CSA Staff Notice of Approval 25-307: Recognition of New Self-Regulatory Organization of Canada

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CSA Staff Notice of Approval 25-307
Recognition of New Self-Regulatory Organization of Canada November 24, 2022 Effective January 1, 2023, the New Self-Regulatory Organization of Canada (New SRO) is recognized as a self-regulatory organization by the Alberta Securities Commission; the Autorité des marchés financiers; the British Columbia Securities Commission; the Manitoba Securities Commission; the Financial and Consumer Services Commission of New Brunswick; the Office of the Superintendent of Securities, Digital Government and Service Newfoundland and Labrador; the Office of the Superintendent of Securities, Northwest Territories; the Nova Scotia Securities Commission; the Office of the Superintendent of Securities, Nunavut; the Ontario Securities Commission; the Prince Edward Island Office of the Superintendent of Securities; the Financial and Consumer Affairs Authority of Saskatchewan; and the Office of the Yukon Superintendent of Securities (Regulators). Background Following public consultation, the Canadian Securities Administrators (CSA) published the CSA Position Paper 25-404 New Self-Regulatory Organization Framework (Position Paper), describing the plan to establish a new single enhanced SRO that will consolidate the functions of the Investment Industry Regulatory Organization of Canada (IIROC) and the Mutual Fund Dealers Association of Canada (MFDA). The CSA also indicated that it would combine the two current compensation / contingency fund organizations, the Canadian Investor Protection Fund (CIPF) and the MFDA Investor Protection Corporation (MFDA IPC), into a single compensation / contingency fund organization which will be independent from the New SRO. The MFDA and IIROC have been fully supportive of the CSA position and have been working collaboratively under the CSA oversight. On May 12, 2022, the CSA published for comment the CSA Staff Notice and Request for Comment 25-304 Application for Recognition of New SelfRegulatory Organization. In response to the publication, comments from 37 stakeholders were received demonstrating the continued overall support, from both industry stakeholders and investor advocates, for the enhanced regulatory framework outlined in the Position Paper. The summary and response to public comments are provided in Appendix D of this notice. The statutory amalgamation of IIROC and the MFDA in accordance with the Canada Not-forProfit Corporations Act allows IIROC and the MFDA to be combined and continue as one corporation by operation of law. The amalgamated corporation will adopt a temporary legal name “New Self-Regulatory Organization of Canada”, which will be replaced by a new permanent name, to be determined at a later date. The combined compensation / contingency fund organization has been approved or accepted, effective January 1, 2023, by the Regulators and will be named “Canadian Investor Protection Fund”. The Autorité des marchés financiers will publish, prior to the close of the amalgamation, final amendments to put into effect
its transition plan for mutual fund dealers registered in Québec and their registered individuals.

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Transitional Provisions
Certain existing regulations, rules, orders, policies, notices or other instruments in the CSA jurisdictions refer to IIROC or the MFDA or both. Following the amalgamation, such references will be treated and interpreted as references to the New SRO until the appropriate consequential amendments are implemented, as considered necessary. Also, following the amalgamation, the powers and duties of the New SRO with respect to the registration of firms and individuals in each of the CSA jurisdictions and also with respect to inspection in Québec, will remain the same as the current applicable powers and duties of IIROC unless changed by the Regulators subsequent to this notice taking effect. The interim rules of the New SRO (attached as Schedule 2) contain detailed transitional provisions regarding the continued jurisdiction of the New SRO over any persons subject to the current IIROC and MFDA rules. Summary of Notable Changes to the Recognition Order Following the public comment period, some changes, summarized below, were made to the Recognition Order:
• It was clarified in the recitals that no changes to the current delegation of registration
authority to IIROC will result from the amalgamation.
• In response to the comment letters, some clarifying edits were made to the definition of
“Independent Director” to ensure improved objectivity of the test used to determine Director independence.
• The Fees section was updated to ensure that affiliates of investment and mutual fund
dealers are properly captured.
• Several sections were updated to ensure appropriate confidentiality protections of any
information shared with the New SRO by the CSA.
• It was clarified that the CSA continues to maintain separate jurisdiction over the
Members and Approved persons of the New SRO.
• In response to the comment letters, a public interest guiding principle relating to
complaint handling and resolution processes was made more precise.
• Provisions on information sharing requirements were clarified to ensure that such
requirements ensure that the confidential information of market participants and the personal information of investors were sufficiently protected. Contents of the Notice of Approval The Notice of Approval has the following components:
• Appendix A – Recognition Order for the New SRO
• Appendix B – Memorandum of Understanding among the Recognizing Regulators
regarding oversight of the New SRO
• Appendix C – Recognition Application
o Schedule 1 – By-law No. 1 of the New SRO

3 a. Clean b. Blacklined to May 12, 2022 publication o Schedule 2 – Interim Rules of the New SRO
i. Investment Dealer and Partially Consolidated Rules
a. Summary of changes b. Clean
c. Blacklined to May 12, 2022 publication
ii. Investment Dealer Form 1
a. Summary of changes b. Clean
c. Blacklined to existing IIROC Form 1
iii. Mutual Fund Dealer Rules
a. Summary of changes b. Clean
c. Blacklined to May 12, 2022 publication
iv. Mutual Fund Dealer Form 1 (clean only; no changes since May 12,
2022 publication)
v. Universal Market Integrity Rules
a. Clean b. Blacklined to May 12, 2022 publication o Schedule 3 – Interim Fee Model Guidelines Applicable to Investment Dealer Members and Marketplace Members a. Clean b. Blacklined to existing IIROC Fee Model Guidelines o Schedule 4 – Terms of Reference for the New SRO Investor Advisory Panel a. Clean b. Blacklined to May 12, 2022 publication
• Appendix D – Summary of and response to public comments
In addition, IIROC and the MFDA have also published FAQs on the Interim Rules and the Integration Cost Recovery Fee Model Guideline located on the New SRO website.

DÉCISION N° 2022-PDG-0050
Nouvel organisme d'autoréglementation du Canada (Reconnaissance à titre d’organisme d’autoréglementation) Vu la décision n° 2008-PDG-0126 prononcée par l’Autorité des marchés financiers (l’« Autorité ») le 2 mai 2008, telle que révisée par les décisions n° 2018-PDG-0027 et n° 2021-PDG-0010 prononcées par l’Autorité respectivement le 10 avril 2018 et le 10 mars 2021, reconnaissant l’Organisme canadien de réglementation du commerce des valeurs mobilières (l’« OCRCVM ») à titre d’organisme d’autoréglementation au Québec en vertu de l’article 68 de la Loi sur l’encadrement du secteur financier, RLRQ, c. E-6.1 (la « LESF ») (ensemble, les « décisions de l’OCRCVM »); Vu la reconnaissance à titre d’organisme d’autoréglementation de l’Association canadienne des courtiers de fonds mutuels (l'« ACFM ») par l’Alberta Securities Commission, la British Columbia Securities Commission, le Bureau des valeurs mobilières du Nunavut, le Bureau du surintendant des valeurs mobilières (Territoires du Nord-Ouest), le Bureau du Surintendant des valeurs mobilières (Yukon), la Commission des services financiers et des services aux consommateurs (Nouveau-Brunswick), la Commission des valeurs mobilières de l’Ontario, la Commission des valeurs mobilières du Manitoba, la Financial and Consumer Affairs Authority of Saskatchewan, la Nova Scotia Securities Commission et le Superintendent of Securities, Department of Justice and Public Safety (Île-du-Prince-Édouard); Vu les consultations publiques qui ont mené à la publication de l’Énoncé de position 25-404 des ACVM, Nouveau cadre réglementaire des organismes d’autoréglementation décrivant le plan de regrouper l'OCRCVM et l'ACFM en un seul nouvel organisme d'autoréglementation amélioré qui consolidera les fonctions de l’OCRCVM et de l’ACFM afin de fournir un cadre pour une réglementation efficiente et efficace dans l'intérêt public, y compris une structure de gouvernance renforcée, une protection et une éducation accrues des investisseurs et une compétence renforcée du secteur; Vu l’accord intervenu entre l’OCRCVM et l’ACFM à l’effet de consolider leurs activités de réglementation par le biais d’une fusion afin de former le Nouvel organisme d'autoréglementation du Canada (le « nouvel OAR »), laquelle fusion a été approuvée par leurs membres respectifs par un vote à cet effet; Vu les responsabilités qu’assumera le nouvel OAR notamment en matière de réglementation des sociétés inscrites à titre de courtiers en épargne collective et à titre de courtiers en placement ainsi qu’en matière de négociation sur les marchés membres, tels que définis à l’Annexe A de la présente décision (la « décision de reconnaissance »); Vu la période de transition, prévue à l’article 21 de l’Annexe A de la décision de reconnaissance, qui s’appliquera aux sociétés inscrites à titre de courtiers en épargne collective au Québec;

