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.
    2. 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 and, in particular, that the Dealer Member will not consider the client’s current financial situation, investment knowledge, investment objectives and time horizon, risk tolerance, the client account’s investment portfolio composition and risk level, 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, 
      2. and
      3. 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(2)(i).
    3. The Dealer Member must maintain, in an accessible form, a record of the acknowledgement obtained under clause 3241(2)(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.
    4. 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: 
      1. 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, 
      2. that is not an individual and is registered as a dealer or adviser in accordance with securities laws, or
      3. that is not an individual and is in the business of trading securities in a foreign jurisdiction in a manner analogous to a dealer or adviser.
    5. The Dealer Member must provide each client identifier assigned pursuant to subsection 3241(4) and the name of the corresponding client to IIROC.
    6. 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 client for whom a client identifier must be assigned pursuant to subsection 3241(4) contains the client identifier assigned to that client.
    7. 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.