CIRO Rule Citations Quick Reference Cheat Sheet

Registrants must identify, disclose, and manage material conflicts of interest. Where a conflict cannot be managed, it must be avoided. Conflicts include referral arrangements, proprietary product incentives, compensation conflicts, and personal financial dealings with clients.

Requirements for opening client accounts: identity verification, KYC collection, account documentation, delivery of account-opening documents. Sets the framework for what must be in the account file before the first transaction.

Dealers must establish and maintain a supervisory system: written supervisory procedures, designated supervisors at each branch, trade review processes, annual branch audits, and ongoing monitoring of registered individuals. Failure to supervise is itself a violation.

Branch manager or designated supervisor must approve margin accounts, options accounts, and short-selling accounts. Specific risk disclosure documents must be delivered and acknowledged before first trade. Documents approval requirements by account type and options level.

Before making a trade recommendation, registrants must assess suitability at the account level, not just at the individual trade level. Triggered at account opening, before recommendations, upon KYC trigger events, and on account transfer. Concentration, asset mix, and alignment with objectives are all assessed.

Dealers must take reasonable steps to achieve the most advantageous execution terms for client orders, considering price, speed, certainty of execution, and other relevant factors. Best execution is assessed against the consolidated market at the time of the order.

Operating requirements for branch offices: recordkeeping, branch audits, supervisory controls, communication and correspondence records. Records must be maintained for 7 years. Branch audit must occur at minimum annually.

Acknowledgement letter within 5 business days; substantive response within 90 calendar days; client must be informed of OBSI escalation right. All complaints must be logged and retained. OBSI cap is $350,000 (verify at obsi.ca).

Foundational definitions for Universal Market Integrity Rules: marketplace, participant, client, order, trade. Read in conjunction with all other UMIR rules.

General trading conduct requirements: fair, orderly, and efficient markets. Prohibits wash trades, painting the tape, marking the close, and other manipulative practices.

UMIR 3.3: Before executing a short sale, the participant must have a reasonable expectation of being able to borrow the securities for delivery (locate requirement). Naked short selling without a locate is prohibited. Locate must be obtained before order entry, not at settlement.

Marketplace participants must make reasonable efforts to achieve best price for client orders. Must consider all accessible marketplaces. The obligation exists regardless of which marketplace the order is routed to.

Trades executed in dark pools (order facilities without pre-trade transparency) must satisfy minimum price improvement requirements over the consolidated best bid or offer. Without the required price improvement, dark trading is not permitted.

Requirements for order entry: accurate identification of order type, client vs proprietary designation, short sale markers, and compliance with marketplace order types. Misclassifying an order (e.g., marking a short sale as a long) is a UMIR 7 violation.

When a participant fills a client order from its own inventory (principal trades), the trade must achieve best execution for the client. The participant's profit on the principal trade cannot come at the client's expense.

CIRO can halt, delay, or suspend trading in a security when required for market integrity (e.g., pending material news). During a halt, no orders may be entered, amended, or executed. Halts may be market-wide or security-specific.

Mandatory fields registrants must collect: identity, investment objectives, time horizon, risk tolerance, risk capacity, annual income, net worth, investment knowledge, other accounts, specific financial goals, material liabilities.

Referral arrangements between registrants and non-registrants must be disclosed in writing to the client before the referral service is provided. Disclosure must include the nature of the arrangement, compensation paid, and any resulting conflicts.

Registered individuals must disclose OBAs to their registered dealer before engaging in them. The dealer reviews and approves, prohibits, or conditions the activity. Failure to disclose is a compliance violation.

Prohibits registrants from borrowing from or lending to clients, entering arrangements where compensation depends on client returns outside approved structures, or accepting gifts that could influence conduct.

Registrants must keep accurate records of all client transactions, correspondence, account documents, and financial records for 7 years. Records must be in a form that is accessible for regulatory inspection.

Governs recognized exchanges, ATSs, and other marketplaces in Canada. Requires fair access, transparent order display, and regulatory oversight. TSX, TSX-V, Cboe Canada, NEO Exchange, and dark ATSs are governed under this NI.

Trading rules applicable to marketplace participants: order-handling obligations, protection against trading through better prices (order protection rule), and best execution requirements at the marketplace level.

Risk controls required for electronic trading systems and direct electronic access (DEA): pre-trade filters, credit limits, kill-switch capabilities, and participant responsibility for DEA client orders.

Requires mutual funds to file a simplified prospectus, annual information form, and Fund Facts document. The Fund Facts (2-page summary) must be delivered to investors before purchase. Delivery is the trigger for the right of withdrawal.

Investment and operational restrictions for conventional mutual funds: no more than 10% of assets in any single issuer; no short selling beyond permitted amounts; no borrowing for investment purposes beyond prescribed limits; concentration and diversification requirements.

Governs alternative mutual funds (previously commodity pools). Permits strategies not available to conventional funds: short selling up to 50% NAV, borrowing up to 50% NAV, derivatives used beyond hedging. Requires enhanced disclosure.

Prohibits deferred sales charges on new mutual fund purchases (effective June 1, 2022 in most jurisdictions). Governs trailer fee payment rules and disclosure. Front-end load and no-load structures remain permitted.

Governs the prospectus process for securities offerings: long-form prospectus requirements for IPOs and other new issues. 10-business-day right of withdrawal after receiving the final prospectus. Governs the conduct of issuers, underwriters, and dealers in the distribution process.

Federal statute imposing AML and ATF obligations on reporting entities including securities dealers. Requires: client identification, beneficial ownership determination, business relationship records, LCTR for cash $10,000+, EFT Report for international wires $10,000+, STR for suspicious activity (no threshold). 5-year record retention for AML-specific records. Administered by FINTRAC.