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Residual Risk Rating



Trading Conduct Residual Risk is an assessment of a firm’s overall risk profile after considering the firm’s methods of assessing and monitoring its trading risks.

A dealer member's residual risk is assessed as Low, Moderate-Low, Moderate-High or High in comparison with other IIROC Dealer Member firms that are also marketplace participants.

Low Risk

By placing a firm in this risk category, IIROC has assessed the likelihood or probability of the firm failing to maintain market integrity and/or not comply with the Universal Market Integrity Rules (UMIR) as highly unlikely. The firm has demonstrated significant success in offsetting its business model’s risks with effective corporate governance and appropriate management practices.

Moderate-Low Risk

By placing a firm in this risk category, IIROC has assessed the likelihood or probability of the firm failing to maintain market integrity and/or not comply with the Universal Market Integrity Rules (UMIR) as unlikely. On balance, the firm has demonstrated reasonable success in offsetting its business model’s risks with its corporate governance and management practices.

Moderate-High Risk 

By placing a firm in this risk category, IIROC has assessed the likelihood of the firm failing to maintain market integrity and/or not comply with the Universal Market Integrity Rules (UMIR) as a reasonable possibility. While, on balance, the firm has demonstrated success in offsetting its business model’s risks with its corporate governance and management practices, the potential for its risk levels to increase and/or its controls to falter makes the firm worth watching.

High Risk

By placing a firm in this risk category, the IIROC has assessed the likelihood or probability of the firm failing to maintain market integrity and/or not comply with the Universal Market Integrity Rules (UMIR) as much higher than average.

The firm has not demonstrated consistent success in offsetting its business model’s risks with its corporate governance and management practices; therefore the potential for its risk levels to overtake its controls is sufficiently significant to warrant priority regulatory focus by IIROC.

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