Vu les modifications locales au Règlement 31-103 sur les obligations et dispenses d’inscription et les obligations continues des personnes inscrites, RLRQ, c. V-1.1, r. 10, approuvé par l’Arrêté numéro V-1.1-2022-14 du ministre des Finances en date du 14 novmbre 2022, (2022) 154 G.O. II [(2022] vol. 19, n° 46, B.A.M.F., section 3.2] afin de prévoir l’obligation, pour les sociétés inscrites à titre de courtiers en épargne collective au Québec, d’être membres du nouvel OAR; Vu les fonctions qu’exercera le nouvel OAR en tant que fournisseur de services de réglementation au sens du Règlement 21-101 sur le fonctionnement du marché, RLRQ, c. V-1.1, r. 5 et du Règlement 23-101 sur les règles de négociation, RLRQ, c. V-1.1, r. 6; Vu les autres fonctions qu’exercera le nouvel OAR et qui sont identifiées à l’article 15 de l’Annexe A de la décision de reconnaissance; Vu l’engagement du nouvel OAR à mettre en place une structure de gouvernance robuste qui comportera notamment une majorité d’administrateurs indépendants au sein de son conseil d’administration et de ses comités; Vu l’engagement du nouvel OAR à mettre en place des mécanismes formels de défense des intérêts des investisseurs visant à assurer une participation adéquate des investisseurs à l’élaboration de ses règles et politiques; Vu l’adoption par le nouvel OAR d’un manuel des règles provisoire qui comporte trois sections soit pour 1) les sociétés inscrites à titre de courtiers en placement et les règles partiellement consolidées, 2) les sociétés inscrites à titre de courtiers en épargne collective et 3) les règles universelles d'intégrité du marché, qui reprennent en grande partie les règles de l’OCRCVM et les règles, règlement intérieur et politiques de l’ACFM qui étaient en vigueur immédiatement avant la fusion; Vu l’adoption par le nouvel OAR, selon le cas, des politiques, règlements, formulaires, avis, avis réglementaires, bulletins, directives, orientations et modèles de frais de l'OCRCVM et de l'ACFM qui étaient en vigueur immédiatement avant la fusion; Vu la demande finale de l’OCRCVM et l’ACFM déposée auprès de l’Autorité le 30 septembre 2022 afin que le nouvel OAR soit reconnu à titre d’organisme d’autoréglementation en vertu de l’article 68 de la LESF à la suite de la fusion de l’OCRCVM et l’ACFM en vertu de la Loi canadienne sur les organisations à but non lucratif, L.C. 2009, ch. 23 et que l’OCRCVM soit autorisé à cesser ses activités en vertu de l’article 88 de la LESF (la « demande »); Vu le dépôt d’une demande similaire par l’OCRCVM et l’ACFM auprès de l’Alberta Securities Commission, de la British Columbia Securities Commission, du Bureau des valeurs mobilières du Nunavut , du Bureau du surintendant des valeurs mobilières (Territoires du Nord-Ouest), du Bureau du Surintendant des valeurs mobilières (Yukon), de la Commission des services financiers et des services aux consommateurs (Nouveau-Brunswick), de la Commission des valeurs mobilières de l’Ontario, de la Commission des
valeurs mobilières du Manitoba, de la Financial and Consumer Affairs Authority of Saskatchewan, de la Nova Scotia Securities

Commission, de l’Office of the Superintendent of Securities, Digital Government and Services (Terre-Neuve-et-Labrador) et du Superintendent of Securities, Department of Justice and Public Safety (Île-du-Prince-Édouard) (ensemble, avec l’Autorité, les « autorités de reconnaissance »); Vu la conclusion d’un protocole d’entente sur la surveillance du nouvel OAR (le « protocole d’entente ») entre autorités de reconnaissance, lequel prendra effet le 1er janvier 2023; Vu le regroupement de l’OCRCVM et de l’ACFM par voie de fusion afin de poursuivre leurs activités en tant que nouvel OAR qui entrainera les traitements et interprétations suivants dans les règlements, instructions générales, règles, décisions, politiques, avis ou autres instruments existants dans les territoires des autorités de reconnaissance (les « instruments existants ») :

les mentions de l'OCRCVM et de l'ACFM seront traitées et interprétées comme des
mentions du nouvel OAR jusqu'à ce que les modifications corrélatives appropriées soient mises en œuvre, si cela est jugé nécessaire;
lorsqu'une des dispositions des instruments existants prévoit des obligations ou attribue
des privilèges exclusivement aux sociétés inscrites à titre de courtiers en placement ou à titre de courtiers en épargne collective qui, avant la fusion, étaient membres de l'OCRCVM et de l'ACFM respectivement, ces obligations et privilèges s'appliquent exclusivement aux sociétés inscrites à titre de courtiers en placement ou à titre de courtiers en épargne collective membres du nouvel OAR, selon le cas;
nonobstant toute disposition de la décision de reconnaissance ou tout fait ou événement
découlant de la fusion, les pouvoirs et les obligations du nouvel OAR en matière d'inscription et d’inspection des sociétés et des personnes physiques dans le territoire de chacune des autorités de reconnaissance, y compris en ce qui concerne les catégories d'inscription, seront les mêmes que ceux de l'OCRCVM en la matière immédiatement avant la date de prise d’effet de la décision de reconnaissance, à moins qu'ils ne soient modifiés par une autorité de reconnaissance après cette date; Vu la demande et les déclarations de l’OCRCVM et de l’ACFM à l’effet qu’il est dans l’intérêt public de reconnaître le nouvel OAR à titre d’organisme d’autoréglementation au Québec en vertu de l’article 68 de la LESF; Vu la demande de l’OCRCVM afin que l’Autorité l’autorise à cesser ses activités, en vertu de l’article 88 de la LESF, et qu’elle remplace les décisions de l’OCRCVM par la décision de reconnaissance au moment de la prise d’effet de cette dernière, en vertu de l’article 35.1 de la LESF; Vu les déclarations de l’OCRCVM à l’effet que l’intérêt de ses membres et du public est suffisamment protégé et, en conséquence, qu’il n’est pas nécessaire de maintenir les décisions de l’OCRCVM;Vu la publication de la demande, du projet de décision de reconnaissance et du projet de protocole d’entente pour commentaires au Bulletin de l'Autorité le 12 mai 2022 [(2022) vol. 19, n° 18, B.A.M.F., section 7.1], tel que requis par l’article 66 de la LESF;

Vu l’article 77 de la LESF qui octroie le pouvoir à l’Autorité d’ordonner au nouvel OAR de modifier une disposition ou une pratique, lorsqu’elle juge une modification nécessaire pour rendre cette disposition ou cette pratique conforme aux lois qui sont applicables au nouvel OAR; Vu l’article 80 de la LESF qui octroie le pouvoir à l’Autorité d’ordonner au nouvel OAR la conduite à tenir, lorsqu’elle estime que cette mesure est nécessaire pour assurer le bon fonctionnement du nouvel OAR ou la protection du public; Vu le premier alinéa de l’article 35.1 de la LESF qui permet à l’Autorité, à tout moment, de réviser ses décisions, sauf dans le cas d’une erreur de droit; Vu le deuxième alinéa de l’article 67 de la LESF qui prévoit que l’Autorité exerce sa discrétion en fonction de l’intérêt public lorsqu’elle reconnaît un organisme d’autoréglementation; Vu l’article 88 de la LESF qui prévoit que l’Autorité peut, aux conditions qu’elle détermine, autoriser un organisme d’autoréglementation à cesser son activité si l’Autorité estime que l’intérêt des membres de l’organisme et du public est suffisamment protégé; Vu l’analyse effectuée par la Direction principale de l'encadrement des activités de marché et des dérivés ainsi que la recommandation du surintendant des marchés de valeurs de 1) reconnaître le nouvel OAR afin d’assurer un encadrement efficace du secteur financier au Québec, d’en favoriser le développement et le bon fonctionnement ainsi que de protéger le public et
2) d'autoriser la cessation des activités de l’OCRCVM du fait que l'intérêt des membres de
l'OCRCVM et du public est suffisamment protégé; En conséquence :

L’Autorité reconnaît le nouvel OAR à titre d’organisme d’autoréglementation aux
termes de l’article 68 de la LESF, aux conditions énoncées à l’Annexe A de la présente décision de reconnaissance et des modalités applicables du protocole d’entente.
L’Autorité autorise, aux termes de l’article 88 de la LESF, l’OCRCVM à cesser ses
activités à titre d’organisme d’autoréglementation et en conséquence révoque, en vertu l’article 35.1 de la LESF, les décisions n° 2008-PDG-0126, n° 2018-PDG-0027 et n° 2021-PDG-0010. La présente décision prend effet le 1er janvier 2023. Fait le 14 novembre 2022. Louis Morisset Président-directeur général

ANNEXE A
CONDITIONS
Définitions

Dispositions générales
À moins d’indication contraire dans la présente décision de reconnaissance, les expressions utilisées aux présentes qui sont définies au paragraphe 3 de l’article 1.1 du Règlement 14-101 sur les définitions, RLRQ, c. V-1.1, r. 3 s’entendent au sens de cette disposition. Dans la présente décision de reconnaissance, on entend par :
« administrateur » : un membre du conseil;
« autorités de reconnaissance » : l’Alberta Securities Commission, l’Autorité des marchés financiers, la British Columbia Securities Commission, l’Office of the Superintendent of Securities de l’Île-du-Prince-Édouard, la Commission des valeurs mobilières du Manitoba, la Commission des services financiers et des services aux consommateurs du Nouveau-Brunswick, la Nova Scotia Securities Commission, le Bureau du surintendant des valeurs mobilières du Nunavut, la Commission des valeurs mobilières de l’Ontario, la Financial and Consumer Affairs Authority of Saskatchewan, l’Office of the Superintendent of Securities, Digital Government and Services, Terre-Neuve-et-Labrador, le Bureau du surintendant des valeurs mobilières des Territoires du Nord-Ouest, et le Bureau du surintendant des valeurs mobilières du Yukon; « conseil » : le conseil d’administration du nouvel OAR; « conseil régional » : un conseil régional au sens des règlements du nouvel OAR; « courtier membre » : un membre du nouvel OAR qui est inscrit à titre de courtier en placement ou de courtier en épargne collective conformément à la législation en valeurs mobilières; « liens » : la relation entre une personne et les personnes suivantes :
a) une personne morale dans laquelle, directement ou indirectement, elle a la propriété véritable de titres lui assurant plus de 10 % des droits de vote attachés à l’ensemble des titres comportant droit de vote de la personne morale qui sont en circulation; b) son associé; c) une fiducie ou une succession dans laquelle elle a un droit appréciable de la nature de ceux du propriétaire ou à l’égard de laquelle elle remplit les fonctions de fiduciaire ou des fonctions analogues;

d) un parent de celle-ci qui partage sa résidence; e) une personne qui partage sa résidence et avec laquelle elle est mariée ou conjoint de fait; f) un parent d’une personne visée au paragraphe e qui partage sa résidence; « marché » : les entités suivantes :
a) une bourse reconnue ou un marché à terme de marchandises inscrit dans un territoire du Canada; b) un système reconnu de cotation et de déclaration d’opérations; c) une personne physique ou morale qui n’est visée ni au paragraphe a ni au paragraphe b, qui facilite des opérations sur titres ou sur dérivés dans un territoire du Canada et qui remplit les conditions suivantes :
i) elle établit, tient ou offre un marché ou un mécanisme permettant aux acheteurs et aux vendeurs de titres ou de dérivés de se rencontrer; ii) elle réunit les ordres de nombreux acheteurs et vendeurs de titres ou de dérivés; iii) elle utilise des méthodes éprouvées, non discrétionnaires, selon lesquelles les ordres interagissent, et les acheteurs et les vendeurs qui passent des ordres s’entendent sur les conditions d’une opération; « marché membre » : un membre qui est un marché; « membre » : un membre du nouvel OAR, notamment les courtiers membres et les marchés membres; « membre de la famille immédiate » : un membre de la famille immédiate au sens de l’article 1.1 du Règlement 52-110 sur le comité d’audit, RLRQ, c. V-1.1, r. 28; « membre de la haute direction » : un membre de la haute direction au sens de l’article 1.1 du Règlement 52-110 sur le comité d’audit; « membre du même groupe » : un membre du même groupe au sens du paragraphe 1 de l’article 1.3 du Règlement 52-110 sur le comité d’audit; « Organisation » : le nouvel OAR, toute société qu’elle a remplacée et tout membre du même groupe; « personne autorisée » : une personne autorisée au sens des Règles du nouvel OAR;

