Effective Date: December 31, 2021
IIROC Rules outline our proficiency requirements. Under certain circumstances, IIROC may grant a discretionary exemption1 from these requirements.
This Guidance Note explains the following:
- general proficiency exemption considerations,
- information needed to process a proficiency exemption request,
- comparative analysis,
- special circumstances when a comparative analysis may not be required,
- deficient applications,
- acceptable experience versus exemption requests,
- length of time it typically takes to review an exemption request, and
- other factors that may be considered.
- 1Information on exemption applications from IIROC Rules that do not involve proficiency requirements are discussed in GN-1300-21-001 – Exemption applications relating to IIROC Rules.
Proficiency exemption requests
General proficiency exemption considerations
An exemption from a proficiency requirement excuses an individual from completing a mandatory licensing course or fulfilling an experience requirement.
IIROC is of the view that high proficiency standards play a key role in investor protection and the integrity and efficiency of capital markets. We are committed to high standards of proficiency, professionalism and ethics.
If an individual applies for an exemption from an education component of the proficiency requirements, with the exception of circumstances discussed in section 1.4, the individual must demonstrate that he or she has gained the competencies and knowledge covered in the proficiency course from other courses and/or experience.
If an individual applies for an exemption from an experience component of the proficiency requirements, the individual must demonstrate that the alternative experience is at least equivalent to and for a greater length of time than, the experience required under IIROC Rules.
Generally, experience may compensate for a lack of education but education may not offset a lack of experience.
Information needed to process a proficiency exemption request
An individual may apply to IIROC for a discretionary exemption by filing an “Apply for Exemption” submission and paying the relevant fee through the National Registration Database (NRD).
The application needs to include information and details of the following, in order for IIROC to review the request and determine whether they can support the exemption:
- the individual’s relevant experience including specific role(s), employer name, responsibilities, and length of time in the particular role,
- the individual’s relevant courses completed including course name, provider name, date completed, and relevant content covered,
- a comparative analysis of the individual’s relevant experience and education, as discussed in section 1.3, and
- any other documents that the individual or the Dealer Member (Dealer) believes would be helpful to assist with the review and the decision making (example: reference letters that explain the individual’s experience).
The information provided in the submission should clearly demonstrate how:
- the individual’s experience is an acceptable alternative to the required education or experience, and/or
- the individual’s education is an acceptable alternative to the required education, or
- the individual has updated and refreshed his or her knowledge through experience or another course, if the request is for an exemption from rewriting2 a course.
Once IIROC reviews the information submitted, we may also request additional supporting documents such as the following:
- letters from the individual’s former manager(s) to confirm experience,
- official courses transcripts or completion certificates, and
- reasons why the Dealer is in support of the exemption and confirmation that the Dealer has verified the accuracy of the information in the submission.
Dealers should keep in mind that if a course has gone through significant change since the individual wrote it initially, it might be more appropriate to rewrite the course. Furthermore, in many cases, the Dealer and individual may find it beneficial, in terms of timing, to have the individual write or rewrite a required course.
Once the Dealer has provided all required information and Staff have completed their review, Staff would forward the request, their recommendation, and relevant supporting documents to the decision maker for a decision.3
Generally, exemption requests from writing or rewriting a course should include a comparative analysis of the individual’s education and experience against the course requested for an exemption.
The decision maker cannot approve an application where the Dealer simply provides a list of courses the individual has taken, a resume, or standard job description without providing analysis as to how the individual’s courses or experiences specifically relate to the topics covered in the required course. It is important to provide a detailed comparative analysis including:
- the individual’s experience in comparison to the specific content covered in the course that is the subject of the exemption request (the required course), and
- any relevant courses taken, including an explanation of their specific content in comparison to the content in the required course.
The comparative discussion and analysis against the topics covered in the required course could be in the form of:
- point form, or
- a chart.
