CSA Staff Notice 25-311: 2023 Annual Activities Report on the Oversight of CIRO and CIPF

CSA Staff Notice 25-311
2023 Annual Activities Report on the
Oversight of Canadian Investment
Regulatory Organization and
Canadian Investment Protection Fund
March 28, 2024 www.securities-administrators.ca csa-acvm-secretariat@acvm-csa.ca

CSA Staff Notice 25-311 2
TABLE OF CONTENTS
1 2023 Highlights 3
2 Who We Are 4
3 Executive Summary 6
4 What We Do 7
5 Post-Close Initiatives 9
6 Who We Regulate
(A) Canadian Investment Regulatory Organization (B) Canadian Investor Protection Fund 11 16 7 Composition of Oversight Committees 19 8 Rule/By-law/Policy and Procedures Amendments 20 9 Questions 22

CSA Staff Notice 25-311 3
2023 HIGHLIGHTS

CSA Staff Notice 25-311 4
WHO WE ARE
The Canadian Securities Administrators (CSA) is the council of Canada’s provincial and territorial securities regulators. Its objective is to improve, coordinate and harmonize regulation of the Canadian capital markets to ensure the smooth operation of Canada’s securities industry and protect investors. Applicable legislation in each province and territory provides a securities regulator with the power to recognize a self-regulatory organization through a Recognition Order. There is currently one recognized self-regulatory organization responsible for investment dealers and mutual fund dealers (SRO), the Canadian Investment Regulatory Organization (CIRO), which operates as a successor to the Investment Industry Regulatory Organization of Canada (IIROC) and the Mutual Fund Dealers Association of Canada (MFDA). IIROC and the MFDA amalgamated to continue as the New Self-Regulatory Organization of Canada (New SRO), effective January 1, 2023, which subsequently changed its name to CIRO on June 1, 2023. There is currently one approved/accepted investor protection fund (IPF), the Canadian Investor Protection Fund (CIPF) formed through the amalgamation of two protection funds, the former Canadian Investor Protection Fund and the MFDA Investor Protection Corporation, on January 1,
2023. Analogous to the recognition of CIRO, CIPF has been approved/accepted1 through
Approval Orders.
CIRO is recognized and CIPF is approved/accepted by the securities regulatory authorities in all thirteen provinces and territories (the Recognizing Regulators or RRs). 1 In Québec, CIPF is an accepted con�ngency fund. In all other provinces and territories, CIPF is an approved compensa�on fund through individual Approval Orders.

CSA Staff Notice 25-311 5
Acronym Name of Recognizing Regulator
BCSC British Columbia Securities Commission
ASC Alberta Securities Commission
FCAA Financial and Consumer Affairs Authority of Saskatchewan MSC Manitoba Securities Commission OSC Ontario Securities Commission AMF Autorité des marchés financiers FCNB Financial and Consumer Services Commission of New Brunswick NSSC Nova Scotia Securities Commission PEI Prince Edward Island Office of the Superintendent of Securities NL Office of the Superintendent of Securities, Digital Government and Service Newfoundland and Labrador YT Office of the Yukon Superintendent of Securities NT Office of the Superintendent of Securities, Northwest Territories NU Office of the Superintendent of Securities, Nunavut Office

CSA Staff Notice 25-311 6
EXECUTIVE SUMMARY
We are pleased to share CSA Staff Notice 25-311 2023 Annual Activities Report on the Oversight of Canadian Investment Regulatory Organization and Canadian Investor Protection Fund (Report), our Report which summarizes the key activities through which we conduct oversight of CIRO and CIPF. This Report covers the period of January 1 – December 31, 2023 (the Reporting Period). The amalgamations to form CIRO and CIPF were the result of the CSA’s in-depth review of the SRO framework and started in 2019. After extensive stakeholder consultations and the publication of a consultation paper, which sought public input on key issues identified, CSA Position Paper 25-404 New Self-Regulatory Organization Framework was published on August 3, 2021 (Position Paper). The CSA took the position that the establishment of a new single enhanced SRO and, separately, the consolidation of the two IPFs into a single protection fund, independent from the SRO, is the best solution to address the issues that had been identified and to provide a framework for efficient and effective regulation in the public interest at this point and, as the capital markets continue to evolve, into the foreseeable future. Much of our focus during the Reporting Period has been to work on various solutions outlined in the Position Paper to be implemented after the close of the amalgamation transactions. The nine post-close initiatives are being conducted alongside of our continuing regular oversight, which includes our review of amendments to CIRO rules and CIPF policies and by-laws; review of required filings from CIRO and CIPF; and the CSA’s 2023 Oversight Review of specific processes in three functional areas of CIRO. Post-close initiatives will continue to be an area of focus in 2024. This Report is an important tool for engaging with our stakeholders. We hope that the Report in its new format will serve to: (i) improve transparency; (ii) foster public confidence in the regulatory framework; and (iii) explain our role in overseeing CIRO’s and CIPF’s compliance with securities regulation requirements. We welcome any questions or feedback that you may have.