« procédure disciplinaire » : une procédure entreprise par le nouvel OAR aux fins de mise en application, notamment une audience disciplinaire et une audience de règlement; « protocole d’entente visant le nouvel OAR » : le protocole d’entente sur la surveillance du nouvel OAR; « région » : une région au sens des règlements du nouvel OAR; « Règle » : toute règle, toute politique, tout formulaire, tout barème de droits ou tout autre texte semblable du nouvel OAR; « sanctions pécuniaires » : les amendes ou tous les autres montants pécuniaires, dont les remises de sommes, imposés à la suite d’une procédure disciplinaire ou de toute autre mesure prise par le nouvel OAR, ou qui en découle; en sont exclus les frais des procédures disciplinaires; « section » : une section au sens des règlements du nouvel OAR. Définition de l’expression « administrateur indépendant »
2. 1) L’expression « administrateur indépendant » s’entend d’un administrateur qui n’a
pas de relation importante, directe ou indirecte, avec l’Organisation ou un membre.
2) Pour l’application du paragraphe 1, une « relation importante » s’entend d’une
relation qui, eu égard à toutes les circonstances pertinentes, pourrait nuire à l’exercice du jugement indépendant d’un administrateur ou être raisonnablement perçue comme lui nuisant.
3) Malgré le paragraphe 1, les personnes physiques suivantes sont considérées
comme ayant une relation importante avec l’Organisation ou un membre :
a) une personne physique qui est ou a été au cours des trois dernières années salarié ou membre de la haute direction de l’Organisation; b) une personne physique dont un membre de la famille immédiate est ou a été au cours des trois dernières années membre de la haute direction ou administrateur non indépendant de l’Organisation; c) une personne physique qui est ou a été, ou dont un membre de la famille immédiate est ou a été, membre de la haute direction d’une entité au cours des trois dernières années, si l’un des membres de la haute direction actuels de l’Organisation fait partie ou a fait partie durant cette période du comité de rémunération de l’entité; d) une personne physique qui a reçu, ou dont un membre de la famille immédiate de celui-ci agissant à titre de membre de la haute direction de l’Organisation a reçu, plus de 75 000 $ comme rémunération directe de

l’Organisation sur une période de 12 mois au cours des trois dernières années; e) une personne physique qui est ou a été au cours des trois dernières années associé, administrateur, dirigeant, salarié ou une personne exerçant des fonctions analogues à l’égard de l’une des entités suivantes :
i) un membre; ii) une personne qui a des liens avec un membre; iii) un membre du même groupe qu’un membre; f) une personne physique qui a ou a eu au cours des trois dernières années des liens avec un associé, un administrateur, un dirigeant, un salarié ou une personne exerçant des fonctions analogues à l’égard d’un membre.
4) Pour l’application du sous-paragraphe d du paragraphe 3, la rémunération directe
ne comprend pas les éléments suivants :
a) la rémunération gagnée à titre de membre du conseil de l’Organisation ou d’un comité du conseil; b) la réception de montants fixes à titre de rémunération dans le cadre d’un plan de retraite, y compris les rémunérations différées, pour des services antérieurs auprès de l’Organisation, si la rémunération n’est subordonnée d’aucune façon à la continuation des services.
5) Malgré le paragraphe 3, une personne physique n’est généralement pas
considérée comme ayant une relation importante avec l’Organisation uniquement pour les motifs suivants :
a) elle ou un membre de la famille immédiate de celle-ci a rempli antérieurement les fonctions de chef de la direction par intérim; b) elle ou un membre de la famille immédiate de celle-ci remplit ou a rempli antérieurement à temps partiel les fonctions de président ou de vice-président du conseil ou d’un comité du conseil de l’Organisation.
6) Malgré la période d’attente de trois ans prévue aux sous-paragraphes e et f du
paragraphe 3, si la relation entre une personne physique et un membre, les personnes ayant des liens avec lui ou les membres du même groupe que lui est d’une nature ou d’une durée dont on pourrait raisonnablement s’attendre à ce qu’elle entrave l’exercice du jugement indépendant de cette personne physique, il doit s’écouler une période d’attente plus longue à l’égard du membre, des personnes ayant des liens et des membres du même groupe avant qu’elle puisse être considérée comme un administrateur indépendant.

7) Malgré les paragraphes 2 à 6, est considérée comme ayant une relation
importante avec l’Organisation la personne physique qui remplit l’une des conditions suivantes :
a) elle accepte, directement ou indirectement, des honoraires de consultation, de conseil ou d’autres honoraires de l’Organisation ou d’une filiale de celle-ci, à l’exception de la rémunération reçue à titre de membre du conseil ou d’un comité du conseil, ou à titre de président ou de vice-président à temps partiel du conseil ou d’un comité du conseil; b) elle est membre du même groupe que l’Organisation ou que l’une de ses filiales.
8) Pour l’application du paragraphe 7, l’acceptation indirecte par une personne
physique d’honoraires de consultation, de conseil ou d’autres honoraires comprend l’acceptation d’une rémunération :
a) par son conjoint, son enfant mineur ou l’enfant mineur de son conjoint, ou encore par son enfant ou l’enfant de son conjoint qui partage sa résidence, qu’il soit mineur ou non; b) par une entité qui fournit des services comptables, de consultation, juridiques, de financement ou de conseil financier à l’Organisation ou à une filiale de celle-ci et dont elle est associé, membre, dirigeant, par exemple un directeur général occupant un poste comparable, ou encore membre de la haute direction, à l’exception des commanditaires, des associés non directeurs et des personnes qui occupent des postes analogues, pour autant que, dans chaque cas, ils n’aient pas de rôle actif dans la prestation de services à l’entité.
9) Pour l’application du paragraphe 7, les honoraires ne comprennent pas la
réception de montants fixes à titre de rémunération dans le cadre d’un plan de retraite, y compris les rémunérations différées, pour des services antérieurs auprès de l’Organisation, si la rémunération n’est subordonnée d’aucune façon à la continuation des services.

Critères de reconnaissance
3. Le nouvel OAR doit continuer de respecter les critères énoncés dans l’Appendice 1
ci-joint.
Intérêt public
4. 1) Le nouvel OAR agit dans l’intérêt public. Dans l’accomplissement de son mandat
d’intérêt public, il a les obligations suivantes :
a) il établit ce mandat dans ses documents constitutifs et le fait connaître à ses parties prenantes, et au public en général; b) il prend les mesures raisonnables pour veiller à ce que ses administrateurs, les membres des comités de son conseil, sa haute direction et son personnel reçoivent une formation appropriée pour interpréter ce mandat; c) il veille à ce que la structure de rémunération des membres de la haute direction et des hauts dirigeants soit suffisamment liée à l’accomplissement effectif de son mandat. Approbation des changements
5. 1) L’approbation préalable de l’Autorité est requise afin d’apporter un changement
aux éléments qui suivent :
a) la structure de gouvernance du nouvel OAR; b) les statuts de fusion du nouvel OAR; c) les règles écrites du conseil et de chacun de ses comités; d) la cession, le transfert, la délégation ou la sous-traitance de l’exécution de la totalité ou d’une partie importante de ses fonctions de réglementation ou de ses responsabilités en cette matière à titre d’organisme d’autoréglementation.
2) L’approbation préalable de l’Autorité est requise afin d’apporter un changement
important aux éléments qui suivent :
a) le barème de droits; b) les fonctions dont s’acquitte le nouvel OAR; c) la structure organisationnelle du nouvel OAR, dont l’emplacement de ses bureaux ou du personnel responsable de la réglementation; d) les activités, les responsabilités et les pouvoirs des conseils régionaux;

e) les régions et les sections du nouvel OAR; f) toute entente de services de réglementation conclue par le nouvel OAR. Non-opposition aux changements
6. 1) La non-opposition préalable de l’Autorité, visée à l’Annexe A du protocole
d’entente visant le nouvel OAR, est requise pour les éléments suivants :
a) la sélection de chaque candidat au poste d’administrateur indépendant; b) la nomination du chef de la direction; c) la modification des grilles de compétences du conseil; d) la modification de la sous-grille de compétences du chef de la direction; e) l’approbation d’une dispense par le conseil à l’égard d’une Règle qui pourrait avoir une incidence importante sur les éléments suivants, ou la modification ou la prolongation d’une telle dispense :
i) des membres et d’autres personnes sous la compétence du nouvel OAR; ii) les marchés des capitaux en général, notamment des intervenants ou des secteurs en particulier. Supervision par l’Autorité
7. 1) Le nouvel OAR sollicite l’avis de l’Autorité avant de finaliser ses plans stratégiques
et d’affaires, les présentations annuelles de ses priorités ainsi que ses budgets.
2) Le nouvel OAR collabore et apporte son concours à tout examen de ses fonctions
par l’Autorité ou un tiers indépendant agissant sur directive de celle-ci.
3) L’Autorité détermine la portée de l’examen mené par le tiers indépendant visé au
paragraphe 2, ainsi que la ou les personnes qui l’entreprendront. Cet examen est effectué aux frais du nouvel OAR, qui doit rembourser l’Autorité de ses dépenses, s’il y a lieu. Statut
8. 1) Le nouvel OAR est sans but lucratif.
2) Le nouvel OAR respecte les conditions pouvant être imposées par l’Autorité dans
l’intérêt public à l’égard de toute opération en conséquence de laquelle :
a) il cesserait d’exercer ses fonctions;

b) il abandonnerait, interromprait ou liquiderait la totalité ou une partie importante de ses activités; c) il aliénerait la totalité ou la quasi-totalité de ses actifs; d) il mettrait fin à l’entente avec un fournisseur de services de technologie de l’information pour ses systèmes essentiels. Règles et processus de réglementation
9. Le nouvel OAR observe la marche à suivre indiquée à l’Annexe C du protocole d’entente
visant le nouvel OAR, ainsi que ses modifications, pour modifier, révoquer ou suspendre les Règles et les règlements existants ou pour en introduire de nouveaux. Il examine et explique clairement les motifs pour lesquels tout projet qu’il souhaite publier pour consultation est dans l’intérêt public. Gouvernance
10. 1) Conseil
Le nouvel OAR veille à ce qui suit :
a) la taille du conseil est d’au plus 15 administrateurs; b) les postes de chef de la direction et de président du conseil sont occupés par des personnes différentes; c) la majorité du conseil est constituée d’administrateurs indépendants, dont le président; d) la durée des mandats des administrateurs est appropriée; e) il élabore, maintient et applique des politiques de diversité et d’inclusion.
2) Comités du conseil
Le nouvel OAR veille à ce qui suit :
a) le comité de gouvernance du conseil est entièrement composé d’administrateurs indépendants; b) les autres comités du conseil sont composés à majorité d’administrateurs indépendants; c) les présidents de tous les comités du conseil sont des administrateurs indépendants.

