CanadaCIRO Rule 3600, communications with the public
CIRO IDPC Rule 3600, ss. 3601, 3602 and 3640
In force since .
An AI sector rules rule binding private bodies.
- Enforcement body
- Canadian Investment Regulatory Organization (CIRO)
- Instrument type
- a regulation made under an act
- Obligation class
- Prohibition, Governance
- Audit expectation
- continuous
- Who audits it
- Self
- Where the report goes
- Kept, Produced on request
As of .
What it requires
- It reaches you if you are a Dealer Member of the Canadian Investment Regulatory Organization (CIRO), which Canada's provincial and territorial securities regulators recognize as a self-regulatory organization, or an Approved Person of one, because a hearing panel that finds a Dealer Member or an Approved Person has contravened a CIRO requirement may impose sanctions on it (Rules 8209 and 8210), and the Rules exclude a Mutual Fund Dealer Member from the term Dealer Member: do not issue, participate in or knowingly allow the use of your name in any advertisement, sales literature or correspondence, terms that reach any written or electronic communication for client use or prepared for distribution to a single current or prospective client, that contains an untrue statement or omission of a material fact or is otherwise false or misleading, contains an unjustified promise of specific results, uses unrepresentative statistics to suggest unwarranted or exaggerated conclusions or fails to identify the material assumptions made, contains any opinion or forecast of future events that is not clearly labeled as such, fails to fairly present the potential risks to the client, is detrimental to the interests of the public, CIRO or its Dealer Members, or fails to comply with Corporation requirements or any applicable laws (Rule 3602(1)).
- Have policies and procedures that specifically address communication with the public and the review and supervision of advertisements, sales literature and correspondence relating to your business, and monitor compliance with them (Rules 3601(1) and 3602(2)).
- Have a designated Supervisor approve before use or publication research reports, market letters, telemarketing scripts, promotional seminar texts (excluding educational seminar texts), original advertisements or original template advertisements, and any material containing performance reports or summaries used to solicit clients (Rule 3602(3)).
- Review all other advertising, sales literature or correspondence through pre-use approval, post-use review or post-use sampling (Rule 3602(4)).
- Retain copies of all advertisements, sales literature and correspondence and all records of supervision for the period set out in section 3803, readily available for inspection by CIRO (Rule 3602(6)).
- Do not hold yourself or your Approved Persons out, including through a trade name, in a manner that could reasonably be expected to deceive or mislead any person or company as to the proficiency, experience, qualifications or category of registration or approval of the Approved Person, the nature of the person's relationship with you or the Approved Person, or the products or services provided or to be provided (Rule 3640(1)).
If you get it wrong
Penalty structure
CIRO states that a Dealer Member found to have violated CIRO rules may be fined up to a maximum of $5 million per contravention or an amount equal to three times the profit made, or loss avoided.
- Rule
- Per violation only
- As of
- Currency
- CAD
- Per violation unit
- Violation
- Per violation amount
- 5,000,000
What this law does
A Dealer Member must not issue, participate in or knowingly allow the use of its name in any advertisement, sales literature or correspondence that contains an untrue statement or omission of a material fact or is otherwise false or misleading, contains an unjustified promise of specific results, fails to fairly present the potential risks to the client, or fails to comply with Corporation requirements or any applicable laws.
Correspondence means any advertisement or business related communication, including any written or electronic communication, prepared for distribution to a single current or prospective client. Sales literature means any written or electronic communication for client use which contains a recommendation relating to a security or derivative, or trading strategy.
An advertisement includes any commercials, commentaries and any published materials promoting a Dealer Member's business, including materials disseminated or made available electronically. A Dealer Member's policies and procedures must specifically address communication with the public, and the Dealer Member must monitor compliance with them.
A Dealer Member's policies and procedures must specifically address the review and supervision of advertisements, sales literature and correspondence relating to its business.
A Dealer Member must ensure that research reports, market letters, telemarketing scripts, promotional seminar texts, original advertisements or original template advertisements, and any material containing performance reports or summaries used to solicit clients are approved by a designated Supervisor before use or publication. All other advertising, sales literature or correspondence must be reviewed through pre-use approval, post-use review or post-use sampling.
A Dealer Member must retain copies of all advertisements, sales literature and correspondence and all records of supervision for the period set out in section 3803, and these items must be readily available for inspection by CIRO.
A Dealer Member must not hold itself or its Approved Persons out, including through the use of a trade name, in a manner that could reasonably be expected to deceive or mislead any person or company as to the proficiency, experience, qualifications or category of registration or approval of the Approved Person, the nature of the person's relationship with the Dealer Member or the Approved Person, or the products or services provided or to be provided.
A Dealer Member must comply with all relevant Corporation requirements, securities laws and applicable laws that are applicable to its activities, under section 1406 of the Investment Dealer and Partially Consolidated Rules. Under the Investment Dealer and Partially Consolidated Rules the term Dealer Member has the meaning given in the CIRO General By-law and excludes a Mutual Fund Dealer Member.
CIRO states that a Dealer Member found to have violated CIRO rules may be fined up to a maximum of $5 million per contravention or an amount equal to three times the profit made, or loss avoided. The Investment Dealer and Partially Consolidated Rules replaced the IIROC Rules and became effective on .
When LexLint raises it
When your app profile says your app provides financial services or generates content with AI.