CSA Staff Notice 25-311 7
WHAT WE DO
The oversight of CIRO is coordinated through a Memorandum of Understanding (MOU) among the RRs. The MOU describes the oversight program used by the RRs to: (i) oversee CIRO’s performance of its self-regulatory activities and services; and (ii) ensure that CIRO is acting in the public interest and complying with the terms and conditions of its Recognition Orders. A similar MOU exists for the oversight of CIPF. Coordinators Each MOU sets out that two RRs are designated as coordinators, tasked with the role of coordinating, communicating and scheduling activities of the oversight program between the RRs, and between the RRs and CIRO or CIPF (Coordinators). The Coordinators serve for four years on a staggered rotation basis among the two designated RRs. During the Reporting Period, BCSC and OSC were designated as the inaugural Coordinators by consensus of all the RRs. One of two Coordinators will be replaced and thereafter each Coordinator will have a four-year term. Oversight Committees As required by each MOU the following oversight committees have been established:

• The CSA Market Regulation Steering Committee (MRSC) is the forum for coordination
  and providing updates where issues relate to both CIRO and CIPF.
• Oversight committees for CIRO and CIPF (Oversight Committees) are operational
  committees under the oversight of MRSC. Each Oversight Committee acts as forum to discuss issues, concerns and proposals related to the oversight of their respective entities. The committees included representatives from RRs, with the Coordinators serving as the leads. CSA Oversight Program Components of the SRO and IPF oversight program are outlined below.

CSA Staff Notice 25-311 8
Oversight
Function Activities During the Reporting Period Annual Risk Assessment

• Evaluation of each entity’s potential inherent risks and mitigating controls in each
  functional area of the entity.
• Evaluation can become the basis of future oversight activities.
  Review of
  Proposed Rules
• CIRO is required to seek approval from the RRs for proposed new rules, policies,
  and constating documents (collectively, the rules) and by-laws, and any changes to existing rules and by-laws.
• CIPF is required to seek approval or non-objection of any changes to certain
  policies (e.g., coverage policy) and its by-laws.
• A “housekeeping” rule change is one that has no material impact on investors,
  issuers, registrants, CIRO, CIPF, or the Canadian capital markets generally (e.g., changes of an editorial nature; changes necessary to conform to applicable securities legislation, statutory or legal requirements, accounting or auditing standards).
• If a rule change is not classified as housekeeping, it is published for public
  comment.
  Review of Materials
  Filed
• CIRO and CIPF are responsible for filing certain information (other than proposed
  rules or by-laws) with each RR.
• This information includes, but is not limited to, reports on financial condition,
  regulatory self-assessment, risk management, systems integrity, market surveillance, internal audit, progress on compliance examination results, and enforcement matters.
• During the Reporting Period, 72 filings were reviewed.
• Staff of the RRs (Staff) reviewed issues and the materials filed, which informed
  the annual risk assessment.
  Meetings • During the Reporting Period, quarterly meetings were scheduled with CIRO and semi-annual meetings with CIPF to discuss the oversight process and to share information about emerging and/or ongoing regulatory issues and trends.
• In addition to regularly scheduled bi-weekly meetings with CIRO and CIPF,
  numerous ad hoc meetings were held throughout the Reporting Period as part of the oversight of specific issues – primarily relating to the integration of the predecessor SROs and, separately, the predecessor IPFs, as well as proposed rule amendments and filing requirements. Oversight Reviews • A more in-depth process for Staff to make an independent assessment of whether and how CIRO or CIPF have met their regulatory obligations.
• The scope of an oversight review is determined by the results of the annual risk
  assessment and/or specific issues that arise on a periodic basis.
• As part of an oversight review, Staff may interview CIRO or CIPF staff, review
  written policies and procedures to understand the systems and processes in place, and examine files on a sample basis.
• During the Reporting Period, the RRs jointly completed a risk-based oversight
  review of CIRO that targeted specific processes within the areas of: (i) corporate governance; (ii) trading review and analysis; and (iii) financial compliance of investment dealers and mutual fund dealers. The results of the oversight review have been published in a separate report also on March 28, 2024.