3) Conseils régionaux
Le nouvel OAR établit, conformément à ses règlements, des conseils régionaux qui jouent auprès de lui un rôle consultatif afin d’offrir une perspective régionale sur les questions nationales ou autres. Il leur alloue suffisamment de ressources pour qu’ils s’acquittent adéquatement de leurs responsabilités. Les conseils régionaux font rapport au conseil au moins une fois par année. Droits
11. Le nouvel OAR élabore un barème de droits intégré qui doit être approuvé par l’Autorité.
Dans l’intervalle, il doit obtenir son autorisation pour toute augmentation des droits prélevés auprès des courtiers membres qui ne sont pas inscrits à la fois comme courtiers en placement et comme courtiers en épargne collective ou comme courtiers en placement et courtiers en épargne collective du même groupe, si cette augmentation est liée aux coûts de création du nouvel OAR. Mobilisation et protection des investisseurs
12. 1) Le nouvel OAR crée des mécanismes pour sensibiliser les investisseurs et
interagir officiellement avec eux, notamment afin d’obtenir des commentaires sur la conception et la mise en œuvre de projets de Règles applicables. En particulier, il prend les mesures suivantes :
a) il établit un comité consultatif d’investisseurs chargé de réaliser des recherches indépendantes ou de formuler des commentaires sur des questions d’ordre réglementaire ou d’intérêt public; le conseil rencontre le comité consultatif d’investisseurs au moins une fois par année, et les membres de la haute direction le rencontrent également; b) il crée, en son sein, un bureau des investisseurs distinct qui soutient l’élaboration de Règles et offre aux investisseurs des activités de sensibilisation et à vocation pédagogique; le bureau des investisseurs est mis en évidence, et il est facilement reconnaissable et accessible pour les investisseurs; c) il veille à ce que ses comités consultatifs concernés incluent une proportion raisonnable de représentants des investisseurs; d) il maintient un programme de dénonciation. Traitement équitable
13. Sous réserve des lois applicables ainsi que des Règles et des règlements du nouvel OAR,
avant de rendre une décision ayant une incidence sur les droits d’une personne physique ou morale en matière d’adhésion, d’inscription ou d’affaires disciplinaires, le nouvel OAR donne à la personne visée la possibilité d’être entendue.

Tenue des dossiers
14. 1) Le nouvel OAR tient des dossiers sur toutes les questions subordonnées à son
approbation en vertu de ses Règles et de ses règlements, et les conserve pendant une période appropriée conformément aux normes légales et sectorielles en la matière, notamment sur les éléments suivants :
a) toutes les demandes d’adhésion acceptées, en précisant les personnes concernées et le fondement de sa décision; b) toutes les demandes d’adhésion refusées ou les conditions imposées à l’adhésion, en précisant le fondement de sa décision. Exécution des fonctions du nouvel OAR
15. 1) Le nouvel OAR établit des Règles régissant ses courtiers membres et les autres
personnes relevant de sa compétence, de même que les opérations qu’ils effectuent sur les marchés membres.
2) Le nouvel OAR administre les Règles applicables, veille à leur observation et à
celle de la législation canadienne en valeurs mobilières applicable par les membres et les autres personnes sous sa compétence, et fait appliquer ces Règles à l’égard des courtiers membres, y compris les systèmes de négociation parallèles, et des autres personnes sous sa compétence.
3) À titre de fournisseur de services de réglementation, le nouvel OAR administre les
règles, veille à leur observation et les fait appliquer conformément à une entente de services de réglementation.
4) Par l’intermédiaire de ses administrateurs, dirigeants et salariés, le nouvel OAR
est responsable de toutes les questions d’adhésion, tout en tenant compte des enjeux régionaux soulevés par les conseils régionaux à titre consultatif.
5) Sous réserve de la législation applicable, le nouvel OAR prend les mesures
suivantes :
a) il ne recueille, n’utilise et ne communique des renseignements personnels que dans la mesure raisonnablement nécessaire pour exercer ses fonctions de réglementation et s’acquitter de son mandat; b) il protège les renseignements personnels et l’information commerciale confidentielle dont il a la garde ou le contrôle.
6) Le nouvel OAR adopte des politiques et des procédures qui visent à préserver la
confidentialité et à empêcher la divulgation de l’information confidentielle, notamment les renseignements personnels, concernant ses activités ou celles de

l’Autorité, d’un courtier membre, d’un marché membre ou d’un participant au marché, et fait tous les efforts raisonnables afin de les respecter.
7) Le nouvel OAR est ouvert aux communications avec le public concernant
l’exécution de ses fonctions à titre d’organisme d’autoréglementation.
8) Le nouvel OAR élabore et rend publics des processus de traitement des plaintes
faites à son endroit, dont des procédures de transfert aux échelons supérieurs.
9) Le nouvel OAR publie simultanément en français et en anglais chacun des
documents destinés au public ou à toute catégorie de membres.
10) Le nouvel OAR effectue au moins annuellement une autoévaluation de sa capacité
à s’acquitter de ses fonctions et remet à son conseil un rapport accompagné de recommandations d’améliorations, s’il y a lieu.
11) Le nouvel OAR transmet à l’Autorité les données, renseignements et dossiers
concernant l’activité sur un marché, notamment afin de faciliter la détection et l’analyse efficientes des abus de marché et d’affiner la compréhension des marchés des capitaux et des structures des marchés au Canada.
12) Les mesures prises par le nouvel OAR pour administrer et faire appliquer les
Règles ainsi que veiller à leur observation et à celle de la législation en valeurs mobilières n’empêchent pas l’Autorité de prendre quelque mesure que ce soit en vertu de la législation en valeurs mobilières. Sanctions pécuniaires
16. 1) Toutes les sanctions pécuniaires perçues par le nouvel OAR ne peuvent être
affectées, directement ou indirectement, qu’aux fins suivantes dans l’intérêt public :
a) avec l’approbation du comité de gouvernance :
i) au développement de systèmes ou à d’autres dépenses connexes qui sont nécessaires pour régler de nouvelles questions de réglementation et qui sont directement liés à la protection des investisseurs ou à l’intégrité des marchés des capitaux, dans la mesure où il ne s’agit pas de frais de fonctionnement engagés dans le cours normal des activités; ii) à des projets de formation et de recherche qui sont directement reliés au secteur des placements, et qui sont à l’avantage du public ou des marchés des capitaux;

iii) au financement spécifique d’un programme de dénonciation, dans la mesure où il ne s’agit pas de frais de fonctionnement engagés dans le cours normal des activités; iv) aux versements faits à un organisme exonéré d’impôt, sans but lucratif, qui a notamment pour mission de protéger les investisseurs ou d’exercer les activités mentionnées à l’alinéa ii du sous-paragraphe a; v) à toute autre fin pouvant être approuvée ultérieurement par l’Autorité; b) aux frais raisonnables liés à l’administration du bureau des investisseurs du nouvel OAR, du comité consultatif d’investisseurs et des audiences du nouvel OAR.
2) Le processus de répartition des sanctions pécuniaires est équitable et transparent.
Avis public de procédures disciplinaires
17. 1) Sous réserve du paragraphe 2 et des lois applicables, le nouvel OAR :
a) communique rapidement au public et aux médias d’information :
i) le détail de chaque procédure disciplinaire engagée par le nouvel OAR; ii) l’arrêt de chaque procédure disciplinaire, y compris les motifs; b) s’assure que les procédures disciplinaires sont ouvertes au public et aux médias d’information.
2) Malgré le paragraphe 1, le nouvel OAR peut, de son propre chef ou sur demande
d’une partie à une procédure disciplinaire, ou conformément à ses Règles, tenir un huis clos ou interdire la publication ou la diffusion d’information ou de documents s’il juge que cela est nécessaire pour protéger la confidentialité de certaines questions. Il établit par écrit les critères lui permettant de prendre la décision concernant la confidentialité. Capacité et intégrité des systèmes
18. 1) Le nouvel OAR :
a) veille à ce que chacun de ses systèmes technologiques essentiels :
i) comporte des contrôles internes adéquats pour assurer l’intégrité et la sécurité de l’information et des données;

ii) dispose de capacités et de moyens de sauvegarde raisonnables et suffisants pour lui permettre d’exercer adéquatement ses activités; b) maintient des contrôles permettant de gérer les risques associés à ses activités, dont un examen annuel de ses plans de secours et de continuité des activités.
2) Le nouvel OAR, à une fréquence raisonnable et au moins une fois l’an, fait
exécuter un examen indépendant des contrôles et des capacités visés au paragraphe 1 conformément aux procédures et aux normes d’audit établies. Le conseil passe en revue le rapport contenant les recommandations et les conclusions de l’examen indépendant. À une fréquence raisonnable et au moins une fois l’an, le nouvel OAR prend également les mesures suivantes, qui peuvent être intégrées à l’exécution de l’examen indépendant :
a) procéder à des estimations raisonnables de la capacité actuelle et future de ses systèmes technologiques essentiels; b) effectuer des simulations de crise pour déterminer la capacité de traitement de ces systèmes d’exécuter leurs fonctions de manière exacte, rapide et efficiente; c) réviser et garder à jour le développement et la méthodologie de mise à l’essai de ces systèmes; d) examiner la vulnérabilité de ces systèmes aux menaces internes et externes, y compris les cyberattaques, les risques matériels ou les catastrophes naturelles.
3) Les modalités prévues au paragraphe 2 ne s’appliquent pas dans les cas
suivants :
a) le fournisseur de services de technologie de l’information retenu par le nouvel OAR est tenu, par la loi ou autrement, de procéder annuellement à un examen indépendant; b) le conseil du nouvel OAR obtient et examine tous les ans une copie du rapport d’examen indépendant de son fournisseur de services de technologie de l’information pour veiller à ce qu’il soit doté de contrôles lui permettant de s’acquitter des tâches énumérées aux paragraphes 1 et 2.
4) Périodiquement ou à la demande de l’Autorité, le nouvel OAR compare le
rendement des systèmes et des services de surveillance fournis par ses fournisseurs de services de technologie de l’information à celui de systèmes et de services comparables offerts par d’autres fournisseurs de services de technologie de l’information.

