Chapter 12 - Registration (v1.2)

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Questions and Answers

What is a requirement for trade names used by Approved Persons in relation to dealer members?

The trade name must be more prominent than the dealer member's name.

The trade name must be accompanied by the dealer member's name. (correct)

The trade name must be confirmed by the compliance department.

The trade name must be registered with the CIRO.

Which activity must be supervised by the dealer member according to CIRO regulations?

Financial planning activities (correct)

National Registration Database submissions

Team name registrations

Trade name approvals

What is the primary function of the National Registration Database (NRD)?

To track client investment advice interactions.

To allow dealer members to submit trade name registrations.

To provide a platform for financial planning services payments.

To offer a single official record for registrants across Canada. (correct)

What must dealer members confirm before providing written consent for the use of a trade name?

That the name is not deceptive or likely to mislead the public. Signup and view all the answers

What types of individual submissions can be filed through the NRD?

Initial applications, amendments, and notices. Signup and view all the answers

In CIRO's view, what is essential to investment advice?

Financial planning. Signup and view all the answers

What must be done before a trade name can be used by an Approved Person?

Registration with the appropriate ministries or agencies. Signup and view all the answers

What is NOT a category of individual submissions through NRD?

Financial credentials. Signup and view all the answers

Who should provide guidance in conflict-of-interest situations for directors of a client's private corporation?

The compliance department. Signup and view all the answers

What is the validity period for the Canadian Securities Course (CSC) for first-time applicants before they must rewrite any required exams?

Three years Signup and view all the answers

How long do courses remain valid for individuals who have left a CIRO dealer member?

Three years Signup and view all the answers

What is required for individuals to extend the validity periods of their CSC and CPH courses?

Voluntary participation in CIRO’s CE program Signup and view all the answers

After what period must changes to registration information be reported to CIRO following a change?

Within two days Signup and view all the answers

What is the primary purpose of the CIRO's discretion to exempt applicants from rewriting an expired course?

To account for recent experience or equivalent education Signup and view all the answers

What action must dealer members take to ensure timely reporting of registration information changes?

Create internal reminders for employees Signup and view all the answers

What type of information must be provided within 30 days of a change on the registration form?

Notices of changes to residential address and citizenship Signup and view all the answers

Which of the following courses must be completed by first-time applicants within two years?

Conduct and Practices Handbook Course (CPH) Signup and view all the answers

What is the consequence for a new applicant if they let their CSC expire beyond the three-year limit?

They must rewrite any required exams Signup and view all the answers

Which department should changes in registration be reported to within the firm?

Compliance department Signup and view all the answers

What must be prominently disclosed in the offering materials for securities delivered to a U.S. resident with a Canadian self-directed tax advantaged retirement plan?

The securities are not registered with the SEC. Signup and view all the answers

Which statement is true regarding Canadian mutual funds for Canadians temporarily residing in the United States?

They are generally restricted from being offered. Signup and view all the answers

What is required by U.S. state laws when dealing with residents temporarily present in a U.S. state?

State registration is required unless exempt. Signup and view all the answers

How do U.S. state regulators vary in their approach to Canadian self-directed tax advantaged retirement plans?

They may require limited registration or conditional exemptions. Signup and view all the answers

What restriction applies to individuals or firms dealing with Canadian self-directed tax advantaged retirement plans without state registration?

They cannot conduct dealings with state residents. Signup and view all the answers

What must dealer members or salespersons avoid when relying on Rule 237?

Disclaiming Canadian law or jurisdiction for securities. Signup and view all the answers

What must the reinstatement form include regarding the cessation of employment?

Details about any improper conduct or CIRO rule violations. Signup and view all the answers

What is the consequence if an applicant is dismissed due to an alleged breach?

They will be automatically rejected for registration. Signup and view all the answers

How long does CIRO require notification when an Approved Person takes extended leave?

Within 10 business days. Signup and view all the answers

What happens to an Approved Person's Continuing Education (CE) requirements while on leave?

They remain responsible but may apply for hardship considerations. Signup and view all the answers

Which circumstance requires a Notice of Change of Current Employment to be filed?

When an Approved Person goes on maternity leave. Signup and view all the answers

What must be changed in the NRD when an Approved Person goes on leave?

The number of working hours must be changed to '0'. Signup and view all the answers

What must be reported on the NRD in relation to bankruptcy?

Approved person's bankruptcy Signup and view all the answers

What is a potential consequence for dealer members if an Approved Person fails to meet CE requirements?

They can be penalized for the individual's failure. Signup and view all the answers

Which activity is considered reportable under the guidelines?

Holding an officer position in a securities firm Signup and view all the answers

What is NOT a reason for CIRO to refuse an approval or transfer?

The applicant has prior approvals from other organizations Signup and view all the answers

What must applicants who have been absent from the industry for a considerable period do to maintain their fitness for registration?

Pass a current knowledge assessment before registration. Signup and view all the answers

Which of the following statements about ComSet is true?

ComSet reports only go to CIRO Signup and view all the answers

What is considered a substantial period of absence from the securities industry?

More than 6 months. Signup and view all the answers

What does CIRO NOT have the authority to do regarding applications?