CSA Staff Notice 25-311 9
POST-CLOSE INITIATIVES
After the amalgamation of the predecessor SROs and IPFs, during the Reporting Period, the Oversight Committees continued to work on various solutions outlined in the Position Paper, published on August 3, 2021, to be implemented after the closing of the transactions. The Oversight Committees’ work included monitoring post-close transition and implementation initiatives of varying priorities, as set out below.

CSA Staff Notice 25-311 10
Post-close Initiative Priority /
Status
Scope

1. Dual registration
   policy matters and exemptions
   High • CSA is considering dual registration matters and whether there are any potential challenges associated with these applications. Staff and CIRO staff are discussing novel issues related to the dual registration of investment dealers and mutual fund dealers.
2. Dual registration
   applications
   High • CSA and CIRO are working to complete an internal guide for reviewing dual registration applications. As policy issues are identified, they are being discussed among Staff working on Initiative #1 (dual registration policy matters and exemptions) and #2 (dual registration applications).
3. Directed
   commissions
   High • CSA is monitoring steps that CIRO is proposing relating to the compensation of investment dealing representatives and mutual fund dealing representatives, including the publication on January 25, 2024 of a position paper requesting public comments on CIRO’s proposed approaches.
4. SRO rulebook
   consolidation
   High • Staff to review and recommend for approval CIRO proposals to consolidate and harmonize the rulebooks for investment dealers and mutual fund dealers over five phases, which commenced in late 2023.
5. CIRO/CIPF New Co￾operative Operating
   Agreement
   High • In 2022, the predecessor SROs and IPFs entered into a Transitional Agreement, that came into effect on January 1, 2023, designed to ensure that existing arrangements between the predecessor entities would continue to govern the relationship between CIRO and CIPF.

• CSA is monitoring the negotiation of the new Co-operative
  Operating Agreement, which will establish the respective responsibilities of CIPF and CIRO.

6. Coordination and
   exchange of information
   Medium • CSA continues to engage CIRO on the coordination and exchange of information, regarding the supervision of market related data and other information.
7. Name change Complete • The name change to CIRO was completed in July 2023,
   with changes made to the Recognition Orders, MOU, and SEDAR+.2
8. National Registration
   Database (NRD) development
   Complete • NRD development to automate the dual registration process and enhancements to improve clarity with regard to dual-registered dealer firms.
9. Information
   processor orders
   Complete • Variation and restatement of the information processor’s Designation Order, effective June 1, 2023, to reflect the SRO amalgamation. 2 Similarly, CIPF’s name change in French from “Fonds canadien de protec�on des épargnants” to “Fonds canadien de protec�on des inves�sseurs” came into effect on January 1, 2023.

CSA Staff Notice 25-311 11
WHO WE REGULATE
(A) CIRO
(i) Regulatory Status
The RRs have given CIRO, as an SRO, the responsibility to govern the operations and business conduct of investment dealers and mutual fund dealers and their representatives, and the trading activity on members of CIRO that are marketplaces. The authority of CIRO to carry out certain regulatory functions is set out in the Recognition Orders, along with the terms and conditions that CIRO is to comply with in carrying out its regulatory functions. (ii) Member Firm Statistics As of December 31 2023 2022 % Change Assets Under Management $4.5 Trillion $4.1 Trillion 9.8% Approved Persons 109,777 108,987 0.7% Firms Investment Dealer Mutual Fund Dealer Dually Registered Total 169 82 4 255 173 83 0 256 - 0.4% The increase in CIRO’s assets under management was mainly attributable to an increase in equity markets during the Reporting Period. (iii) Member Firms by Head Office Location The following diagram represents the distribution of member firms by head office location.