Capacité et intégrité du système de suivi de la formation continue
19. 1) Le nouvel OAR veille à ce que son système de suivi de la formation continue :
a) comporte des contrôles internes adéquats pour assurer l’intégrité et la sécurité de l’information; b) dispose de capacités et de moyens de sauvegarde raisonnables et suffisants pour lui permettre d’exercer adéquatement ses activités.
2) Le nouvel OAR, à une fréquence raisonnable et au moins une fois tous les deux
ans, fait rédiger par une partie compétente un rapport conforme aux normes d’audit établies, et contenant le détail d’un examen visant à s’assurer que le système de suivi de la formation continue comporte un système adéquat de contrôles internes, et notamment qu’il est intégré à ses plans de continuité des activités et de reprise après sinistre.
3) Avant de confier la mission de rédiger le rapport visé au paragraphe 2, le nouvel
OAR discute avec l’Autorité du choix de la partie compétente ainsi que de la portée de l’examen. Obligations d’information continue
20. 1) Le nouvel OAR se conforme aux obligations prévues à l’Appendice 2 de la
présente décision de reconnaissance, dans sa version modifiée, s’il y a lieu, par l’Autorité.
2) Le nouvel OAR fournit à l’Autorité les autres rapports, documents, renseignements
et données que celle-ci ou son personnel lui demande, dans un format et selon un mode qu’elle estime acceptables. Exigences pour le Québec
21. 1) Le nouvel OAR maintient une section du Québec ayant des responsabilités
clairement définies en matière de réglementation, d’adhésion, de conformité des ventes, de conformité financière, de surveillance des marchés, d’inspection des pupitres de négociation et d’application des Règles à l’égard de ses courtiers membres, de ses marchés membres et des personnes autorisées.
2) La section du Québec maintient une place d’affaires au Québec et toute décision
concernant la supervision de ses activités d’autoréglementation et les courtiers membres, marchés membres et personnes autorisées du Québec est principalement prise par des personnes résidant au Québec.
3) Le plus haut dirigeant responsable de la section du Québec relève directement du
chef de la direction du nouvel OAR.

4) La section du Québec offre tous les services nécessaires en français à ses
membres et aux investisseurs dans le cadre d’une prestation de qualité équivalente à ceux qui sont offerts en anglais dans les autres bureaux du nouvel OAR.
5) La section du Québec veille à ce que le français soit la langue utilisée dans toutes
les communications et correspondances avec l’Autorité.
6) Le nouvel OAR obtient l’approbation préalable de l’Autorité avant d’effectuer tout
changement à la structure organisationnelle et administrative de la section du Québec qui aurait une incidence sur ses fonctions et activités au Québec et à l’exercice du pouvoir de prendre des décisions, notamment en ce qui a trait aux ressources financières, humaines et matérielles imparties à la section du Québec.
7) La section du Québec dispose d’un budget distinct qui doit être approuvé par le
conseil. Ce dernier alloue à la section du Québec les ressources et le soutien nécessaires à la réalisation de ses fonctions, pouvoirs et activités, notamment en ce qui a trait au support matériel, informationnel, financier et aux ressources humaines.
8) La section du Québec rend compte à l’Autorité, semestriellement, de son effectif,
par fonction, en précisant les postes autorisés, comblés et vacants et de toute réduction ou tout changement important de cet effectif, par fonction.
9) La section du Québec rend compte à l’Autorité, sur demande, par l’entremise de
son plus haut dirigeant responsable au Québec, de la façon dont elle exerce ses fonctions et pouvoirs et réalise ses activités.
10) Le nouvel OAR reconnaît que l’Autorité, conformément à la LESF, la Loi sur les
instruments dérivés, RLRQ, c. I-14.01 (la « LID ») et la Loi sur les valeurs mobilières, RLRQ, c. V-1.1 (la « LVM »), met en place un encadrement particulier pour le traitement des plaintes et le règlement des différends (le « régime de la LID/LVM »). Le nouvel OAR reconnaît que le régime de traitement des plaintes et des différends énoncé dans ses Règles ou dans tout autre document n’a pas pour effet de limiter l’application du régime de la LID/LVM. Le nouvel OAR s’engage à respecter et à promouvoir le régime de la LID/LVM, y compris les modalités et les délais prévus à la LID et à la LVM, et à collaborer pleinement dans le cadre de son administration.
11) Advenant une incompatibilité ou une divergence entre le régime de la LID/LVM et
celui du nouvel OAR, le régime de la LID/LVM prévaut.
12) Il est expressément entendu que la coexistence du régime de la LID/LVM et celui
du nouvel OAR prévue au paragraphe 10 ci-dessus ne constitue pas, directement ou indirectement, une entente relative à l’examen des plaintes des personnes insatisfaites de leur examen ou du résultat de cet examen ou encore à la médiation entre les parties intéressées selon l’article 33.1 de la LESF.

13) Le nouvel OAR reconnaît le droit applicable au Québec et s’engage à le respecter.
14) Le nouvel OAR prévoit que les sociétés inscrites à titre de courtier en épargne
collective au Québec (« CEC au Québec ») bénéficient d’une période de transition adéquate, et dont la durée est convenue avec l’Autorité, en ce qui concerne leur intégration au nouvel OAR, pour leurs activités au Québec.
15) Pendant la période de transition, le nouvel OAR, pour les activités exercées par
les CEC au Québec :
a) prévoit que ses règlements, Règles, décisions, avis ou autres instruments ne s’appliquent pas aux CEC au Québec, à l’exception des dispositions requises afin d’assurer le bon fonctionnement du nouvel OAR, ainsi que la mise en œuvre des exigences prévues au paragraphe 14 et aux sous-paragraphes b et c du présent paragraphe; b) autorise les CEC au Québec à participer à titre de membre aux consultations du nouvel OAR et aux comités constitués par celui-ci; c) prévoit que des droits réduits, dont le montant est proportionnel aux services qui leur sont offerts, sont payables par les CEC au Québec au nouvel OAR.
16) Le nouvel OAR obtient l’approbation préalable de l’Autorité avant d’effectuer tout
changement à ses règlements, Règles, décisions, avis ou autres instruments à l’égard des éléments visés par les exigences prévues aux paragraphes 14 et 15, visant à mettre fin ou à modifier les conditions applicables à la période transitoire ou avant d’effectuer une action qui aurait pour effet d’obliger les CEC au Québec à adhérer au fonds de garantie du nouvel OAR pour ses activités au Québec.

APPENDICE 1
CRITÈRES DE RECONNAISSANCE
Intérêt public comme principe directeur

1. Le nouvel OAR agit dans l’intérêt public en faisant notamment ce qui suit :
  a) protéger les investisseurs contre les pratiques déloyales, abusives ou frauduleuses de ses membres; b) favoriser l’équité, l’efficience et l’intégrité des marchés des capitaux; c) stimuler la confiance du public dans les marchés des capitaux; d) favoriser la sensibilisation des investisseurs; e) administrer un programme de formation continue qui soit équitable, cohérent et équilibré pour l’ensemble des courtiers membres et des personnes autorisées concernées; f) valoriser l’innovation et assurer la flexibilité et l’adaptation aux besoins futurs des marchés des capitaux en évolution, sans compromettre la protection des investisseurs; g) surveiller les marchés de façon efficace; h) favoriser une collaboration et une coordination efficientes et efficaces avec les autorités de reconnaissance afin d’assurer une harmonisation réglementaire; i) favoriser l’accès des investisseurs de groupes démographiques différents à des conseils et à des produits; j) reconnaître et intégrer les considérations et les intérêts régionaux à l’échelle du Canada; k) assurer une consultation et une écoute attentives de tous les types de membres et veiller à ce que les perspectives des investisseurs soient prises en compte dans l’élaboration et la mise en œuvre des politiques réglementaires; l) administrer des processus rigoureux de conformité et de mise en application; m) veiller à ce que ses processus de traitement et de résolution des plaintes et les exigences de traitement des plaintes qu’il impose à ses membres soient accessibles aux plaignants et leur fournissent des indications faciles

à comprendre, et à ce qu’ils permettent de traiter les plaintes de manière juste et efficiente; n) contribuer à la stabilité financière, sous la direction des autorités de reconnaissance; o) assurer une gouvernance et une responsabilité effectives envers toutes les parties prenantes tout en évitant la capture réglementaire. Gouvernance
2. 1) La structure et les ententes en matière de gouvernance sont transparentes et
garantissent ce qui suit :
a) la surveillance efficace du nouvel OAR; b) une représentation juste, significative et diversifiée au sein du conseil et de ses comités; c) l’atteinte d’un juste équilibre entre les intérêts des diverses personnes physiques et morales et des divers modèles d’entreprise assujettis à la réglementation du nouvel OAR; d) une proportion raisonnable d’administrateurs du nouvel OAR avec une expérience pertinente en matière de protection des investisseurs; e) une représentation géographique équilibrée au sein du conseil; f) des emplacements appropriés pour les membres de la haute direction; g) le fait que chaque administrateur ou membre de la haute direction a les qualités requises; h) le fait que les administrateurs, les dirigeants et les salariés du nouvel OAR font l’objet de dispositions appropriées en matière de rémunération, de conflits d’intérêts, de limites de responsabilité, d’indemnisation et de qualification. Conflits d’intérêts
3. Sous réserve de la législation applicable, le nouvel OAR relève et évite les conflits réels,
potentiels ou perçus entre ses propres intérêts, ou ceux de ses administrateurs, dirigeants ou salariés, et l’intérêt public.

