Client Account Management

The largest single element on the CIRE. Covers the full lifecycle of a client account under CIRO Rule 3401 (KYC), the modernized suitability framework, account documentation (Rule 3700 trade confirmations, Rule 3600 complaint handling), and client statement requirements. Tested in every sitting.

Rules tested:CIRO Rule 3401CIRO Rule 3600CIRO Rule 3700NI 81-101NI 41-101

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KYC obligation (Rule 3401)

KYC collected at account opening: identity, contact, employment, income, net worth, investment knowledge, objectives, time horizon, risk tolerance, risk capacity.
Modernized rule adds risk capacity as a distinct factor from risk tolerance.
KYC refresh at least every 36 months even with no client interaction.
Material change in client circumstances triggers immediate KYC update.

Suitability (modernized)

Suitability test applied at each recommendation, not just at account opening.
Includes a duty to consider lower-cost alternatives.
Concentration risk and complexity must be assessed at the portfolio level.
Off-book suitability obligations also apply to in-person seminars and digital advice.

Account opening documentation

New account application form (NAAF) signed by client and approved by supervisor.
Relationship disclosure document delivered before or at account opening.
Pre-trade disclosures: charges, conflicts, prospectus delivery for new issues.
Margin account: separate Margin Account Agreement Form required.
Joint accounts: tenant in common vs joint with right of survivorship choice documented.

Trade confirmations (Rule 3700)

Confirmation must contain: security, quantity, price, commission, settlement date, agent/principal capacity, trade date, time of execution if available.
Delivery promptly after the trade (effectively next business day).
Principal trades require disclosure of dealer's capacity and any markup.
Discretionary trades flagged as such on the confirmation.

Client statements and reporting

Monthly statements: any account with activity in the month.
Quarterly statements: any account with assets, even no activity.
Annual fee report: aggregated charges and compensation, separated from performance.
Annual performance report: time-weighted return for the period.

Complaint handling (Rule 3600)

Initial acknowledgment of a complaint required within 5 business days.
Substantive response required within 90 days of receipt.
OBSI escalation triggers when the firm refuses or fails to resolve.
Complaint records retained for 7 years; written reasons for refusal documented.

Exam traps

Trap:Treating KYC as a one-time account-opening task.Fix:KYC is an ongoing obligation. 36-month refresh is the floor; material change triggers immediate update.
Trap:Confusing risk tolerance with risk capacity. They are distinct factors under the modernized rule.Fix:Tolerance = willingness to accept risk. Capacity = ability to absorb loss.
Trap:Missing the duty to consider lower-cost alternatives in suitability.Fix:Modernized suitability includes lower-cost alternatives as a factor. Recommending a higher-fee product without considering alternatives is a breach.
Trap:Confusing complaint timelines (5 biz days acknowledgment vs 90 days substantive).Fix:5 = acknowledge. 90 = resolve. OBSI = escalation if unresolved.

Memory hooks — Element 3

Ciroexam · CIRE 2026

→Rule 3401 = KYC · refresh every 36 months
→Suitability test = at every recommendation
→Duty to consider LOWER-COST alternatives (modernized)
→Trade confirmation per Rule 3700 — next business day
→Complaint acknowledgment = 5 biz days
→Substantive response = 90 days
→Monthly statement if activity · Quarterly always