CSA Staff Notice 25-311 12
(iv) Rule Reviews
During the Reporting Period, seven CIRO rule amendments were approved or not objected to by the RRs. Five rule amendments continue to be under review as of December 31, 2023. (v) Materials Filed CIRO was responsible for filing certain information with Staff on a regular or ad hoc basis. During the Reporting Period, 60 filings were received from CIRO and reviewed by Staff. (vi) Meetings and Other Discussions During regular meetings held with CIRO, among other varied topics, the following key subjects were discussed and followed up by Staff. Topic Activities During the Reporting Period SRO Transition Plan • Focus on core integration priorities including: branding initiatives; building of new Toronto office; Toronto and Calgary office moves; and migration of the mutual fund dealer information technology environment (e.g., networks, servers at data centres) to the existing investment dealer environment.

• Completion of a revised Risk Management Framework, which incorporates the
  risks of both the investment dealer and mutual fund dealer environments. The Risk Management Framework was reviewed by Staff.
• Completion of an integrated budget for CIRO’s 2024 fiscal year (Fiscal 2024),
  which was reviewed by Staff.
• Completion of a statement of priorities for Fiscal 2024, and commencement
  of: (i) a strategic plan for 2025 – 2027 and (ii) changes to Board of Directors mandate and Board Committee mandates. Staff’s input continues to be provided before these documents are finalized.

CSA Staff Notice 25-311 13
Topic Activities During the Reporting Period
Short Selling • Joint CSA/IIROC Staff Notice 23-329 Short Selling in Canada was published on December 8, 2022. The consultation resulted from: (i) concerns raised by the Capital Markets Modernization Taskforce; and (ii) issues identified during the CSA’s work on CSA Staff Notice 25-306 Activist Short Selling Update. The consultation provided an overview of the existing regulatory landscape surrounding short selling and requested public feedback on areas for regulatory consideration.

• CSA/CIRO’s responses to the public comment letters were published in Joint
  CSA/CIRO Staff Notice 23-332 Summary of Comments and Responses to CSA/IIROC Staff Notice 23-329 Short Selling in Canada on November 16,

2023. CSA and CIRO have formed a working group to more broadly examine
      short selling issues in the Canadian market context.

• CIRO also published on January 11, 2024 a rule proposal to support and clarify
  the short selling framework by adding a new positive requirement in UMIR to have, prior to order entry, a reasonable expectation to settle a short sale. Proposed guidance was published for comment on the same date to clarify various current and proposed requirements related to short sales and failed trades. Crypto Assets • CIRO’s Membership Intake Team continued to review applications for: (i) new membership from crypto-asset trading platforms; and (ii) business change from existing CIRO investment dealers planning on expanding into the distribution of crypto asset products.
• Future new rules and guidance, as well as standardized compliance
  procedures, relating to crypto assets are expected to be developed by CIRO in collaboration with Staff. Crypto Insolvency Simulation
• CIRO conducted a crypto asset simulation on April 19, 2023, in which 14 firms
  participated. The focus of the simulation was to identify and understand the risks and issues associated with the suspension of a CIRO-registered crypto￾asset trading platform. Knowledge gained from the simulation will be used to develop a crisis response plan. Arbitration Program Review
• On February 1, 2023, CIRO published a consultation paper Proposal on
  Distributing Funds Disgorged and Collected through New SRO Disciplinary Proceedings to Harmed Investors. The comment period closed on May 1, 2023 and CIRO staff are still in the process of reviewing the comments. Continuing Education • CIRO staff continued discussions regarding the harmonization of the mutual fund dealer and investment dealer continuing education (CE) programs – at the earliest at the end of the next CE reporting cycle, end of 2025.
• First reporting cycle of the mutual fund dealer member CE program ended on
  November 30, 2023. In the last quarter of 2023, over 850 CE activities and 318,000 attendance records have been added to the CE reporting and tracking system (CERTS), and approximately 90 third-party (non-member) education providers have been added to CERTS since the commencement of the CE program.
• In the last quarter of 2023, the investment dealer member CE accreditation
  program approved 579 distinct courses, and 2,807 distinct courses since the inception of in-house accreditation. This exceeds application volumes for the same period in previous years made through the former third-party provider of CE course accreditation services to IIROC.