Droits
4. 1) Tous les droits prélevés par le nouvel OAR sont répartis équitablement et
proportionnés aux activités exercées par les membres. Les droits ne doivent pas avoir pour effet de créer des obstacles déraisonnables à l’accès.
2) La procédure d’établissement des droits est équitable et transparente.
3) Le nouvel OAR exerce ses activités selon le principe du recouvrement des coûts.
Fonds de garantie
5. Le nouvel OAR se conforme à tout accord conclu avec le Fonds canadien de protection
des investisseurs (« FCPI »).
Accès
6. 1) Le nouvel OAR énonce par écrit les critères raisonnables qui permettent à toutes
les personnes physiques ou morales qui y satisfont d’accéder à ses services de réglementation.
2) Les critères régissant l’accès et la marche à suivre pour l’obtenir sont équitables
et transparents.
Viabilité financière
7. Le nouvel OAR dispose des ressources financières suffisantes pour bien exercer ses
fonctions et s’acquitter de ses responsabilités.
Capacité de remplir ses fonctions
8. 1) Le nouvel OAR maintient sa capacité de remplir ses fonctions avec efficacité et
efficience, notamment la régie de la conduite des personnes physiques ou morales assujetties à sa réglementation ainsi que la surveillance et l’application des obligations.
2) Dans chaque territoire où il a des bureaux, afin de remplir ses fonctions et
responsabilités avec efficience, équité et efficacité et au moment opportun, le nouvel OAR dispose :
a) des ressources suffisantes, notamment financières, technologiques et humaines; b) des structures organisationnelles appropriées.
3) Dans le cadre de l’exercice de ses fonctions, le nouvel OAR tient compte du point
de vue et des processus de l’Autorité.

Capacité et intégrité des systèmes
9. Le nouvel OAR élabore, met en œuvre et maintient des contrôles adéquats pour assurer
la capacité, l’intégrité et la sécurité de ses systèmes technologiques.
Règles
10. 1) Le nouvel OAR établit et garde en vigueur des Règles qui :
a) sont nécessaires ou appropriées à la régie et à la réglementation de tous les aspects de ses fonctions et responsabilités à titre d’organisme d’autoréglementation; b) visent à :
i) assurer la conformité avec la législation en valeurs mobilières applicable; ii) empêcher les activités frauduleuses et manipulatrices; iii) promouvoir des principes de négociation justes et équitables et le devoir des courtiers membres d’agir avec équité, honnêteté et de bonne foi avec leurs clients; iv) s’assurer que les personnes autorisées disposent des compétences et d’une formation continue adéquates; v) favoriser la collaboration et la coordination avec les entités s’occupant de la réglementation, de la compensation et du règlement des opérations sur titres et dérivés, du traitement de l’information ou des données sur ces opérations et de la facilitation de ces opérations; vi) promouvoir des normes et pratiques commerciales justes, équitables et conformes à l’éthique; vii) soutenir l’accès aux conseils dans diverses zones géographiques, y compris l’offre de services aux clients des milieux urbains et ruraux; viii) permettre aux membres d’élaborer et d’utiliser des avancées technologiques afin d’accroître les efficiences et la productivité tout en atténuant les risques pour les investisseurs et le public; ix) promouvoir la protection des investisseurs; x) être adaptables et proportionnées aux divers types et tailles des courtiers membres ainsi qu’à leurs modèles d’entreprise respectifs;

xi) contribuer à la stabilité financière, sous la direction des autorités de reconnaissance; xii) prévoir la prise de mesures disciplinaires appropriées à l’endroit de ceux dont il régit la conduite; c) n’imposent à la concurrence ou à l’innovation aucune contrainte ni aucun fardeau qui ne soit pas nécessaire ou approprié; d) n’imposent pas aux activités des participants au marché des restrictions ou des frais disproportionnés ou contraires à l’intérêt public; e) soutiennent l’intérêt public. Questions disciplinaires
11. 1) Le nouvel OAR élabore, rend publics et applique des processus équitables et
transparents aux fins suivantes :
a) le traitement des questions disciplinaires, notamment l’évaluation de l’adéquation de la supervision des personnes autorisées; b) la tenue d’audiences disciplinaires; c) l’imposition de sanctions. Échange d’information et collaboration avec les autorités
12. 1) Afin d’aider l’Autorité et les autres autorités de reconnaissance à accomplir leurs
mandats en matière de réglementation, le nouvel OAR collabore et échange de l’information ou des données avec elles de façon proactive et transparente.
2) Afin d’aider les autres autorités à accomplir leurs mandats en matière de
réglementation, le nouvel OAR collabore avec les entités suivantes, au Canada ou à l’étranger, et peut, au besoin, échanger de l’information ou des données avec elles de façon proactive et transparente :
a) les bourses; b) les organismes d’autoréglementation; c) les chambres de compensation; d) les organismes ou les autorités de renseignement financier ou d’application de la législation; e) les autorités bancaires et de services financiers ou d’autres autorités de réglementation financière;

f) les fonds de protection ou d’indemnisation des investisseurs.
3) La collaboration visée aux paragraphes 1 et 2 comprend notamment la collecte et
l’échange d’information ou de données pour les besoins de l’inscription, de la surveillance des marchés, des enquêtes, des mesures de mise en application, de la protection et de l’indemnisation des investisseurs ainsi que pour les autres besoins de la réglementation, et elle est soumise à la législation applicable en matière d’échange d’information et de protection des renseignements personnels.
4) L’information ou les données non publiques, dont les renseignements personnels,
qu’une autorité de reconnaissance communique au nouvel OAR sont confidentielles et ne peuvent être divulguées à des tiers que si elle y consent au préalable. Si la loi oblige le nouvel OAR à divulguer de l’information ou des données que lui a communiquées une autorité de reconnaissance, il doit en aviser cette dernière avant de se plier à l’obligation et faire valoir l’ensemble des dispenses ou des privilèges légaux applicables. Autres critères – Québec
13. Il doit être prévu dans les documents constitutifs, les règlements et les Règles du nouvel
OAR que le pouvoir de prendre des décisions liées à la supervision de ses activités au Québec est principalement exercé par des personnes qui résident au Québec.

APPENDICE 2
OBLIGATIONS D’INFORMATION
Préavis

1. Le nouvel OAR donne à l’Autorité un préavis écrit d’au moins 12 mois avant de
  réaliser une opération qui aurait pour lui l’une des conséquences suivantes :
  a) la cessation de l’exercice de ses fonctions; b) l’abandon, la suspension ou la liquidation de la totalité ou d’une partie importante de ses activités; c) la cession de la totalité ou de la quasi-totalité de ses actifs.
  2) Le nouvel OAR donne à l’Autorité un préavis écrit d’au moins trois mois avant
  d’accomplir les actes suivants :
  a) résilier l’entente conclue avec un fournisseur de services de technologie de l’information pour ses systèmes technologiques essentiels; b) mettre à exécution son intention de procéder à tout changement important à l’entente avec un fournisseur de services de technologie de l’information pour ses systèmes technologiques essentiels. Notification immédiate
1. Le nouvel OAR notifie immédiatement les événements suivants à l’Autorité :
  a) l’admission d’un nouveau courtier membre, y compris son nom, ainsi que toute condition lui ayant été imposée; b) son intention de suspendre ou de révoquer les droits et les privilèges ou l’adhésion d’un courtier membre ou de les soumettre à des conditions, notamment les renseignements suivants :
  i) le nom du courtier membre; ii) les motifs de la suspension, de la révocation ou des conditions projetées; iii) une description des mesures prises pour s’assurer que les clients du courtier membre sont traités adéquatement, s’il y a lieu; c) la réception de l’avis d’un courtier membre de son intention de démissionner;

d) la réception d’une demande de dispense adressée au conseil à l’égard d’une Règle qui pourrait avoir une incidence importante sur les éléments suivants, ou la modification ou la prolongation d’une telle dispense :
i) des membres et d’autres personnes sous la compétence du nouvel OAR; ii) les marchés des capitaux en général, notamment des intervenants ou des secteurs en particulier.
2) Le nouvel OAR peut procéder à la notification prévue au paragraphe 1, sauf aux
sous-paragraphes b et d, en publiant un avis contenant l’information pertinente, pourvu qu’il soit publié immédiatement après la décision d’admission et la réception d’un avis d’intention du courtier membre de démissionner, selon le cas. Notification rapide
3. 1) Le nouvel OAR notifie rapidement à l’Autorité les situations et événements
suivants et, dans chaque cas, décrit les circonstances les ayant entraînés, ainsi que les mesures proposées pour en assurer la résolution et, s’il y a lieu, fait le point en temps opportun sur leur évolution :
a) les changements dans la composition du conseil et de ses comités; b) les situations qui devraient raisonnablement susciter des préoccupations quant à la viabilité financière du nouvel OAR, notamment l’incapacité à faire face aux dépenses prévues pour le prochain trimestre ou exercice; c) la notification par une autorité de reconnaissance ou la constatation par le nouvel OAR qu’il contrevient ou contreviendra à une ou à plusieurs conditions de sa reconnaissance dans un territoire; d) toute infraction grave à la législation en valeurs mobilières applicable dont le nouvel OAR prend connaissance dans le cours normal de ses activités et de celles de ses membres; e) toute lacune importante dans les contrôles visés aux alinéas i et ii du sous-paragraphe a du paragraphe 1 de l’article 18 de l’Annexe A de la décision de reconnaissance; f) toute panne, tout retard ou défaut de fonctionnement ou tout incident de sécurité important, par exemple une atteinte à la cybersécurité, dans les systèmes essentiels du nouvel OAR ou des systèmes technologiques qui les soutiennent; g) toute atteinte aux mesures de sécurité qui a trait à des renseignements ou à des données dont le nouvel OAR a la gestion, s’il est raisonnable de

