- Before engaging any agents to conduct securities related business, a Dealer Member must enter into a written agreement with IIROC.
- The written agreement must contain terms describing the Dealer Member’s responsibility:
- for the agent’s conduct, including the agent’s compliance with IIROC requirements and securities laws, and
- to clients for the agent’s acts and omissions relating to the Dealer Member’s business
- IIROC must be satisfied with the form of the written agreement.
- The written agreement must be in a form similar to the following:
“Agreement between a Dealer Member and IIROC
- As a Dealer Member of the Investment Industry Regulatory Organization of Canada (IIROC), the Dealer Member agrees it is subject to IIROC requirements.
- Section 2303 of the IIROC Rules “Written agreement between the Dealer Member and IIROC” requires the Dealer Member to make this agreement with IIROC.
- This agreement is in addition to and does not alter IIROC requirements or any other agreement between the Dealer Member and IIROC.
- Agreement with the Agent
- The Dealer Member must enter into a written agreement with each of its agents as required by section 2304 of the IIROC Rules “Written agreement between the Dealer Member and its agents” and any successor rules relating to principal and agent relationships.
- The agreement must require that the agent complies with all applicable laws and IIROC requirements.
- Supervision of the Agent
The Dealer Member must treat each of its agents as employees with respect to:
- administration of IIROC requirements,
- supervision of the agent under IIROC requirements, and
- ensuring its agents comply with all applicable laws and IIROC requirements.
- Written Disclosure of Respective Responsibilities to Clients
The Dealer Member or the agent must disclose to clients at the time of opening an account:
- the list of securities related business activities conducted by the agent for which the Dealer Member is responsible, and
- that the Dealer Member is not responsible for any other business activity conducted by the agent.
- Disclosure to Clients
The disclosure to clients must be made using the following language in the New Account Application:
- “If your investment advisor is an agent of [the Dealer Member name], [Dealer Member name] is irrevocably liable to you for any acts and omissions of your investment advisor with regard to [Dealer Member name] business as if the investment advisor were an employee of [Dealer Member name]. By continuing to deal with our firm, you accept our offer of indemnity.”
- Disclosure by Agent
If the disclosure is made by the agent, the Dealer Member must ensure that the agent has made the disclosure directly to the clients.
- Regulatory Authority of IIROC
The Dealer Member acknowledges that IIROC has the authority to regulate and enforce the provisions set out in the Dealer Member and agent agreement.
- Governing Laws
This agreement is governed by the laws of [applicable province] and the laws of Canada.
- Continuing Benefit
The agreement is for the benefit of and binding upon the parties and their successors and assigns. The Dealer Member may not assign the agreement without IIROC’s prior written consent.
DATED as of the __________day of _____________, ______
[NAME AND TITLE OF SIGNING INDIVIDUAL]