CSA Staff Notice 25-311 14
Topic Activities During the Reporting Period
Proficiency Regime • CIRO has undertaken a multi-year initiative to enhance its proficiency regime with the intention of launching new standards in 2026.

• High proficiency standards play a key role in investor protection, and the
  integrity and efficiency of capital markets.
• Consultation paper Proposed Proficiency Model was published on July 7, 2023
  to seek feedback on a proficiency model for individuals at investment dealers, approved under the Investment Dealer and Partially Consolidated (IDPC) Rules. CIRO is proposing a shift from the existing course-centric model (i.e., exams tied to courses) to an assessment-centric model (i.e., exams based on competency profiles). The comment period ended on September 20, 2023 and CIRO staff are in the process of reviewing the comments.
• CIRO Notice 23-0096 Proposed Clarifying Amendments to Registration and
  Proficiency Requirements was published on August 31, 2023 to refine and clarify certain registration and proficiency requirements in the IDPC Rules. The comment period ended on October 2, 2023.
• CIRO updated competency profiles for Approved Person categories at an
  investment dealer, in response to public comments where appropriate. The updated competency profiles were published on September 25, 2023.
• CIRO issued request for proposals aimed at selecting a vendor, or vendors, in
  2024 to develop and maintain examinations, and deliver examinations for individuals at investment dealers. Client Focused Reforms (CFRs)
• With the implementation of CFRs conflict of interest requirements on June 30,
  2021 and the remaining CFRs requirements, including know your client, know your products and suitability requirements, on December 31, 2021, the CSA, IIROC and the MFDA continued to harmonize their compliance modules specific to the CFRs.
• Findings from the coordinated reviews by the CSA, IIROC and the MFDA
  during 2022 on the enhanced conflict of interest requirements under the CFRs were published in Joint CSA / CIRO Staff Notice 31-363 Client Focused Reforms: Review of Registrants' Conflict of Interest Practices and Additional Guidance on August 3, 2023.
• The CSA and CIRO are continuing to conduct reviews in 2024 to assess
  registrants’ compliance with other CFRs obligations, including the know your client, know your product, and suitability determination requirements that came into force on December 31, 2021. Together, the CSA and CIRO are discussing the findings and plan to publish additional guidance, which will include suggested practices for industry on compliance with these reform areas. Cybersecurity • Cybersecurity table top exercises were conducted for small and medium-sized investment dealer and mutual fund dealer firms in Toronto on October 26, 2023 and in Calgary on November 1, 2023. These were informal, discussion-based sessions to improve cybersecurity resilience, in which almost 200 individuals participated from 128 dealer members, four law firms, and three insurance companies. Participants discussed responses to a cybersecurity incident, walking through different scenarios. Modernizing Back￾Office Arrangements / Subloans
• CIRO is engaging with industry to discuss the modernization of rules around
  back-office arrangements and subordinated debt financing.
• GN-4300-23-001 Direct Registration System Guidance was published on
  October 12, 2023 and sets out the IDPC Rules requirements as they relate to the dematerialization of physical certificates and the recording of securities held with issuers in Direct Registration Systems.

CSA Staff Notice 25-311 15
Topic Activities During the Reporting Period

• Future topics for consultation include account transfers and arrangement
  between introducing and carrying brokers.
  Total Cost Reporting • CSA and Canadian Council of Insurance Regulators (CCIR) published changes on April 20, 2023 to enhance total cost reporting (TCR) disclosure for investment funds and segregated funds. The TCR enhancements (Enhancements) will improve transparency and require annual reporting to clients to show the ongoing costs of owning mutual funds, exchange-traded funds, scholarship plans, and segregated funds.
• Enhancements were jointly developed by the CSA, CCIR, the Canadian
  Insurance Services Regulatory Organizations and CIRO.
• Enhancements will take effect on January 1, 2026.
  Other Initiatives • Staff engaged CIRO staff on other matters of regulatory concern, such as:
  o CIRO staffing matters; o CIRO’s ongoing role in the surveillance of equity markets in real time, along with its monitoring of debt trading, cross asset trading between derivatives listed on the Montréal Exchange and the underlying securities, and Canadian crypto asset trading platform activity; o Establishment of Office of the Investor to enhance investor education, perform investor research, and support CIRO’s Investor Advisory Panel; o Examination of order execution only dealers and their business continuity plans; and o Proposed delegation to CIRO of the AMF’s responsibility for examining the compliance of mutual fund dealers’ activities in Québec.

