NI 31-103: National Instrument on Registration Requirements, Exemptions and Ongoing Registrant Obligations.

NI 31-103

National Instrument on Registration Requirements, Exemptions and Ongoing Registrant Obligations.

Definition

The CSA's foundational rule for registrant conduct. Sets out who must register (dealer, adviser, investment-fund-manager categories), the proficiency requirements, the KYC/KYP/suitability framework, conflict-of-interest rules, complaint handling, and recordkeeping. Adopted by every CSA member jurisdiction.

Source

National Instrument 31-103; Companion Policy 31-103CP

Where this shows up on the CIRE

Outcome 1.1
Outcome 3.1
Outcome 9.1

Test yourself

Two real CIRE-bank questions on this exact outcome. Click to reveal the answer and the rule citation.

1
CIRO was formed in January 2023 through the amalgamation of two self-regulatory organizations. Which statement best describes CIRO's current regulatory mandate?
Outcome 1.1 · click for answer
A.CIRO is a Crown corporation that reports directly to the Bank of Canada and sets monetary policy guidelines for dealer members.
B.CIRO is a national self-regulatory organization that oversees investment dealers, mutual fund dealers, and market integrity for equity and debt markets in Canada.Correct
C.CIRO is a provincial body incorporated under Ontario securities law that has delegated authority from the OSC only.
D.CIRO replaced the CSA and now writes National Instruments directly without provincial approval.
CIRO was created by the merger of IIROC and the MFDA and functions as Canada's single national SRO, overseeing both investment dealers and mutual fund dealers as well as market integrity functions previously held by IIROC. It operates under oversight of provincial and territorial securities commissions, not as a government body or replacement for the CSA. CIRO does not draft National Instruments independently.
2
A new client, age 68, indicates she is retired and relies on her investment portfolio for monthly income. She describes her risk tolerance as 'low.' Her registrant recommends a portfolio of 90% equity growth funds on the basis that equities outperform over the long term. Which KYC principle is most clearly violated?
Outcome 3.1 · click for answer
A.The identity verification requirement under NI 31-103, because the registrant did not confirm the client's date of birth.
B.The suitability obligation, because the recommendation is inconsistent with the client's stated risk tolerance, investment objectives, and income needs.Correct
C.The product due diligence obligation, because equity growth funds are not approved for retail distribution.
D.The account opening requirement, because the client's age disqualifies her from holding equity products.
NI 31-103 and CIRO rules require that recommendations be suitable having regard to the client's KYC profile, including risk tolerance, investment objectives, time horizon, and financial circumstances. A 90% equity allocation for a retired client with low risk tolerance and income dependency is inconsistent with those KYC factors on its face, triggering a suitability violation. There is no age restriction on holding equities, and equity growth funds are not categorically prohibited for retail clients.

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