Special circumstances when a comparative analysis may not be required
There are special situations when a comparative analysis may not be required. An individual who has extensive experience in the securities industry with another Canadian or equivalent foreign dealer in a comparable role, to what the individual is applying for, would not need to provide a comparative analysis. Other circumstances may be a result of changes in policy or upcoming rules. Below is an example of when a comparative analysis is not required.
Extensive experience as a Chief Compliance Officer:
Chief Compliance Officers are required to complete the Chief Compliance Officers Qualifying Examination (CCO) course and the Partners, Directors and Senior Officers (PDO) course. An individual with extensive experience as a Chief Compliance Officer in the securities industry with another Canadian or equivalent foreign dealer, who applies for an exemption from the CCO course, would not need to provide a comparative analysis. The individual and Dealer should include details of the individual’s experience, duties, and responsibilities in the previous CCO role(s) and provide information on any relevant training, courses, seminars, and industry events that the individual completed/attended in the past few years.
IIROC reviews each exemption application on a case-by-case basis, taking into consideration the information provided in the submission. An exemption application is deficient if additional information is still required from the Dealer or individual. IIROC Staff will contact the Dealer’s Authorized Firm Representative (AFR) with a request for any missing information.
It is the responsibility of the AFR to obtain this information from the Dealer and/or individual in a timely manner.
In order to avoid stale dated information, requests for any missing information will include a due date, typically four weeks. IIROC expects responses from the Dealer by this due date and absent reasonable grounds, IIROC will abandon any reviews that are still deficient or outstanding past this date. After this time, the individual or Dealer will be required to file a new submission on NRD and pay the requisite fee to pursue the exemption.
Acceptable experience vs. exemption requests
Some of the proficiency requirements provide an alternative to satisfying the experience requirements. For example, the experience requirement for Supervisors of Approved Persons dealing with retail clients are as follows:
Two years of relevant experience working for a Dealer Member or such equivalent experience as may be acceptable to the District Council.
If the Dealer would like IIROC to consider the alternative experience as equivalent, then the Dealer needs to provide information and analysis on why or how the experience is equivalent as part of the application for registration submission. In these cases, a separate exemption application is not required. Staff would forward the request from the registration submission to the decision maker, with Staff’s recommendation, to decide on whether the experience is acceptable.
However, if in the above example, the individual wishes to be exempt from the two years of relevant experience generally, then an exemption request is required and the Dealer should follow the normal process of applying for a discretionary exemption.
Other factors to consider when filing a proficiency exemption
Timeframe for IIROC registration reviews
IIROC Staff endeavour to complete the review of an exemption application on a timely basis. As each application is unique to the individual’s fact situation, the review time may vary with each application and may take more time in the event of the following:
- multiple exemptions are requested for the same individual,
- incomplete information or insufficient detail for Staff to make a recommendation to the applicable decision maker, and
- insufficient analysis to demonstrate that the information provided is an acceptable alternative to the required proficiency.
Date the course expired
A course that has expired recently versus one that has expired over 10 years ago is still an expired course under IIROC Rules. IIROC Registration Staff do not have the discretion to waive or reduce the filing requirements for recently expired courses.
CSI Discount for Qualifying Individuals
IIROC has arranged a 50% enrolment price discount for eligible individuals rewriting courses within 10 years of previously writing a required course through the Canadian Securities Institute. For more information, please visit CSI’s applicable course enrolment page.
IIROC Rules this Guidance Note relates to:
- Rule 2600,
- subsection 9203(1), and
- section 9206.
Previous guidance note
This Guidance Note replaces Notice 18-0236 – IIROC Registration – Proficiency Exemption Requests.
This Guidance Note was published under Notice 21-0190 - IIROC Rules, Form 1 and Guidance.
- 2Rewrites are for courses that an individual have previously completed but the time validity of the courses have expired for purposes of IIROC approval. Courses are only valid for three years from the date of successful completion, or three years from when the course was last required in a registered capacity with IIROC, whichever is later.
- 3Pursuant to section 9206 and subsection 9203(1) of the IIROC Rules, the District Council or its delegate (if delegated), has the authority to make a decision on a request for an exemption from the applicable proficiency requirements.