CSA Staff Notice 25-311 16
(B) CIPF
(i) Regulatory Status
CIPF is approved and accepted as an IPF3 to provide protection within prescribed limits to eligible clients of CIRO dealer member firms suffering losses, if client property held by a member firm was unavailable as a result of the insolvency of a dealer member. (ii) Fund Statistics CIPF maintains two separate funds designed to provide coverage to eligible clients of CIRO members: an Investment Dealer Fund (IDF) and Mutual Fund Dealer Fund (MFDF). The IDF liquidity resources are available to satisfy potential claims for coverage by clients of CIRO members registered as an “investment dealer” or in the categories of both “investment dealer” and “mutual fund dealer”. The MFDF liquidity resources are available to clients of CIRO members registered as a “mutual fund dealer”, except for customer accounts located in Québec for which mutual fund dealers are not required to contribute to the MFDF and, accordingly, those accounts are not afforded coverage by the MFDF. Both funds maintain their own insurance and lines of credit. As of December 31 2023 2022 % Change IDF4 General Fund Insurance Lines of Credit $543M $440M $125M $516M $440M $125M 5.2% - - MFDF General Fund Insurance Lines of Credit $53M $40M $30M $50M 5 $40M $30M 6.0% - - TOTAL $1,231M $1,201M 2.5% (iii) Rule Reviews During the Reporting Period, the RRs approved or did not object to housekeeping amendments to CIPF’s Coverage Policies and By-law No. 1. 3 In Québec, CIPF is an accepted con�ngency fund. Please refer to Footnote #1 on page 4. 4 Values rela�ng to IDF’s and MFDF’s General Fund, insurance and lines of credit are from CIPF’s 2023 unaudited annual financial statements. 5 The value of the MFDF General Fund as of December 31, 2022 differs from what was previously published in CSA Staff No�ce 25-310 2022 Annual Activities Report on the Oversight of Self-Regulatory Organizations and Investor Protection Funds due the adop�on at amalgama�on and retrospec�ve applica�on of former CIPF’s accoun�ng policy of valuing bonds at fair value.

CSA Staff Notice 25-311 17
(iv) Materials Filed
CIPF was responsible for filing certain information with Staff on a regular or ad hoc basis. During the Reporting Period, 12 filings were received from CIPF and reviewed by Staff. (v) Meetings and Other Discussions During regular meetings held with CIPF, among other varied topics, the following key subjects were discussed and followed up by Staff. Topic Activities During the Reporting Period IPF Transition Plan • CIPF continues with its post-close integration efforts. o Review of investment policies and strategies for the IDF and MFDF to determine if one policy for both funds should be implemented. o Fit-for-purpose review of the investment dealer credit risk model to assess if it is appropriate to be extended to the mutual fund dealer universe. This is expected to be a multi-year project. o Continuing to consolidate the predecessor IPFs’ enterprise risk management practices. o Ongoing consideration with CIRO regarding dual registration and its impact on CIPF’s liquidity resources. o Ongoing consideration with CIRO regarding introducing/carrying broker arrangements between investment dealers and mutual fund dealers, and its impact on where assessments should be directed and where losses should be claimed. Review of Adequacy of Assets in the Funds

• Separate general funds, insurance and lines of credit continue to be
  maintained for the funds covering investment dealers and mutual fund dealers.
• For the IDF, CIPF continues to use a credit-risk based fund model to project
  its liquidity resource requirement and assist in the setting of its fund size (IDF Model). During the Reporting Period, CIPF’s Board reviewed the adequacy of the level of resources available in relation to the risk exposure of investment dealer member firms. No changes have been made to the methodology,

CSA Staff Notice 25-311 18
Topic Activities During the Reporting Period parameters and input since October 2021 when former CIPF’s Board reviewed and approved the IDF Model.

