CIRO Rule Citations Quick Reference Cheat Sheet

Registrants must identify, disclose, and manage material conflicts of interest. Where a conflict cannot be managed, it must be avoided. Conflicts include referral arrangements, proprietary product incentives, compensation conflicts, and personal financial dealings with clients (Rule 3115).

Dealers must have policies and procedures to achieve best execution for client orders, addressing price, speed of execution, certainty of execution, and the overall cost of the transaction when costs are passed on to clients.

Requirements for opening client accounts: identity verification, KYC collection (Rule 3202), account documentation, delivery of account-opening documents. Sets the framework for what must be in the account file before the first transaction. KYC information must be reviewed at least every 36 months, or every 12 months for managed and discretionary accounts (Rule 3209(4)).

A designated Supervisor must approve every new account no later than one business day after the initial trade (Rule 3214). A margin account needs a signed margin account agreement before it is opened (Rule 3247). A derivatives account needs a derivatives trading agreement, a risk disclosure statement and the designated Supervisor's written approval before the first derivatives trade (Rules 3251 and 3254).

Before making a trade recommendation, registrants must assess suitability at the account level, not just at the individual trade level. Triggered at account opening, before recommendations, upon KYC trigger events, and on account transfer. Concentration, asset mix, and alignment with objectives are all assessed.

Acknowledgement letter within 5 business days (Rule 3725); substantive response within 90 days (Rule 3726(4)); the response must describe the client's options, including the ombudsman service (OBSI). Complaint files must be kept (Rule 3728). OBSI can recommend compensation up to $350,000 (verify at obsi.ca).

Record-keeping requirements: trade blotters, ledgers, client account statements, order memoranda, trade confirmations and other records. Records must be kept for at least 7 years from the date they are created unless another period applies (Rule 3803).

Dealers must establish and maintain a supervisory system: written supervisory procedures, enough designated Supervisors, trade review processes, periodic on-site branch reviews, and ongoing monitoring of registered individuals. Failure to supervise is itself a violation.

Foundational definitions for Universal Market Integrity Rules: marketplace, participant, client, order, trade. Read in conjunction with all other UMIR rules.

General trading conduct requirements: fair, orderly, and efficient markets. Prohibits wash trades, painting the tape, marking the close, and other manipulative practices.

Before executing a short sale, the participant must have a reasonable expectation of being able to borrow the securities for delivery (locate requirement). Naked short selling without a locate is prohibited. Locate must be obtained before order entry, not at settlement.

Marketplace participants must make reasonable efforts to achieve best price for client orders. Must consider all accessible marketplaces. The obligation exists regardless of which marketplace the order is routed to.

Trades executed in dark pools (order facilities without pre-trade transparency) must satisfy minimum price improvement requirements over the consolidated best bid or offer. Without the required price improvement, dark trading is not permitted.

Requirements for order entry: accurate identification of order type, client vs proprietary designation, short sale markers, and compliance with marketplace order types. Misclassifying an order (e.g., marking a short sale as a long) is a UMIR violation.

When a participant fills a client order from its own inventory (principal trades), the trade must achieve best execution for the client. The participant's profit on the principal trade cannot come at the client's expense.

CIRO can halt, delay, or suspend trading in a security when required for market integrity (e.g., pending material news). During a halt, no orders may be entered, amended, or executed. Halts may be market-wide or security-specific.

Registrants must establish the client's identity and insider status, and have enough information on the client's personal and financial circumstances, investment needs and objectives, investment knowledge, risk profile and investment time horizon to meet the suitability obligation. The client confirms the information, which must be reviewed at least every 12 months for managed accounts and every 36 months otherwise (s.13.2(4.1)).

Referral arrangements between a registrant and another person or company must be set out in a written agreement and disclosed in writing to the client before the referral service is provided. Disclosure must include the nature of the arrangement, compensation paid, and any resulting conflicts.

Firms and registered individuals must identify material conflicts of interest, address them in the client's best interest, and avoid any that cannot be addressed. Individuals must report conflicts to their firm and get its consent before acting; firms must disclose material conflicts to affected clients. Outside business activities are a common source; IDPC Rule 2554 requires the dealer's prior approval.

NI 31-103 §13.12 restricts registrants from lending to or borrowing from clients, with narrow exceptions (for example, a related person with the firm's written approval). IDPC Rule 3115 bars Approved Persons from personal financial dealings with clients, including borrowing, lending, accepting outside consideration, and acting under a power of attorney, unless a listed exception applies.

Registrants must keep accurate records of all client transactions, correspondence, account documents, and financial records for 7 years. Records must be in a form that is accessible for regulatory inspection.

Governs recognized exchanges, ATSs, and other marketplaces in Canada. Requires fair access, transparent order display, and regulatory oversight. TSX, TSX-V, Cboe Canada, and dark ATSs are governed under this NI.

Trading rules applicable to marketplace participants: order-handling obligations, protection against trading through better prices (order protection rule), and best execution requirements at the marketplace level.

Risk controls required for electronic trading systems and direct electronic access (DEA): pre-trade filters, credit limits, kill-switch capabilities, and participant responsibility for DEA client orders.

Requires mutual funds to file a simplified prospectus, annual information form, and Fund Facts document. The Fund Facts (2-page summary) must be delivered to investors before purchase. Delivery is the trigger for the right of withdrawal.

Investment and operational restrictions for conventional mutual funds: no more than 10% of net asset value in any one issuer (s.2.1, with exceptions such as government securities); no short selling beyond permitted amounts; no borrowing for investment purposes beyond prescribed limits; concentration and diversification requirements.

Alternative mutual funds are defined and governed in NI 81-102, with higher limits than conventional mutual funds: cash borrowing up to 50% of NAV and short selling up to 50% of NAV, with combined borrowing and short selling capped at 50% of NAV (ss.2.6 to 2.6.2), and up to 20% of NAV in one issuer (s.2.1(1.1)).

Prohibits deferred sales charges on new mutual fund purchases (effective June 1, 2022 in most jurisdictions). Governs trailer fee payment rules and disclosure. Front-end load and no-load structures remain permitted.

Governs the prospectus process for securities offerings: long-form prospectus requirements for IPOs and other new issues. Purchasers have a statutory right of withdrawal after receiving the prospectus. Governs the conduct of issuers, underwriters, and dealers in the distribution process.

Federal statute imposing AML and ATF obligations on reporting entities including securities dealers. Requires: client identification, beneficial ownership determination, business relationship records, LCTR for cash $10,000+ (within 15 calendar days), STR for suspicious activity (no threshold; as soon as practicable). Electronic Funds Transfer Reports are not on FINTRAC's list of securities-dealer reports. 5-year record retention for AML-specific records. Administered by FINTRAC.