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Supporting Documents and Frequently Asked Questions about Becoming a Dealer Member



Supporting Documents

 

Form 1
Statement of the financial position of the applicant. To be submitted unless the applicant is already a member of a Canadian self-regulatory organization.

 

Subordinated Loan Agreement
To be submitted when applicant’s minimum capital includes subordinated debt.

 


 

FAQ

 

  1. Who can be an IIROC Dealer Member?

  2. Can a company outside Canada become a Dealer Member?

  3. Are there any restrictions on the ownership of an IIROC Dealer Member firm?

  4. What do I do to become a Dealer Member?

  5. How much does it cost to join IIROC?

  6. How long does the approval process take?

  7. Are there different classes of Dealer Membership in IIROC?

  8. I'm already registered with the Ontario Securities Commission. How do I transfer my membership to IIROC?

  9. What are the insurance requirements for membership?

  10. What is the approval process when an IIROC Dealer Member or its parent holding company acquires or creates an affiliate/associate?

 


 

1. Who can be an IIROC Dealer Member?

 

Membership is open to Canadian entities that are registered to carry on business as dealers or advisors in any province or jurisdiction in Canada.

 

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2. Can a company outside Canada become a Dealer Member?

 

An IIROC Dealer Member must be an entity that is formed under Canadian federal, provincial or territorial law. A firm outside Canada would need to incorporate a Canadian entity that would apply for IIROC membership. The Canadian applicant would have to satisfy all requirements for membership.

 

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3. Are there any restrictions on the ownership of an IIROC Dealer Member firm?

 

No, although owners of 10% or more of the voting participating or equity shares of an IIROC Dealer Member must also be approved by IIROC.

 

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4. What do I do to become a Dealer Member?

 

All applicable documents and a deposit of $10,000 should be submitted to Membership Coordinator & GCO Specialist to begin the membership process.

 

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5. How much does it cost to join IIROC?

 

Dealer Members of IIROC pay a one-time Entrance Fee of $25,000 ($10,000 of this is a non-refundable deposit required at the time the application is made), a one-time contribution to IIROC's Restricted Fund and ongoing Annual Fees based on the Dealer Member's capital and revenues. The Restricted Fund is a fund administered by IIROC under IIROC's recognition orders and to which all Members are required to make a one-time contribution. Fines and settlements collected by IIROC are also contributed to the Restricted Fund.

 

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6. How long does the approval process take?

 

All applications for membership in IIROC undergo an extensive review with respect to financial & operations compliance, business conduct compliance and registration requirements. Applicants will not be admitted to membership until these requirements have been met. Generally, applications take a minimum of six months.

 

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7. Are there different classes of Dealer Membership in IIROC?

 

There are no classes of Dealer Membership in IIROC. All Dealer Members are required to meet and maintain the same requirements. Applicants can, however, enter into a contractual arrangement whereby another Dealer Member of IIROC will provide back office, settlement and clearing services. This arrangement is known as an Introducing/Carrying Broker Agreement and certain membership requirements, such as minimum capital and insurance, are dependent on the type of arrangements Dealer Members establish.

 

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8. I'm already registered with the Ontario Securities Commission. How do I transfer my membership to IIROC?

 

It is not possible to transfer your registration. A separate application to IIROC, satisfying all requirements, must be made.

 

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9. What are the insurance requirements for membership?

 

The only insurance necessary for membership is the Financial Institution Bond and Mail Insurance. The Financial Institution Bond is obtained from an insurance carrier. Its purpose is to protect the member from losses related to business activities. All Members are required to carry this insurance coverage.

 

A separate membership requirement that is sometimes confused with insurance relates to the Canadian Investor Protection Fund. The Canadian Investor Protection Fund is a fund supported by members of all the Canadian self-regulatory organizations. Its purpose is to protect clients of Members against losses resulting from the insolvency of a member. A company automatically becomes a participant in the Canadian Investor Protection Fund on admission to membership in IIROC and is assessed on a quarterly basis for contributions to the Fund.

 

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10. What is the approval process when an IIROC Dealer Member or its parent holding company acquires or creates an affiliate/associate?

 

The IIROC Dealer Member Rules, specifically Rule 6.3 and 6.7, address the approval or notification requirements when an IIROC Member or its parent holding company, directly or indirectly, acquires/creates another entity for the purpose of transacting securities-related business, or otherwise, in certain instances, District Council approval is required.

 

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