PART A.2 - HOLDING COMPANIES, RELATED COMPANIES AND ORDER EXECUTION ONLY SERVICE PROVIDERS

2206. Related companies

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    1. A Dealer Member, or an employee, Approved Person, or investor of a Dealer Member, must obtain approval from the applicable District Council before it sets up, or acquires any interest in, a related company or associate.
    2. A Dealer Member must obtain approval from the applicable District Council before creating a wholly owned subsidiary whose principal business is a securities broker, dealer or adviser.
    3. A Dealer Member must be responsible for and guarantee its related companies’ obligations to clients, and each of its related companies must be responsible for and guarantee the Dealer Member’s obligations to its clients, as follows
      1. a Dealer Member that holds an interest in a related company must guarantee an amount equal to 100% of the Dealer Member’s financial statement capital,
      2. a Dealer Member that holds an interest in a related company must have the related company guarantee an amount equal to the Dealer Member’s percentage ownership multiplied by the related company’s financial statement capital, and
      3. where two related companies are related because the same person has an ownership interest of at least 20% in each of them, the related companies must guarantee each other for an amount equal to that person’s ownership percentage multiplied by the company’s financial statement capital.
    4. A Dealer Member, and each of the Dealer Member’s related companies that are required to guarantee an amount under subsection 2206(3), must sign the current IIROC guarantee form. 
    5. The Board may exempt a Dealer Member from subsection 2206(3), or may decide that a guarantee for a greater amount is required.
    6. A District Council may delegate its authority under this section to a subcommittee of the District Council or to IIROC staff.

    There is no history log for this rule.

    There is no history log for this rule.