3241. Order execution only account services 

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    1. A Dealer Member approved by IIROC to provide order execution only account services within either a separate legal entity or a separate business unit, must:
      1. implement the policies and procedures required by IIROC requirements, and
      2. not allow its order execution only account service clients to:
        1. use their own automated order system, as defined in securities laws, to generate orders to be sent to the Dealer Member or send orders to the Dealer Member on a pre-determined basis, or
        2. manually send orders or generate orders to the Dealer Member that exceed the threshold on the number of orders as set by IIROC from time to time,
      3. not provide order execution only account services to any person that is not an individual and is acting as and, registered or exempted from registration as a dealer in accordance with securities laws, and trades on a Marketplace for which IIROC is the regulation services provider.
    2. Despite clause (1)(iii), a Dealer Member may provide an order execution only account service to a person that is exempted from registration as a dealer under section 8.4 of National Instrument 31-103.
    3. A Dealer Member approved by IIROC to provide order execution only account services must, prior to opening an order execution only account:
      1. provide the following written disclosures to the client:
        1. a statement confirming that the Dealer Member will not provide any recommendations to the client and that the client is solely responsible for making all investment decisions in the order execution only account,
        2. a statement confirming that the Dealer Member will not be responsible for making a suitability determination for the client, as set out in sections 3402 or 3403 (other than as required by clauses 3402(3)(i) and 3403(4)(i)), and, in particular, that the Dealer Member will not consider the client’s personal and financial circumstances, investment needs and objectives, investment knowledge, risk profile, investment time horizon, nor other similar factors, and
        3. a statement confirming that the Dealer Member will not be responsible for making a determination that the products and account types offered by the Dealer Member in the order execution only account are appropriate for the client,

          and
      2. obtain a positive acknowledgement from the client, and each beneficial owner of the account, confirming that the client, and each beneficial owner, has received and understood the disclosures described in clause 3241(3)(i).
    4. The Dealer Member must maintain, in an accessible form, a record of the acknowledgement obtained under clause 3241(3)(ii) in the following form:
      1. the client’s signature or initials on a new client form or other document, specifically related to the disclosure and acknowledgement,
      2. an electronic acknowledgement attached to the disclosure and acknowledgement text, or
      3. a tape recording of a verbal acknowledgement.
    5. The Dealer Member must ensure that a client identifier is assigned to each client that trades on a Marketplace for which IIROC is the regulation services provider:
      whose trading activity on Marketplaces for which IIROC is the regulation services provider exceeds a daily average of 500 orders per trading day in any calendar month,
    6. The Dealer Member must ensure that a unique identifier is assigned to any adviser that trades on a Marketplace for which IIROC is the regulation services provider and that:
      1. is itself a client of the Dealer Member, or
      2. has been granted trading authority, direction or control over an account of a client of the Dealer Member.
    7. The Dealer Member must ensure that a unique identifier is assigned to any foreign adviser equivalent that trades on a Marketplace for which IIROC is the regulation services provider and that:
      1. is itself a client of the Dealer Member, or
      2. has been granted trading authority, direction or control over an account of a client of the Dealer Member.
    8. The client identifier required in subsection 3241(5), clause 3241(6)(i) and clause 3241(7)(i) must be in the form of:
      1. a Legal Entity Identifier for clients eligible to receive a Legal Entity Identifier under the standards set by the Global Legal Entity Identifier System, or
      2. an account number for all other client orders not included under subsection 3241(5), clause 3241(6)(i) and clause 3241(7)(i).
    9. If an account number is used as the client identifier under clause 3241(8)(ii), the Dealer Member must provide the account number and the name of the corresponding client to IIROC.
    10. The Dealer Member must provide each unique identifier assigned pursuant to clause 3241(6)(ii) and clause 3241(7)(ii) and the name of the corresponding firm to IIROC.
    11. For clients using an order execution only account that are not referred to under subsection 3241(5), clause 3241(6)(i), or clause 3241(7)(i), the Dealer Member must use an account number as the client identifier.
    12. The Dealer Member must ensure that each order in a listed security entered on a Marketplace for which IIROC is the regulation services provider contains:
      1. the Legal Entity Identifier of the Dealer Member if it is a non-executing Dealer Member that is not a Participant, and
      2. a designation to indicate the order is for an order execution only account.
    13. The Dealer Member must ensure that each order in a listed security entered on a Marketplace for which IIROC is the regulation services provider contains either:
      1. the identifier required under subsection 3241(5), clause 3241(6)(i), clause 3241(7)(i) or subsection 3241(11), or
      2. a designation to indicate the order is a bundled order or a multiple client order.
    14. The Dealer Member must ensure that each order entered on a Marketplace for which IIROC is the regulation services provider by or on behalf of a firm for whom a unique identifier must be assigned pursuant to clause 3241(6)(i) or clause 3241(7)(i) contains the unique identifier assigned to that firm.
    15. The Dealer Member must ensure that each order entered on a Marketplace for which IIROC is the regulation services provider by or on behalf of an account over which an adviser or foreign adviser equivalent has been granted trading authority, direction or control and an identifier was assigned pursuant to clause 3241(6)(ii) or clause 3241(7)(ii) contains the identifier assigned to that firm.
    16. Despite the requirement to include a client identifier assigned under subsection 3241(5) on an order sent to a Marketplace:
      1. if an adviser is assigned a unique identifier pursuant to clause 3241(6)(ii), each order entered by or on behalf of an account, over which that adviser has been granted trading authority, direction or control, on a Marketplace for which IIROC is the regulation services provider must contain the unique identifier assigned to that adviser, or
      2. if a foreign adviser equivalent is assigned a unique identifier pursuant to clause 3241(7)(ii), each order entered by or on behalf of an account over which that foreign adviser equivalent has been granted trading authority, direction or control, on a Marketplace for which IIROC is the regulation services provider must contain the unique identifier assigned to that foreign adviser equivalent.
    17. The non-executing Dealer Member that is not a Participant must ensure that the registration status of its Legal Entity Identifier has not lapsed.
    18. A Dealer Member approved by IIROC to provide order execution only account services within either a separate legal entity or a separate business unit, must ensure that:
      1. its order-entry systems and records are capable of labeling all account documentation, including monthly statements and confirmations, as “order execution only accounts” or other similar phrase, and
      2. the client monthly statements of its order execution only account services  are not consolidated with any other client account statements, including  those of any other business unit of the Dealer Member or of the Dealer Member itself. 

    3242. – 3244. Reserved.

    There is no history log for this rule.

    There is no history log for this rule.