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Frequently Asked Questions



During the implementation period for the Amendments Respecting Client Identifiers (Amendments), IIROC staff will publish responses to “Frequently Asked Questions” concerning the implementation of the Amendments. The FAQs represent the views of IIROC staff and are intended to assist IIROC Dealer Members with the implementation of the Amendments. However, please note that the FAQs do not constitute rules or requirements and have not been approved by the IIROC Board or the Canadian Securities Administrators.

FAQ Topics:

Debt Securities:

Listed Securities:

Listed and Debt Securities:

 

Debt Securities: General

  1. For reportable debt transactions, are dealers required to report allocations that occur after the transaction reporting deadline? (added on 09/06/2019)

    Dealers should report trade allocations if the information is available at the time of reporting. Allocations made prior to the transaction reporting deadline would include client LEIs as required.

    Allocations made after the time of reporting do not need to be provided to IIROC. IIROC continues to have the ability to request this information at a later date and dealers should continue to maintain records of the allocations for audit trail purposes.

 

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Listed Securities: General

  1. Who is responsible for including client identifiers on an order? (added on 09/06/2019)

    The Amendments apply to all IIROC Dealer Members, which include executing Participants, as well as non-executing IIROC Dealer Members that are not Participants.

    A list of all IIROC Dealer Members can be found here.

  2. What should be reported on an order that is sent to a marketplace? (added on 09/06/2019)

    To help IIROC Dealer Members understand what needs to be on an order, staff created three documents:

     

    The first two documents provide different ways of visualizing the same requirements. For example, each outcome from the Decision Tree has a number, and that number corresponds with the same scenario in the Scenario Chart.

    The outcomes from the Decision Tree are also color-coded to match the same colors in the Scenario Chart (under Column A).

  3. Where an account number is required under the rule, can a dealer can create and use a different unique identifier for a client? (added on 09/06/2019)

    No, if the rules require an account number as the client identifier, the IIROC Dealer Member must include an account number on the order.

  4. Which clients need to be identified under the Amendments? Is the IIROC Dealer Member expected to determine the ultimate end-client for an order? (added on 09/06/2019)

    No, the Amendments only affect the direct client of an IIROC Dealer Member, regardless of whether the reported entity is the ultimate end-client for the order.

    An IIROC Dealer Member may choose to send its order to another IIROC Dealer Member that is a Participant for execution on a marketplace. In that instance, the non-executing IIROC Dealer Member is still expected to comply with the requirements and include the identifier of its direct client when sending the order to the executing Participant.

 

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Listed Securities: Order execution only

  1. If the dealer supervises all of its order-execution only clients on a retail platform, can the dealer use an account number as the client identifier? (added on 09/06/2019)

    Not necessarily. If any of the OEO clients are “identified OEO clients”, which is a defined term under the rules, then an LEI must be used as the client identifier.

    Identified OEO clients:

    • are active OEO clients that have more than an average of 500 orders a day, or
    • are registered as an adviser, or
    • act in a manner analogous to an adviser in a foreign jurisdiction.

 

OEO client is: What to include on the order
“identified OEO client” LEI if eligible to obtain one, otherwise an account number (and IIROC Dealer Member separately reports client name to IIROC)
Not an “identified OEO client” and supervised as a retail client Account number
Not an “identified OEO client” and supervised as an institutional client LEI

 

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Listed Securities: Bulk transactions

  1. What client identifier should a dealer use if it groups together orders for more than one client to send to a marketplace (added on 09/06/2019)

 

Order contains What to include on the order: Client Identifier What to include on the order: BU or MC Designation
Client order(s) combined with principal order(s) and/or non-client order(s) None Bundled order (BU) marker
More than one client order from clients that have a common parent entity (no principal or non-client order) LEI of parent entity None
More than one client order from clients that do not have a common parent entity (no principal or non-client order) None Multiple Client (MC) marker

 

In all cases for a bulk order – the IIROC Dealer Member is not required to report allocations after the execution of the trade.

 

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Listed Securities: Managed accounts

 

  1. If a portfolio manager makes investment decisions for multiple managed accounts, how should the IIROC Dealer Member report the client identifiers? (added on 09/06/2019)

    The Amendments focus on who holds the account, rather than who makes the investment decisions for the account.

IIROC Dealer Member’s client is: Which client identifier to include on the order
Portfolio Manager (PM) Accesses the marketplace as a DEA, RA or Identified OEO client LEI if eligible to obtain one, otherwise an account number (IIROC Dealer Member separately reports PM’s name to IIROC)
Supervised as an institutional client by the IIROC Dealer Member LEI
Supervised as a retail client by the IIROC Dealer Member Account number
Managed Account(i.e. PM works at the IIROC Dealer Member) Accesses the marketplace as a DEA, RA or Identified OEO client LEI if eligible to obtain one, otherwise an account number (IIROC Dealer Member separately reports holder of managed account to IIROC)
Supervised as an institutional client by the IIROC Dealer Member LEI
Supervised as a retail client by the IIROC Dealer Member Account number

 

IIROC Dealer Member groups together an order from a PM or a Managed Account with another order
The other order(s) is/are: What to include on the order:
Principal and/or Non-Client order(s) Bundled order (BU) marker
From another client(s) that shares the same parent entity LEI of parent entity
From another client(s) that do not share the same parent entity Multiple client order (MC) marker

 

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Listed and Debt Securities: General

  1. How should the dealer proceed if there are legal barriers preventing the reporting of client LEIs in the client’s jurisdiction? (added on 09/06/2019)

    The dealer would need to apply for an exemption from the requirement to provide an LEI for its client. Exemption applications should include the following information:

    • Account documentation for the client, which includes at a minimum:
      • Name of client
      • Account number of client
      • Location of client.
    • Evidence of reasonable efforts by the dealer to obtain the client LEI, which may include:
      • Dealer’s policies and procedures regarding its process on client outreach, and
      • Correspondence between the dealer and the client.
    • Explanation of the legal barrier preventing the dealer from providing the client LEI, which may be in the form of a legal opinion.

     

    Please contact your Business Conduct Compliance Manager if you are interested in seeking an exemption.

 

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