3945. Daily and monthly trade supervision

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    1. A Dealer Member that has retail client accounts must have policies and procedures that specifically address daily and monthly supervision of trading activity in retail client accounts. These policies and procedures must outline actions to deal with problems or issues identified by the review.

    2. In addition to meeting the Dealer Member’s general supervisory obligations and any relevant obligations relating to trading, the policies and procedures relating to the supervision of retail client accounts must specifically address the detection of: 

      1. unsuitable trading,

      2. undue concentration of securities in a single account or across accounts,

      3. excessive trading,

      4. trading in restricted securities,

      5. conflict of interest between Registered Representative, Investment Representative, Portfolio Manager and Associate Portfolio Manager and client trading activity,

      6. excessive trade transfers and trade cancellation indicating possible unauthorized trading,

      7. inappropriate or  high risk trading strategies,

      8. deterioration of the quality of client holdings in an account,

      9. excessive or  improper crosses of securities between clients,

      10. improper or excessive employee trading,

      11. front running,

      12. account number changes,

      13. late payment,

      14. outstanding margin calls,

      15. undisclosed short sales,

      16. manipulative and deceptive activities, and

      17. insider trading.

    3. The Dealer Member must develop policies and procedures that specifically address supervising retail client accounts where a commission is not charged for trades placed by or for a client, such as fee based accounts. These policies and procedures must:

      1. address account activity review IIROC requirements, and

      2. use criteria other than commission levels. 

    4. The Dealer Member must specifically designate the following retail client accounts for supervision purposes:

      1. non-client accounts,

      2. discretionary accounts,

      3. managed accounts,

      4. registered accounts, and

      5. restricted accounts.

    There is no history log for this rule.

    There is no history log for this rule.