The Dealer Member and the agent who conducts securities related business must enter into a written agreement.
The written agreement must not contain any terms inconsistent with IIROC requirements or securities laws.
IIROC must be satisfied with the form of the written agreement before the Dealer Member finalizes the agreement with the agent.
The Dealer Member must certify to IIROC that the written agreement complies with Rule 2300 and any other applicable IIROC requirements.
IIROC may request that the Dealer Member obtain a legal opinion confirming subsection 2304(4).
IIROC must be satisfied that the written agreement complies with applicable laws relating to tax matters.
The written agreement must contain the following minimum terms:
Compliance with the applicable laws
The agent and the Dealer Member confirm that this agreement does not violate applicable laws.
Confirmation of supremacy of IIROC requirements
The agent and the Dealer Member confirm that:
this agreement is made in compliance with IIROC requirements,
if there is an inconsistency between this agreement and any applicable IIROC requirements, the IIROC requirements will prevail,
any inconsistent terms will be deemed severed and deleted,
IIROC has the authority to regulate and enforce the provisions set out in this agreement, and
this agreement will be interpreted and enforced to give full effect to any applicable IIROC requirements.
- Compliance by the agent with applicable laws, securities laws, and IIROC requirements
- The agent warrants to the Dealer Member that it is appropriately registered or licensed, in good standing and in compliance with all applicable laws, securities laws and IIROC requirements.
- The agent covenants to comply with all applicable laws, securities laws and IIROC requirements.
- The agent agrees to be bound by and comply with the warranties and covenants above throughout the term of the agreement.
- Conduct of the agent’s business
- The agent agrees to conduct all business in the Dealer Member’s name, subject to sections 2281 through 2283 relating to the use of trade names.
- The agent agrees to conduct all securities related business activities through the Dealer Member.
- Supervision of the agent by the Dealer Member
The Dealer Member agrees to be:
- responsible for the supervision of the agent’s conduct to provide reasonable assurance of the agent’s compliance with IIROC requirements and the requirements of any other securities regulatory authority to which the Dealer Member is subject, and
- liable to clients (and other third parties) for the agent’s conduct as if he or she were an employee.
- Written disclosure to clients
If the Dealer Member and the agent have agreed that the agent will advise the clients directly:
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,
the Dealer Member agrees to be responsible for ensuring that the agent has done so.
- Dealer Member assumes responsibility for clients
- In the event that:
- IIROC or another securities regulatory authority has advised the Dealer Member that it has started an investigation relating to allegations of misconduct by the agent, or
- the Dealer Member has reasonable grounds to believe that the agent has contravened or may be contravening one or more IIROC requirements or securities laws,
- the Dealer Member may immediately and without notice to the agent, assume responsibility for the client to the exclusion of the agent.
- The agent may not have any dealings or communications with the client as long as the Dealer Member has assumed this responsibility.
- The Dealer Member may designate another qualified person to provide services to the client, and that person may receive any remuneration that would have been paid to the agent.
- In the event that:
- Outside business activities
- The agent agrees not to conduct any outside business activity without disclosing to and obtaining the written consent of the Dealer Member.
- If the agent is involved in an outside business activity, the Dealer Member agrees to monitor and enforce compliance with the terms of this agreement directly and not through another employer or principal of the agent.
- The agent agrees to ensure that the outside business activity will not interfere with the Dealer Member or IIROC monitoring and enforcing compliance by the agent with this agreement or IIROC requirements.
- Access to premises
- The agent agrees to give the Dealer Member unrestricted access to the premises where the agent conducts securities related business on the Dealer Member’s behalf.
- The agent agrees that the books and records kept by the agent for the Dealer Member’s business:
- will conform to IIROC requirements,
- are the Dealer Member’s property,
- are available at all times for review by and delivery to the Dealer Member, and
- shall be delivered to the Dealer Member on termination of the agreement.
- The Dealer Member agrees to maintain financial institution bond and insurance policies that cover the agent’s conduct relating to the securities related business activities they conduct for the Dealer Member.
- Assignment of agreement
- The agent acknowledges that the Dealer Member has the right to assign to IIROC any or all of the Dealer Member’s rights to enforce the terms of this agreement that relate to IIROC requirements.
2305. –2399. Reserved.