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Supervisor Branch Procedures Cheat Sheet
The supervisory and branch operations sections of the CIRO exams cover Rule 3900 (supervision), Rule 3800 (records), complaint handling under the Rule 3700 series, AML obligations, and the specific duties of designated supervisors. This sheet presents the key rules as decision flowcharts and checklists. Rule numbers are CIRO Investment Dealer and Partially Consolidated (IDPC) Rules unless stated otherwise. Verify current CIRO rules at ciro.ca. Last reviewed: 2026-09-29.
1. CIRO Rule 3900 - Supervisory Framework Overview
Rule 3900 requires every dealer member to establish, maintain, and apply a supervisory system that provides reasonable assurance that the business is conducted in compliance with applicable requirements. The system must be documented and kept current.
Three-tier supervisory structure:
- Senior management: Responsible for overall compliance culture; sets tone at the top; responsible for approving supervisory policies and procedures
- Compliance department: Designs and monitors the supervisory system; conducts internal reviews; reports material breaches to senior management and CIRO
- Branch/line supervisors (designated supervisors): Day-to-day oversight of registered representatives; review and approve trades, KYC updates, account openings, and complaints
Written supervisory procedures (WSP): The dealer must maintain written supervisory procedures covering all lines of business. WSPs must be updated when rules change and must be accessible to all supervised individuals. An outdated or absent WSP is itself a Rule 3900 violation (section 3904).
Supervisory controls minimum requirements under Rule 3900:
- Trade review procedures (daily, weekly, periodic)
- Account opening and suitability review procedures
- KYC update procedures and trigger-event monitoring
- Conflict-of-interest identification and management
- Outside business activity monitoring
- Client complaint intake, escalation, and resolution procedures
- AML/ATF procedures per PCMLTFA requirements
- Training and continuing education requirements for registered individuals
2. Rules 3800 and 3900 - Branch Operations Checklist
Rule 3900 (supervision) and Rule 3800 (records) drive the operational checks at branch offices of dealer members. Key requirements:
| Requirement | Frequency | Notes |
|---|---|---|
| Branch audit / inspection | Periodic (frequency set by firm policy) | Where supervision records are kept at a branch, the dealer must conduct periodic on-site reviews (Rule 3908(4)); findings documented |
| Books and records review | Periodic (per dealer WSP) | Trade blotters, account records, order tickets, KYC files, complaint logs all reviewed |
| Designated supervisor review of accounts | Daily and monthly (Rule 3945) | Trade-level and account-level review; exception reports generated for flagged activity |
| Registrant continuing education verification | Annual | CIRO CE runs in 2-year cycles (2026-2027 is current), with 1 to 3 hours of annual mandated CE from 2026; supervisor tracks completion |
| OBA disclosure review | As disclosed; annual confirmation | Supervisor confirms no new undisclosed activities |
3. Trade-Review Thresholds
No single numerical threshold is prescribed in CIRO rules for trade-review triggers. Dealers must establish their own thresholds in their WSPs. The following thresholds represent common industry practice and exam-tested scenarios:
| Flag | Typical threshold | Supervisory action |
|---|---|---|
| Trade size | Exceeds $X (set by dealer policy) | Supervisor pre-approval or same-day post-trade review |
| Trade frequency - churning | Turnover ratio > 6x per year in a fee-based account; or commissions > stated threshold | Supervisor investigation; potential compliance referral |
| Single-issuer concentration post-trade | >10% flag; >20% acute | Suitability review; documentation in account file |
| Trade outside stated objective | Any speculative trade in a capital-preservation account | Supervisor review; KYC update if client preference changed |
| Unusual pattern | Trades in thinly traded securities; round-lot concentrations; matched trades | AML review; possible STR filing; escalation to compliance |
4. Rule 3214 Account Approval - Branch Manager Touchpoints
The designated Supervisor must approve every new account no later than one business day after the initial trade (Rule 3214). Pay particular attention to:
- All margin account openings - review of net worth, income, and suitability for margin trading before account is activated
- All options account openings - review of investment knowledge and experience; decide which strategies are appropriate and restrict the account if needed (Rule 3251)
- All short-selling accounts - confirm understanding of the UMIR short-sale rules and margin implications
- Any account for an employee of another Dealer Member - that dealer's written approval is needed first, and the account is designated a non-client account (Rule 3214(6))
- Accounts where the rep has flagged an elevated risk or compliance concern at opening
- Re-approval when a client's account type is upgraded (e.g., cash to margin, or options Level 1 to Level 2)
Documentation: The supervisor's approval must be documented with a signature or electronic equivalent and a date. "Verbal approval" without a written record does not satisfy Rule 3908(2), which requires a system to record every supervisory review and approval. The account record must show the date of approval, the approving supervisor's identity, and the basis for approval.
5. IDPC Rule 3700 Series - Complaint Handling Timeline
Rules 3720 to 3728 set minimum standards for receiving, acknowledging, investigating, and resolving client complaints. Know these timelines precisely - they appear on exams.
| Step | Timeline | Content requirement |
|---|---|---|
| Acknowledgement letter | Within 5 business days of receipt | Name, title and contact details of the person handling the complaint; explanation of the firm's complaint process; CIRO's complaint brochure; the 90-day timeline for a substantive response (Rule 3725) |
| Substantive response | Within 90 days of receipt (Rule 3726(4)) | Decision or final response; if still investigating, written update on status and expected completion date |
| OBSI escalation notice | In the substantive response letter (Rule 3726(3)) | Client must be informed of the right to escalate unresolved complaints to OBSI (Ombudsman for Banking Services and Investments) |
OBSI details:
OBSI (Ombudsman for Banking Services and Investments) is an independent dispute resolution service. OBSI can recommend compensation up to $350,000 per complaint (verify: the cap is subject to periodic OBSI policy review). OBSI recommendations are not binding on the firm. Clients must complete the firm's internal process before OBSI will accept the complaint.
