CanadaCIRO Rule 3800, records and client reporting
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
- Governance, Retention, Disclosure
- Audit expectation
- on_request
- Who audits it
- Self, Regulator
- Where the report goes
- Kept
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: retain copies of all records required under Corporation requirements, in durable and accessible form, for a minimum of seven years from the date the record is created, unless Corporation requirements or securities laws relating to the specific type of record require a different retention period (Rule 3803(1)).
- Maintain current records that properly record your business activities, financial position, financial operating results and client transactions and that demonstrate your compliance with securities laws and Corporation requirements, including records that provide an audit trail for client instructions, orders and transactions and for each trade transmitted or transaction executed for a client or on your own behalf, that demonstrate compliance with the know-your-client, account appropriateness, product due diligence, know-your-product and suitability determination requirements and with the complaint handling requirements, and that document correspondence with clients (Rule 3804(1) and (2)).
- Maintain appropriate internal controls to provide reasonable assurance that your records are correct, provide clear and accurate information, and remain current (Rule 3804(3)).
- Make your records available to CIRO on request, in the manner requested (Rule 3804(4)).
- Send each client a quarterly statement if at the end of the quarter the account has a debit or credit balance or holds one or more securities, derivatives or precious metals bullion, and a monthly statement to each client who requests one or who had a transaction during the month, among the other triggers in the rule (Rule 3808(2) and (3)).
- Send each retail client who meets the conditions in the rules an annual performance report and, where the client paid a reportable fee, charge or other payment, an annual fee and charge report, and send all confirmations, statements, reports and other documents required under sections 3803 through 3819 promptly (Rules 3810(1), 3811(1) and 3845(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 retain copies of all records required under Corporation requirements, in durable and accessible form, for a minimum of seven years from the date the record is created unless Corporation requirements or securities laws relating to the specific type of record require a different retention period.
A Dealer Member must maintain current records that properly record its business activities, financial position, financial operating results and client transactions, and that demonstrate its compliance with securities laws and Corporation requirements. Those records include records that provide an audit trail for client instructions, orders and transactions and for each trade transmitted or transaction executed for a client or by the Dealer Member on its own behalf.
They also include records that demonstrate compliance with the know-your-client, account appropriateness, product due diligence, know-your-product and suitability determination requirements and with the complaint handling requirements, and records that document correspondence with clients. A Dealer Member must maintain appropriate internal controls to provide reasonable assurance that its records are correct, provide clear and accurate information, and remain current.
A Dealer Member must make its records available to CIRO on request, in the manner requested by CIRO. A Dealer Member must send a quarterly statement to each client who, at the end of the quarter, has a debit or credit balance or one or more securities, derivatives or precious metals bullion in their account. A Dealer Member must send a monthly statement to each client who requests one or who had a transaction during the month, among other triggers stated in the rule.
A Dealer Member must send an annual performance report to each retail client who meets the conditions in the rule. A Dealer Member must send an annual fee and charge report to each retail client who paid a reportable fee, charge or other payment during the period covered by the report. All confirmations, statements, reports and other documents required to be sent to clients under sections 3803 through 3819 must be sent promptly.
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.