• The fund size of MFDF continues to be in excess of its general fund size target
  of $50 million. MFDF continues to have a secondary layer of insurance in the amount of $20 million in respect of any losses to be paid out of the MFDF in excess of $50 million. This is in addition of the original layer of insurance of $20 million in respect of any losses to be paid out of the MFDF in excess of $30 million. Crypto Assets • The Coverage Policy continues to state explicitly that crypto assets are excluded from CIPF’s coverage.
• CIPF will undertake regular reviews of the scope and terms of its Coverage
  Policy; however, the primary areas of interest for CIPF continue to be the custody, control and pricing of crypto assets.
• CIPF staff participated in CIRO’s crypto asset insolvency simulation on April
  19, 2023.
  Insolvency Simulation
  Exercises
• RRs participated in the first Phase 3 exercise of CIPF’s insolvency simulations
  in Vancouver and Calgary on October 24, 2023, along with CIRO staff and insolvency professionals.
• Focus of Phase 3 is on managing the insolvency of a mutual fund dealer/dual￾registered member firm.
• Second Phase 3 simulation will be held with stakeholders in Montréal in 2024.
  Meeting of International
  IPFs
• CIPF participated in the meeting of international protection funds on May 26,
  2023 in Hungary at the 2023 Forum of International Investor Compensation Schemes, which included a discussion on the coverage of crypto assets and simulations. CIPF’s understanding is that no compensation fund globally covers crypto assets at this time.
• Opportunity to exchange information with international compensation funds
  has been valuable.
  Insolvencies • During the Reporting Period, there were no CIRO member insolvencies whereby CIPF was actively involved.

CSA Staff Notice 25-311 19
COMPOSITION OF OVERSIGHT COMMITTEES
Market Regulation Steering Committee
AMF Dominique Martin MSC Paula White
ASC Lynn Tsutsumi NL Scott Jones
BCSC Mark Wang NSSC Doug Harris / Chris Pottie FCAA Liz Kutarna OSC Susan Greenglass FCNB Clayton Mitchell PEI Steven Dowling CIRO Oversight Committee AMF Jean-Simon Lemieux Pascal Bancheri Serge Boisvert Roland Geiling Catherine Lefebvre Lucie Prince Herman Tan Cheick Kaba Diakité ASC Sasha Cekerevac Rose Rotondo Gerald Romanzin Amy Tollefson BCSC Michael Brady Joseph Lo Eric Lan Navdeep Gill Zach Masum Anne Hamilton Liz Coape-Arnold Michael Grecoff FCAA Liz Kutarna Curtis Brezinski FCNB Amélie McDonald Nick Doyle MSC Paula White Angela Duong Jon Lamb NL Scott Jones NSSC Doug Harris Brian Murphy Angela Scott NT Matthew Yap NU Debora Bissou OSC Joseph Della Manna Karin Hui Scott Laskey Stacey Barker Christopher Byers Yuliya Khraplyva Dimitri Bollegala Felicia Tedesco PEI Curtis Toombs YT Rhonda Horte CIPF Oversight Committee AMF Jean-Simon Lemieux Lucie Prince Herman Tan Cheick Kaba Diakité ASC Sasha Cekerevac Rose Rotondo Gerald Romanzin Amy Tollefson BCSC Michael Brady Joseph Lo Georgina Steffens Eric Lan Zach Masum Anne Hamilton Liz Coape-Arnold FCAA Liz Kutarna Curtis Brezinski FCNB Amélie McDonald Nick Doyle MSC Paula White Angela Duong Jon Lamb NL Scott Jones David White NSSC Doug Harris Brian Murphy Angela Scott NT Matthew Yap NU Debora Bissou OSC Joseph Della Manna Stacey Barker Karin Hui Scott Laskey Christopher Byers PEI Curtis Toombs YT Rhonda Horte

CSA Staff Notice 25-311 20
RULE/BY-LAW/POLICY AND PROCEDURES AMENDMENTS
As of December 31, 2023
Completed CIRO Rule/By-Law Amendments Publication Date Housekeeping Amendments to IDPC Rules Regarding Margin Requirements for Securities Loan, Repurchase Agreements, and Reverse Repurchase Agreements with Term Risk March 2, 2023 Amendments to Permit Reduced Margin for Swap Position Partial Offsets Held in Inventory April 13, 2023 Amendments to IDPC Rules and Form 1 Regarding the Floating Index Margin Rate Methodology May 18, 2023 Housekeeping Amendments to By-Law No. 1 and the Mutual Fund Dealer Rules of CIRO Regarding the Permanent Name Change of New SRO to CIRO June 1, 2023 Housekeeping Amendments to UMIR July 27, 2023 Amendments to UMIR and IDPC Rules to Facilitate the Investment Industry’s Move to T+1 Settlement October 26, 2023 Housekeeping Amendments to Mutual Fund Dealer Form 1 October 26, 2023 Completed CIPF Rule/By-Law Amendments Publication Date Housekeeping Amendments to the CIPF Coverage Policies and By￾law Number 1 July 27, 2023