Impose new rules independent of current regulations Signup and view all the answers

When should dealer members apply for hardship considerations regarding CE requirements?

Well before the CE cycle ends to allow processing time. Signup and view all the answers

What must the applicant do to challenge a CIRO approval decision?

Request a review within 30 business days Signup and view all the answers

Which of these is a valid concern CIRO might have regarding an applicant?

The applicant's integrity and solvency Signup and view all the answers

Why is it important for the CCO to ensure dealers are aware of outside activities?

To mitigate risks of conflict or confusion Signup and view all the answers

What type of employment activities are included in reportable activities?

All employment regardless of compensation Signup and view all the answers

If an individual does not request a review after a CIRO decision, what happens?

The council's decision becomes final Signup and view all the answers

Study Notes

Trade Names

Approved persons are permitted to use team names or trade names with written consent from the dealer member, as long as CIRO standards are met.
The trade name must be less prominent and always accompanied by the dealer member's name.
The dealer member must confirm the trade name is registered with the appropriate ministries or agencies, along with the required approvals, that it is not deceptive, and that it is filed through the National Registration Database (NRD) and with the relevant securities commissions.

National Registration Database (NRD)

The NRD is a web-based system allowing dealer members and advisors to electronically file registration forms.
It enables a single electronic submission for individual registrants to satisfy all jurisdictions in Canada.
It creates a single official record for each registrant and provides easy access to registrant information across the country.

Procedures for Individual Registration

Registrants use the NRD to file initial applications, amendments, and notices.
Applicants transferring between CIRO dealer members are automatically approved if the reinstatement form is filed within 90 days of termination from the previous firm.
However, the applicant must not have been dismissed or resigned due to an alleged breach of securities laws, CIRO rules, or the Criminal Code.

Extended Leave

CIRO must be notified within 10 business days when an Approved Person goes on maternity leave, long-term disability, or any other leave of absence.
A Notice of Change of Current Employment must be filed through the NRD, changing the number of working hours to "0" and identifying the type of leave.
Persons on leave remain responsible for registration requirements, including Continuing Education (CE).
Dealer members are penalized if anyone on leave fails to meet their CE requirements by the end of a cycle, but they may apply to CIRO for a hardship consideration.

Registration After an Absence

First-time applicants must have completed the Canadian Securities Course (CSC) within the past three years, and any other courses, including the Conduct and Practices Handbook Course (CPH), within the past two years.
Otherwise, they must rewrite any required exams.
For those who have left a CIRO dealer member, all courses remain valid for three years following the date of termination.
After that date, they must rewrite any required exams.
Individuals can extend the validity periods of their CSC and CPH by completing CE-eligible courses.
CIRO may grant an exemption from rewriting an expired course if the applicant can demonstrate recent experience or other education equivalent to the expired course material.

Reporting Changes to Registration Information

Timely notification of changes to registration information must be made to CIRO or a securities administrator.
Registrants must report changes within two days of the change.
The CCO should periodically canvass registered employees regarding changes to registration information.
Changes to current and previous residential address, citizenship, reportable activities, or previous employment must be submitted or delivered within 30 days.

Reportable Activities

Reportable activities include self-employment, officer and director positions, positions of influence such as leader of a religious organization, and any other securities-related business or employment activities, regardless of compensation.
The CCO should ensure the dealer member is aware of all outside activities and that policies and procedures are in place to mitigate risks of conflict or potential for confusion.
It is important to note that disclosures made through ComSet do not satisfy reporting requirements for a registration change through the NRD.

CIRO Registration Hearing Procedures

CIRO has the authority to approve individuals employed by or acting on behalf of dealer members; grant exemptions from CIRO's proficiency requirements; impose terms and conditions on approvals and membership; suspend and revoke approvals; and review decisions.
CIRO can refuse an approval or transfer if the applicant does not meet CIRO requirements; the council believes the applicant will not comply with CIRO rules and rulings; the applicant is not qualified due to a lack of integrity, solvency, or experience; or the approval is not in the public's interest.
The applicant or CIRO may challenge an approval decision and apply for a review within 30 business days following the release of the decision.

Rule 237 Exemption

The U.S. Securities and Exchange Commission (SEC) Rule 237 exempts Canadian dealers from registering with the SEC to sell securities to U.S. residents holding Canadian Self-Directed Tax Advantaged Retirement Plans (SD-TARP).
This exemption is subject to two conditions: all written offering materials must disclose that the securities are not registered with the SEC and are being offered or sold under an exemption; and dealer members relying on Rule 237 cannot disclaim the applicability of Canadian law or jurisdiction.

State Regulation

The SEC exemption only deals with federal U.S. securities laws.
Each U.S. state has its own securities laws requiring registration of dealers and individuals dealing with state residents.
Dealings with individuals temporarily present in a U.S. state are not permitted without state registration or an exemption, even for Canadian SD-TARP.
States have different approaches to exemptions for temporary residents and SD-TARP, ranging from blanket exemptions to limited registration requirements.

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Description

This quiz covers the essentials of using trade names in the financial industry, including the regulations set by CIRO. Understand the role of the National Registration Database (NRD) in facilitating dealer member and advisor registrations, along with the required procedures for compliance. Test your knowledge on the correct practices surrounding trade names and registration processes.