croire, dans les circonstances, que l’atteinte présente un risque réel de préjudice grave à l’endroit d’investisseurs, d’émetteurs, de personnes inscrites, d’autres participants au marché, du nouvel OAR, du FCPI ou des marchés des capitaux; h) toute infraction ou non-conformité réelle ou apparente de la part de courtiers membres, de personnes autorisées, de participants au marché ou d’autres entités qui pourrait raisonnablement donner lieu à des dommages-intérêts importants à des investisseurs, des clients, des créanciers, des membres, le FCPI ou le nouvel OAR, notamment :
i) une apparence de fraude; ii) un système de conformité inadéquat ou le manquement de la personne désignée responsable ou du chef de la conformité à ses responsabilités; iii) des irrégularités graves dans la supervision ou les contrôles internes; i) les situations qui se traduiraient par une anomalie significative dans les états financiers du courtier membre ou sont raisonnablement susceptibles de soulever des préoccupations quant à la viabilité de ce dernier, notamment l’insuffisance du capital, un signal précurseur et toute condition qui, de l’avis du nouvel OAR, pourrait donner lieu au paiement de sommes sur le FCPI, y compris toute condition qui, seule ou avec d’autres, pourrait raisonnablement entraîner l’une ou l’autre des conséquences suivantes si aucun correctif n’est apporté :
i) l’impossibilité pour le courtier membre d’exécuter rapidement des opérations sur titres, d’assurer rapidement la séparation des titres des clients comme exigé ou de s’acquitter rapidement de ses obligations envers les clients, les autres membres ou les créanciers; ii) une perte financière importante pour le courtier membre ou ses clients; j) toute mesure prise par le nouvel OAR à l’endroit d’un courtier membre connaissant des difficultés financières; k) toute condition imposée, modifiée ou supprimée par le nouvel OAR à l’égard d’un courtier membre; l) toute entente de mise en application conclue, modifiée ou annulée et tout engagement pris, modifié ou annulé à la demande du nouvel OAR à l’égard d’un courtier membre.

Rapports trimestriels
4. 1) Le nouvel OAR dépose chaque trimestre auprès de l’Autorité un rapport écrit relatif
à ses activités de réglementation rapidement après examen ou approbation par son conseil, les comités du conseil ou la haute direction, selon le cas, et contenant au moins l’information et les documents suivants :
a) pour chacune des activités réglementaires du nouvel OAR, un résumé des projets en cours, des changements de politiques ainsi que des enjeux principaux ou nouveaux survenus durant le trimestre précédent; b) un résumé des innovations ou des initiatives technologiques qui permettent aux membres d’élaborer et d’utiliser des avancées technologiques afin d’accroître les efficiences et la productivité; c) un résumé de tous les examens de conformité en cours ou terminés durant le trimestre précédent, et de tous les examens de conformité devant être entrepris par bureau et service du nouvel OAR pendant le trimestre suivant, y compris l’information sur les lacunes fréquentes ou importantes; d) un résumé de toute condition imposée, modifiée ou supprimée à l’égard d’une personne autorisée durant le trimestre précédent; e) un résumé de toutes les dispenses discrétionnaires accordées à des personnes physiques, à des courtiers membres et à des participants au marché durant le trimestre précédent; f) des statistiques sommaires pour le trimestre précédent sur toutes les plaintes de clients ou d’autres sources, notamment de toute autre autorité de réglementation des valeurs mobilières; g) des statistiques sommaires compilées par bureau pour le trimestre précédent sur la charge de travail que représente l’évaluation de chaque dossier, l’examen et l’analyse des opérations, la surveillance du marché, les enquêtes et les poursuites, en établissant une distinction entre les cas relatifs à la réglementation des courtiers membres et ceux relatifs à la réglementation des marchés, y compris la durée d’ouverture des dossiers; h) un résumé des dossiers de mise en application transmis à toute autorité de reconnaissance durant le trimestre précédent; i) l’effectif du nouvel OAR responsable de la réglementation, classé par fonction, et des précisions sur toute réduction ou tout changement à ce titre, par fonction, durant le trimestre précédent.

Rapports annuels
5. 1) Le nouvel OAR dépose chaque année auprès de l’Autorité un rapport écrit relatif
à ses activités de réglementation rapidement après examen ou approbation par son conseil, les comités du conseil ou la haute direction, selon le cas, et contenant au moins les documents suivants :
a) l’autoévaluation visée au paragraphe 10 de l’article 15 de l’Annexe A de la décision de reconnaissance contenant l’information précisée par le personnel de l’Autorité, et comportant les éléments suivants :
i) une évaluation de la manière dont le nouvel OAR s’acquitte de son mandat de réglementation et d’intérêt public, y compris une évaluation en fonction des critères de reconnaissance énoncés à l’Appendice 1 de la décision de reconnaissance et des conditions énoncées à l’Annexe A de la décision de reconnaissance; ii) une évaluation de sa performance au regard de son plan stratégique; iii) une description des tendances décelées à la lumière des examens de conformité et des enquêtes effectués, des poursuites engagées et des plaintes reçues, dont le plan élaboré par le nouvel OAR afin de régler les problèmes éventuels; iv) une confirmation de l’atteinte ou non des objectifs de référence et les raisons pour lesquelles le nouvel OAR ne les a pas atteints, le cas échéant; v) un organigramme complet; vi) une description et un rapport d’étape des projets importants entrepris par le nouvel OAR; vii) une description des questions soulevées par les autorités de reconnaissance ou les auditeurs externes ou internes, le cas échéant, et dont les membres de la haute direction du nouvel OAR font le suivi, ainsi qu’un résumé des progrès réalisés en vue de les régler; viii) une description des questions importantes soulevées et des recommandations formulées par les conseils régionaux auprès du conseil, notamment une précision et explication écrite des questions et des recommandations qui ont été rejetées ou partiellement adoptées par le conseil;

b) l’attestation, par son chef de la direction et avocat général, que le nouvel OAR se conforme aux conditions énoncées à l’Annexe A de la décision de reconnaissance qui lui sont applicables. Information financière
6. 1) Le nouvel OAR dépose auprès de l’Autorité des états financiers trimestriels non
audités et les notes y afférentes dans les 60 jours suivant la clôture de chaque trimestre.
2) Le nouvel OAR dépose auprès de l’Autorité des états financiers annuels audités
accompagnés du rapport de l’auditeur indépendant dans les 90 jours suivant la clôture de chaque exercice. Autre information
7. 1) Au moment opportun, le nouvel OAR fournit à l’Autorité l’information et les
documents suivants après leur publication ou après examen et approbation par son conseil, les comités du conseil ou la haute direction, selon le cas :
a) les résultats de tout examen visé au paragraphe 2 de l’article 7 des conditions énoncées à l’Annexe A de la décision de reconnaissance, s’il y a lieu, ainsi qu’un plan de correction ou tout autre document pertinent; b) les changements importants apportés au code de conduite et à la politique écrite de gestion des conflits d’intérêts potentiels des administrateurs et des membres du personnel; c) le budget financier de l’exercice en cours qui a été approuvé par le conseil, ainsi que les hypothèses sous-jacentes; d) les rapports visés au paragraphe 2) des articles 18 et 19 des conditions énoncées à l’Annexe A de la décision de reconnaissance; e) les résultats de la comparaison des systèmes et services de surveillance visés au paragraphe 4 de l’article 18 des conditions énoncées à l’Annexe A de la décision de reconnaissance, ainsi qu’un résumé de la procédure réalisée et des conclusions qui s’en dégagent; f) les rapports de gestion du risque d’entreprise et tout changement important à la méthodologie de gestion du risque suivie; g) la charte d’audit interne, le plan d’audit interne annuel et les rapports y afférents; h) le rapport annuel pour l’exercice en cours; i) le plan d’inspection de la conformité pour l’exercice en cours;

j) les changements importants dans les processus de conformité et de mise en application ou dans la portée des travaux, y compris les modèles d’évaluation du risque au sein des services concernés.
2) Le nouvel OAR donne à l’Autorité un préavis raisonnable de son intention de
publier ou de communiquer au public ou à toute catégorie de membres tout document qui pourrait avoir une incidence importante sur ce qui suit :
a) ses membres et les autres personnes relevant de sa compétence; b) les marchés des capitaux en général, notamment des intervenants ou des secteurs en particulier.
3) Le nouvel OAR ne peut publier ou présenter un document visé au paragraphe 2
de l’article 7 que si les autorités de reconnaissance lui indiquent n’avoir ni questions ni commentaires qui s’y rapportent.
4) Le nouvel OAR fournit à l’Autorité, sur demande et dès que possible, l’information
relative aux enquêtes ou dossiers de poursuites clos, qu’ils aient mené ou non à des mesures disciplinaires, y compris le rapport d’enquête définitif, la note de recommandation et la note définitive sur les sanctions, le cas échéant.

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MEMORANDUM OF UNDERSTANDING REGARDING
OVERSIGHT OF
THE NEW SELF-REGULATORY ORGANIZATION OF CANADA (NEW SRO) AMONG:
ALBERTA SECURITIES COMMISSION
AUTORITÉ DES MARCHÉS FINANCIERS
BRITISH COLUMBIA SECURITIES COMMISSION
MANITOBA SECURITIES COMMISSION
FINANCIAL AND CONSUMER SERVICES COMMISSION OF NEW BRUNSWICK OFFICE OF THE SUPERINTENDENT OF SECURITIES, DIGITAL GOVERNMENT AND SERVICE NEWFOUNDLAND AND LABRADOR OFFICE OF THE SUPERINTENDENT OF SECURITIES, NORTHWEST TERRITORIES NOVA SCOTIA SECURITIES COMMISSION OFFICE OF THE SUPERINTENDENT OF SECURITIES, NUNAVUT ONTARIO SECURITIES COMMISSION PRINCE EDWARD ISLAND OFFICE OF THE SUPERINTENDENT OF SECURITIES FINANCIAL AND CONSUMER AFFAIRS AUTHORITY OF SASKATCHEWAN OFFICE OF THE YUKON SUPERINTENDENT OF SECURITIES (each a Recognizing Regulator (RR), collectively the Recognizing Regulators (RRs) or the Parties) The Parties agree as follows:

Underlying Principles
a. Recognition
The New SRO is recognized as a self-regulatory organization under applicable securities legislation by each of the RRs and is a regulation services provider pursuant to National Instrument 23-101 Trading Rules. b. Oversight Program To ensure effective oversight of the New SRO’s performance of its functions, the Parties to this Memorandum of Understanding (MOU) have developed an oversight program (Oversight Program) with respect to the New SRO which includes:
(i) review of information filed by the New SRO, as set out in section 4; (ii) non-objection process, as set out in section 5;

