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Becoming a Regulated Marketplace



A new marketplace application with IIROC is comprised of the following:


Dealer Member application for Alternative Trading Systems (ATS)

If you chose to conduct your new marketplace as an alternative trading system (ATS) and a new corporation, you will require IIROC approval as an IIROC Dealer Member. The application process usually takes approximately six months. The application will require IIROC Board approval. IIROC requires a minimum $25,000 new membership fee, plus a payment towards the IIROC Restricted Fund of 0.5% of your initial capital. IIROC staff will track its time spent on the new Dealer Member process. If the time cost spent is greater than $25,000, IIROC will bill you for the remainder. All new Dealer Member fees, including your first year’s Dealer Member Annual Fee, must be received by IIROC prior to the effective date of membership.

 

Regulation Services Agreement

IIROC will require you to enter into an IIROC regulation services agreement (“RSA”), setting out our respective rights and obligations. The negotiation of the RSA will run concurrently with the new Dealer Member application process. RSAs require IIROC Board approval. IIROC requires a minimum $25,000 fee for the RSA. IIROC staff will track its time spent on the RSA drafting and negotiations. If the time cost spent is greater than $25,000, IIROC will bill you for the remainder upon launch of the marketplace.

 

Information Technology connectivity and testing

IIROC will require your marketplace to connect to and test with the IIROC surveillance systems. This process generally takes a minimum of 65 work days of effort. The minimum fee, including third-party costs incurred by IIROC, is $66,500. IIROC staff will track its time spent on the connectivity and testing process. If the time cost spent is greater than $66,500, IIROC will bill you for the remainder upon launch of the marketplace. IIROC’s availability for testing is often dependent upon third parties. Testing windows may not be available until 90-180 days after a request for testing is made.

 

Information Technology development

IIROC will require you to provide a written description of your proposed marketplace model in sufficient detail for IIROC to perform a meaningful review. If your marketplace model contains unique features, new functionality for STEP may be required. All costs of the IT development, including any third-party costs, are borne by the marketplace. IIROC may require a deposit before any such development work begins. IIROC may bill you for the remainder upon completion of the specific work or upon launch of the marketplace. All new functionality must be tested with the IIROC surveillance systems. IIROC’s availability for development and testing is often dependent upon third parties. Development/testing windows may not be available until 90-180 days after a request for development/ testing is made.

All cost amounts are subject to applicable taxes. All timing estimates are based on our past experience. The specific and unique features of your marketplace may require additional time.

 


 

The following outlines more specifically the steps IIROC must follow when we review your new marketplace application.

 

  1. Initial Steps

  2. Applicant submissions

  3. IIROC review and RSA

  4. Applicant response

  5. IT build

  6. OSC confirmation

  7. Approval by IIROC Board

  8. IT testing

  9. OSC Sign off

  10. IIROC Sign off

  11. Launch

  12. Post-launch matters

 

Phase 1 - Initial Steps

  • Initial meeting between applicant and IIROC.
  • IIROC delivers letter describing application costs/timeline, requesting a non-refundable $45,000 plus taxes deposit ($10,000 new member fee deposit plus $10,000 IT fee deposit, plus $25,000 RSA fee) and detailed written description of marketplace model

 


 

Phase 2 - Applicant submissions

  • IIROC receives $45,000, plus taxes, deposit from applicant
  • IIROC receives from applicant a written description of marketplace model in sufficient detail for IIROC to perform a meaningful Marketplace and Dealer Member review (and/or copies of draft Form F1/F2 and final technology specifications for accessing marketplace, both as required by the OSC and the National Instrument)
  • IIROC IT provides applicant with IT build documentation

 


 

Phase 3 - IIROC review and RSA

  • Applicant provides (if has not done so before) copy of draft Form F1/F2 and final technology specifications for accessing marketplace, both as required by the OSC and National Instrument
  • IIROC provides first draft of RSA
  • IIROC meets with applicant to review marketplace model and Dealer Member application and to identify whether marketplace model requires new functionality for STEP(surveillance tool)
  • IIROC liaises with OSC, if requested by OSC and/or applicant
  • IIROC provides written comments to applicant on marketplace model and Dealer Member application, including estimated marketplace specific cost and timeline for new STEP functionality, if any
  • IIROC IT requests SMARTS to add a new marketplace to STEP
  • IIROC IT provides applicant with STEP testing window availability

 


 

Phase 4 - Applicant response

  • Applicant provides written response to IIROC marketplace model and Dealer Member application comments, if necessary
  • Applicant provides written comments on draft RSA
  • IIROC receives written authorization from applicant to proceed with build for new STEP functionality, if necessary, based on costs/time estimates received from IIROC

 


 

Phase 5 - IT build

  • IIROC receives from applicant written confirmation that OSC is in final review of F1/F2
  • IIROC receives from applicant remaining non-refundable $56,500 IT fee, plus taxes plus additional funds for development of new STEP functionality, if required
  • IIROC schedules testing with STEP
  • If required, development of new STEP functionality commences

 


 

Phase 6 - OSC confirmation

  • Applicant provides IIROC with written confirmation of OSC publication of Form F1/F2 for comment
  • Applicant provides IIROC with comment letters responding to OSC publication of Form F1/F2 for comment

 


 

Phase 7 - Approval by IIROC Board

  • IIROC Board approves applicant (draft RSA approved and if required, Dealer Member application approved).
  • Prior to effective date of new Dealer Membership, IIROC collects from Applicant remaining $15,000 Dealer Member new application fee plus IIROC Restricted Fund Fee and Dealer Member Annual Fee, plus taxes

 


 

Phase 8 - IT testing

  • STEP testing completed

 


 

Phase 9 - OSC Sign off

  • Applicant provides IIROC with written confirmation of OSC notice of completion of review of Form F1/F2

 


 

Phase 10 - IIROC Sign off

  • Applicant and IIROC agree on proposed launch date
  • IIROC issues Market Policy notice and new Dealer Member Notice, if required
  • IIROC and applicant sign RSA

 


 

Phase 11 - Launch

  • Applicant and IIROC coordinate launch

 


 

Phase 12 - Post-launch matters

  • Final billing by IIROC to applicant for any IT and RSA fees accrued by IIROC over deposit amounts, plus taxes
  • IIROC receives final payment from marketplace within 90 days of launch


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