CSA Staff Notice 25-311 21
As of December 31, 20236
In Progress CIRO Rule/By-Law Amendments Publication Date Proposed Amendments Respecting Reporting, Internal Investigation and Client Complaint Requirements January 13, 2022 Republication of Proposed Derivatives Rule Modernization, Stage 17 July 13, 2023 Republication of Proposed Amendments Regarding Margin Requirements for Structured Products8 July 20, 2023 Proposed Clarifying Amendments to Registration and Proficiency Requirements August 31, 2023 Rule Consolidation Project – Phase 1 October 20, 2023 6 The following proposed amendments were published a�er the Repor�ng Period:

• On January 11, 2024, CIRO Rules Bulle�n 24-0007 Rule Consolidation Project – Phase 2 was published for comment. The
  public comment period ended on March 11, 2024.
• Also on January 11, 2024, CIRO Rules Bulle�n 24-0003 Proposed Amendments Respecting the Reasonable Expectation to
  Settle a Short Sale was published for a 90-day comment period, ending on April 12, 2024.
• On February 15, 2024, CIRO Rules Bulle�n 24-0067 Proposed Rule Amendments – Fully Paid Securities Lending and
  Financing Arrangements was published for a 60-day comment period, ending on April 15, 2024. 7 Amendments regarding Deriva�ves Rule Moderniza�on, Stage 1 were either not objected to or approved a�er the Repor�ng Period and published on January 18, 2024. 8 Amendments regarding Margin Requirements for Structured Products were either not objected to or approved a�er the Repor�ng Period and published on February 22, 2024.

CSA Staff Notice 25-311 22
QUESTIONS
If you have any questions or comments about this CSA Staff Notice, please contact any of the following:
Jean-Simon Lemieux
Director, Oversight of Trading Activities
Autorité des marchés financiers
514 395-0337, ext. 4366 or
1 877 395-0337, ext. 4366 jean-simon.lemieux@lautorite.qc.ca Michael Brady Coordinator Deputy Director, Capital Markets Regulation British Columbia Securities Commission 604 899-6561 mbrady@bcsc.bc.ca Joseph Della Manna Coordinator Manager, Market Regulation Ontario Securities Commission 416 204-8984 jdellamanna@osc.gov.on.ca Sasha Cekerevac Manager, Market Oversight Alberta Securities Commission 403 297-7764 sasha.cekerevac@asc.ca Michael Brady Coordinator Deputy Director, Capital Markets Regulation British Columbia Securities Commission 604 899-6561 mbrady@bcsc.bc.ca Joseph Della Manna Coordinator Manager, Market Regulation Ontario Securities Commission 416 204-8984 jdellamanna@osc.gov.on.ca Sasha Cekerevac Manager, Market Oversight Alberta Securities Commission 403 297-7764 sasha.cekerevac@asc.ca Jean-Simon Lemieux Director, Oversight of Trading Activities Autorité des marchés financiers 514 395-0337, ext. 4366 or 1 877 395-0337, ext. 4366 jean-simon.lemieux@lautorite.qc.ca Curtis Brezinski Compliance Auditor, Capital Markets, Securities Division Financial and Consumer Affairs Authority of Saskatchewan 306 787-5876 curtis.brezinski@gov.sk.ca Amélie McDonald Legal Counsel Financial and Consumer Services Commission (New Brunswick) 506 635-2938 amelie.mcdonald@fcnb.ca

CSA Staff Notice 25-311 23
Paula White
Deputy Director, Compliance and Oversight
Manitoba Securities Commission
204 945-5195 paula.white@gov.mb.ca
Doug Harris
General Counsel, Director of Market Regulation and Policy and Secretary Nova Scotia Securities Commission 902 424-4106 doug.harris@novascotia.ca Stacey Barker Senior Accountant, Market Regulation Ontario Securities Commission 416 593-2391 sbarker@osc.gov.on.ca