IIROC – Issued guidance on reporting business activities

August 17, 2021 – IIROC issued guidance GN-2200-21-001 re material changes to business activities. Subsection 2246(2) of IIROC Rules requires dealer members (dealers) to notify IIROC in writing before making any material change to their business activities.

Purpose of Guidance: Dealer information to assist C-IIROC’s risk-based approach to guide dealer oversight. Helps IIROC prepare for business conduct reviews, financial exams, and trade desk review. Guidance helps dealers determine types of business activity changes they must notify IIROC of and gives details on the expected timing and content of the notifications.

Material Change: What a material change is depends on the facts and circumstances of each case. Generally, dealers should report new business model, line of business, client base, service or product that is a marked departure from dealer’s existing business activities. Change that requires dealer or its staff to obtain new or additional registrations and / or approvals. Dealers should report changes to material business-related operational processes. Dealers should use their professional judgement when determining materiality. If dealer uncertain if planned change would be considered material for the purposes of subsection 2246(2), dealer should err on the side of caution and report the change.

Material Change: IIROC guidance, as well as IIROC Rules, will be effective on December 31, 2021.

For more information, visit www.iiroc.ca.

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