6. AML Branch Oversight Under PCMLTFA
Supervisors are responsible for AML oversight at the branch level. Know these thresholds and timelines precisely.
| Report type | Trigger | Filing deadline | Filed with |
|---|---|---|---|
| LCTR (Large Cash Transaction Report) | Receipt of $10,000 or more in cash in one transaction, or in 2 or more transactions within a consecutive 24-hour window (24-hour rule) | Within 15 calendar days after receiving the cash | FINTRAC |
| STR (Suspicious Transaction Report) | No monetary threshold - reasonable grounds to suspect money laundering or terrorist financing | As soon as practicable after reasonable grounds to suspect are established | FINTRAC |
Securities dealers also file Large Virtual Currency Transaction Reports and Listed Person or Entity Property Reports. Electronic Funds Transfer Reports are not on FINTRAC's list of securities-dealer reports.
Retention requirements:
- Client identification records: 5 years after the relationship ends (or 5 years after account closure)
- LCTR copies: at least 5 years from the date the report was created
- STR copies: 5 years from date of filing
Note: CIRO's own books-and-records rules under IDPC Rule 3800 series (Rule 3803) and NI 31-103 §11.6 require 7 years for account records, trade records, and correspondence. The PCMLTFA's 5-year retention for AML-specific records and CIRO's 7-year requirement for general records coexist. Apply the longer period (7 years) to records that satisfy both categories.
Tipping-off prohibition:
Disclosing to a client that a STR has been filed is a criminal offence under PCMLTFA. This applies to all staff who become aware of the filing, not only the filer.
7. Audit-Prep Checklist - Books and Records by Category
| Record category | Examples | Retention |
|---|---|---|
| Account records | KYC forms, account applications, suitability assessments, signed disclosures | 7 years (NI 31-103 §11.6 and IDPC Rule 3803) |
| Trade records | Order tickets, trade confirmations, blotters, allocation records | 7 years |
| Correspondence | Client emails, letters, notes of verbal conversations | 7 years |
| Complaint records | Complaint intake forms, investigation notes, resolution letters, OBSI referrals | 7 years |
| Financial records | General ledger, trial balance, customer account statements, margin calls | 7 years |
| AML-specific records | Client ID verification, LCTR copies, STR copies, risk assessments | 5 years (PCMLTFA); use 7 years if also meeting CIRO requirement |
8. Designated Supervisor Responsibilities
A designated supervisor is a registered individual approved by CIRO to supervise the conduct and activities of other registered individuals. Designation requires CIRO approval (the Supervisor Exam, plus the exams required of the people supervised, and at least 2 years of relevant experience under IDPC Rule 2603). Key responsibilities:
- Review and approve new account openings as required under Rule 3214
- Review and approve KYC updates for supervised individuals' accounts
- Daily review of trades using exception reports; investigate flagged activity
- Receive, log, and escalate client complaints per Rule 3700 series
- Monitor for outside business activities and ensure timely disclosure
- Conduct or oversee periodic branch reviews and submit findings to compliance
- Enforce AML/ATF procedures; escalate STR candidates to the firm's AML compliance officer
- Maintain written records of all supervisory actions taken, including approvals, denials, and investigations
- Verify continuing education completion for each supervised registrant
- Report material breaches to compliance immediately; never allow a breach to continue in order to preserve a business relationship
Test Yourself: 5 Supervisory Questions
Q1. A client submits a written complaint by email on Monday, March 1. By what date must the acknowledgement letter be sent?
Show answer
By March 8 (within 5 business days). The letter must name the handler and give their contact details, explain the complaint process, include CIRO's complaint brochure, and state the 90-day timeline for a substantive response (Rule 3725).
Q2. A client deposits $12,000 in cash to fund a new account. What AML report is required and when?
Show answer
A Large Cash Transaction Report (LCTR) must be filed with FINTRAC within 15 calendar days. The $12,000 cash deposit exceeds the $10,000 threshold. The supervisor must ensure the LCTR is completed and filed even if the client's identity is already known and the transaction appears legitimate.
Q3. A registrant discovers a colleague has been conducting outside consulting work without disclosing it to the firm. What should the supervisor do?
Show answer
Escalate immediately to compliance. An undisclosed OBA breaches IDPC Rule 2554, which requires the Approved Person to inform the dealer and get its prior approval. The supervisor should not attempt to resolve it informally. The registrant must formally disclose the activity, and compliance determines whether it is permissible, requires conditions, or must be terminated.
Q4. A supervisor files a Suspicious Transaction Report on a client. The client calls the next day asking about the recent review of their account. What must the supervisor NOT do?
Show answer
The supervisor must not disclose that an STR was filed. Tipping off the client that a STR exists is a criminal offence under PCMLTFA. The supervisor can state that routine compliance reviews are conducted but must not confirm or deny the STR.
Q5. Under the CIRO rules, what is the minimum documentation required for a branch manager's approval of a margin account?
Show answer
A written or electronic record showing the supervisor's identity, date of approval, and the basis for approval (that the KYC supports margin trading suitability). Verbal approval without a written record does not satisfy Rule 3908(2), which requires a system to record supervisory reviews and approvals.
Related Cheat Sheets
Last updated: 2026-09-29. OBSI $350,000 cap is subject to OBSI policy review - verify at obsi.ca. CIRO Rule 2554, 3214, 3251, 3700, 3800 and 3900 series references are to the CIRO Investment Dealer and Partially Consolidated (IDPC) Rules (August 11, 2026 consolidation). Verify amendments at ciro.ca.