Registration 7

2.1 General 7
2.2 Exempt Market Dealer 7
2.3 Restricted Dealer 7
2.4 Trading in Securities - Exemption for Advisers 8
2.5 Advising in Securities 8
2.6 Restricted Portfolio Manager 9
2.7 Associate Advising Representative 9
2.8 Investment Fund Manager 10
2.8.1 Marketing and Wholesaling Activities of Investment Fund Managers 10
2.9 Chief Compliance Officer and Ultimate Designated Person 11
2.9.1 UDP 11
2.9.2 CCO 11
2.9.3 The Same Person as UDP and CCO 11
2.9.4 UDP or CCO as Adviser or Dealer 12
2.10 Multiple Registrations 12
2.10.1 Multiple Firm Categories 12
2.10.2 Multiple Individual Categories 12
2.10.3 Individual Registered in a Firm Category 12
2.10.4 Multiple Registration Categories: Solvency Requirements 12
2.10.5 Multiple Registration Categories: Conduct Requirements 12

Part 3 - SRO Membership 13

3.1 Requirement for SRO Membership 13

Part 4 - Fit and Proper Requirements 13

4.1 General 13
4.2 IDA Proficiency Requirements 14
4.3 Examination-Based Proficiency Requirements 14
4.4 Relevant Experience 14
4.5 Restricted Dealer and Restricted Adviser - Proficiency for Representatives 15
4.6 Bankruptcy or Insolvency after Registration 15
4.7 Capital and Insurance Requirements 15
4.7.1 Capital, Insurance, and Client Assets 16
4.8 Financial Records 16
4.9 Criminal Charges 16
4.10 Foreign Head Office 17

Part 5 - Conduct Rules 17

5.1 Account Opening and Recordkeeping 17
5.2 Know-Your-Client 18
5.3 Relationship Disclosure Information 19
5.3.1 Content of Relationship Disclosure Information 19
5.3.2 Promoting Client Understanding 19
5.4 Suitability of Investments 19
5.5 Recordkeeping - General 20
5.6 Activity and Relationship Records 20
5.6.1 Activity Records 20
5.6.2 Relationship Records 21
5.7 Third Party Access to Records 21
5.8 Complying with Recordkeeping Requirements 21
5.9 Compliance System 22
5.9.1 Purpose of Compliance System 22
5.9.2 Elements of an Effective Compliance System 22
5.9.3 Setting Up a Compliance System 23
5.9.4 Supervision 24
5.10 Outsourcing 24
5.11 Responsibility to Prevent Client Confusion 25
5.12 Client Complaints 25
5.12.1 Firms Registered in Québec 25
5.12.2 Definition of Complaints 25
5.12.3 Dispute Resolution Service 25
5.12.4 Disclosure of Complaints 26
5.12.5 Handling of Complaints 26

Part 6 - Conflicts of Interest 26

6.1 Definition of Conflict of Interest 26
6.1.1 General 26
6.2 Responding to Conflicts of Interest 27
6.2.1 Mechanisms 27
6.2.2 Consistency 27
6.2.3 Conflicts of Interest Between Clients 27
6.3 Avoiding Conflicts of Interest 27
6.4 Controlling Conflicts of Interest 28
6.4.1 General 28
6.4.2 Organizational Structures 28
6.4.3 Remuneration 28
6.4.4 Multiple Roles for Individuals 28
6.4.5 Outside Business Activities 29
6.5 Disclosing Conflicts of Interest 29
6.5.1 General 29
6.5.2 Timing 29
6.5.3 When Disclosure as Inappropriate 29
6.6 Registrant Relationships 30
6.7 Issuer Disclosure Statement 30
6.8 Allocating Investment Opportunities Fairly 30
6.9 Acquiring Securities or Assets of A Registered Firm 31
6.10 Relationship Pricing 31
6.11 Referral Arrangements 31
6.11.1 Application 31
6.11.2 Clients 31
6.11.3 Written Agreement 32
6.11.4 Disclosure to Clients 32

Part 7 - Suspension and Revocation of Registration 33

7.1 General 33
7.2 Termination of a Registered Individual 33
7.3 Automatic Suspension 33
7.4   Reinstatement 34
7.5 Surrender of Registration 34
7.5.1 Registered Firms 34
7.5.2 Registered Individuals 35

Part 8 - Exemptions From Registration 36

8.1 International Dealers and International Advisers 36
8.2 Mobility Exemption 36