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(iii) oversight reviews of the New SRO, as set out in section 6; and (iv) review of By-Laws and Rules of the New SRO, as set out in section 7. The purpose of the Oversight Program is to ensure that the New SRO is acting in accordance with its public interest mandate, and complying with the terms and conditions of the New SRO Recognition Order.
c. Oversight Guiding Principles
The guiding principles for the RRs’ joint oversight of the New SRO are:
(i) Harmonious direction – the RRs will strive to speak as one when giving direction to the New SRO; (ii) Transparency – each RR shares with other RRs important communications with the New SRO in a timely manner; and (iii) Efficiency – each RR will strive to conduct oversight in an effective manner while attempting to minimize the resources required from other RRs and the New SRO. d. Previous Memoranda of Understanding This MOU replaces the memoranda of understanding that took effect on April 1, 2021 between the applicable RRs of the Investment Industry Regulatory Organization of Canada (IIROC) and the Mutual Fund Dealers Association of Canada (MFDA) in respect of the oversight of IIROC and the MFDA.
2. Definitions
Unless otherwise defined or interpreted in this MOU, every term used in this MOU that is defined in subsection 1.1(3) of National Instrument 14-101 – Definitions has the meaning ascribed to it in that subsection. “Approved Person” has the meaning ascribed to that term in the New SRO Rules. “Board” has the meaning ascribed to that term in the New SRO Recognition Order. "Coordinators" mean the two RRs that are designated as such from time to time by consensus of all the RRs.

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“Independent Director” has the meaning ascribed to that term in the New SRO Recognition Order. “Member” has the meaning ascribed to that term in the New SRO Recognition Order. “Reviewing Regulator” means an RR that is participating in an oversight review of the New SRO. “Rule” means any rule, policy, form, fee model or other similar instrument of the New SRO. “Rule Change” means a new Rule, or an amendment, a revocation or a suspension of an existing Rule. “New SRO Recognition Order” means an order issued by each RR pursuant to its securities legislation recognizing the New SRO as a self-regulatory organization.
3. General Provisions
a. Oversight Committee
The RRs will establish an oversight committee (Oversight Committee) which will act as a forum and venue for the discussion of issues, concerns and proposals related to the oversight of the New SRO. Each of the RRs shall designate from time to time representatives on the Oversight Committee. The Oversight Committee will provide to the Chairs of the RRs an annual written report that will include a summary of all oversight activities conducted during the previous period (Annual Report on Oversight Activities). The Annual Report on Oversight Activities will also be published. b. Coordinators The two RRs that are designated as Coordinators are tasked with the role of coordinating, communicating and scheduling activities of the Oversight Program between the RRs, and between the RRs and the New SRO. The Coordinators must not make any unilateral decision, or give unilateral direction, with respect to the New SRO. The Coordinators will serve for four years on a staggered rotation basis among the two designated RRs. Initially, one of the two Coordinators will be replaced after two years, and thereafter each Coordinator will have a four-year term, such that a

4 new Coordinator will be designated to replace a current Coordinator every two years. Designation of a new Coordinator will be made one year in advance of the end of an exiting Coordinator’s term.
c. Staff Contact
The Coordinators will provide the New SRO with key staff contacts in each jurisdiction for the purposes of matters arising under this MOU or relating to oversight in general. d. Status Meetings The Coordinators will organize quarterly conference calls and an annual in-person meeting of the Oversight Committee and New SRO staff. The purpose is to discuss matters relating to the Oversight Program of the New SRO, issues relating to the regulation of New SRO’s Members and other matters that are of interest to the RRs and the New SRO. The Coordinators are also responsible for taking minutes of these calls and in-person meetings.
4. Review of Information Filed
Any comments of the staff of the RRs on information filed by the New SRO will be sent to the Coordinators, with a copy to staff of the other RRs. The Coordinators will request that the New SRO respond to comments raised by the RRs and copy staff of the other RRs on its response.
5. Non-Objection Process
The RRs have developed a non-objection process, as set out in Appendix A.
6. Oversight Reviews
The RRs have developed procedures for performing periodic reviews of New SRO’s functions, as set out in Appendix B.
7. Review of By-laws and Rules
The RRs have developed a Joint Rule Review Protocol (Protocol) for coordinating the review and approval of, or non-objection to, New SRO by-laws and Rules, as set out in Appendix C.
8. Information Sharing and Confidentiality
(a) Without limiting the transparency guiding principle in section 1(c) or any information sharing agreements to which an RR or the New SRO is a party, each RR will share with other RRs, and authorize the New SRO to share on a

5 timely basis with other RRs in circumstances where other RRs may be significantly impacted:
(i) directives from an RR to the New SRO, and
(ii) other information or data communicated between the RR and the New SRO, excluding circumstances where an RR is obligated to maintain confidentiality from other parties, namely where personal information is concerned. (b) All notices, reports, documents and any other information or data shared amongst any of the RRs pursuant to this MOU are shared exclusively for the regulatory purposes of the RRs, and with the expectation that they be shared and maintained in confidence, except as may otherwise be required by applicable law. Necessary and appropriate safeguards should be maintained to protect the confidentiality of documents. If any RR is required to disclose or provide access to such information or data provided by another RR, the recipient RR should assert all appropriate legal exemptions or privileges with respect to such information or data as may be available, and notify and obtain the written consent of the other RR, where permissible, prior to complying with such a requirement.
9. Authority
Nothing in this MOU is intended to limit the powers of any of the RRs under applicable securities legislation to take any measures authorized or required under such legislation.
10. Appendices
The MOU represents the RRs’ commitment to a coordinated and cooperative approach to conducting the Oversight Program, and the appendices are integral to the execution of this commitment.
11. Amendments to and Withdrawal from this MOU
This MOU may be amended from time to time, as mutually agreed upon by the RRs. Any amendments must be in writing and approved by the duly authorized representatives of each RR in accordance with the applicable legislation of each province or territory. This MOU may be terminated if mutually agreed upon by the RRs. Each RR can, at any time, withdraw from this MOU on at least 90 days’ written notice to the Coordinators and to each RR.

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12. Effective Date
This MOU comes into effect on January 1, 2023.
IN WITNESS WHEREOF the duly authorized signatories of the parties below have signed this MOU as of the Effective Date of the MOU stated above. ALBERTA SECURITIES COMMISSION Per:
Title:
AUTORITÉ DES MARCHÉS FINANCIERS
Per:
Title:
BRITISH COLUMBIA SECURITIES
COMMISSION
Per:
Title:
MANITOBA SECURITIES COMMISSION
Per:
Title:
FINANCIAL AND CONSUMER SERVICES
COMMISSION OF NEW BRUNSWICK
Per:
Title:
OFFICE OF THE SUPERINTENDENT OF
SECURITIES, DIGITAL GOVERNMENT AND
SERVICE NEWFOUNDLAND AND LABRADOR
Per:
Title:
MINISTER FOR
INTERGOVERNMENTAL AFFAIRS
NEWFOUNDLAND AND LABRADOR, OR
DESIGNATE
Per:
Title:
OFFICE OF THE SUPERINTENDENT OF
SECURITIES, NORTHWEST TERRITORIES
Per:
Title:
NOVA SCOTIA SECURITIES COMMISSION
Per:
Title:
OFFICE OF THE SUPERINTENDENT OF
SECURITIES, NUNAVUT
Per:
Title:

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ONTARIO SECURITIES COMMISSION
Per:
Title:
PRINCE EDWARD ISLAND OFFICE OF THE
SUPERINTENDENT OF SECURITIES
Per:
Title:
FINANCIAL AND CONSUMER AFFAIRS
AUTHORITY OF SASKATCHEWAN
Per:
Title:
OFFICE OF THE YUKON SUPERINTENDENT
OF SECURITIES
Per:
Title:

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Appendix A
Non-Objection Process

Purposes of non-objection process
The RRs agree and hereby adopt a non-objection process for the following purposes:
(a) nomination of each candidate for an Independent Director position; (b) appointment of the Chief Executive Officer (CEO); (c) changes to the Board skills matrices; (d) changes to the CEO skills sub-matrix; and (e) approval of a Board exemption, or an amendment or extension to a Board exemption, from a Rule that could have a significant impact on:
(i) Members and others subject to New SRO's jurisdiction; or (ii) the capital markets generally, including, for greater clarity, particular stakeholders or sectors.
Non-objection criteria
Without limiting the discretion of each RR, the RRs agree to consider these factors when following the non-objection process:
(a) whether the proposed action subject to the non-objection process is in the public interest; (b) whether the New SRO has provided sufficient analysis; and (c) whether there are conflicts with applicable laws or the terms and conditions of New SRO’s recognition.
Required filings
(a) Language requirements. The New SRO will file the information required under this section concurrently in both English and French. (b) Filings. The New SRO will file the following information with staff of the RRs, and upon request by any RR, any other document or information:

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(i) under subsection 1(a):
(A) documentation including the analysis undertaken to confirm the independence of a candidate. (ii) under subsection 1(b):
(A) documentation including the analysis undertaken to support the selection of the CEO; (B) confirmation that the CEO nominee has passed the fit and proper assessment by the Board; and (C) completed CEO skills sub-matrix. (iii) under subsection 1(c):
(A) Board skills matrices reflecting proposed changes, including rationale. (iv) under subsection 1(d):
(A) CEO skills sub-matrix reflecting proposed changes, including rationale. (v) under subsection 1(e):
(A) memorandum and supporting information used by the Board to inform their decision.
4. Non-Objection Process
(a) Confirming receipt. Upon receipt of the materials filed under subsection 3(b), staff of the Coordinators will, as soon as practicable, send written confirmation of receipt to the New SRO, with a copy to staff of the other RRs. (b) RR review. Staff of each RR will provide any comments in writing to staff of the other RRs within 10 business days of receiving the materials filed under subsection 3(b), or as otherwise agreed upon by staff of the RRs. The process to provide comments and obtain responses from the New SRO will be established and agreed upon by staff of the RRs. If no comments are provided by staff of an RR within the prescribed period, then that RR will be deemed not to object.

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(c) Intention to object. After completing the comment process provided under subsection 4(b) above, if all RRs do not intend to object, staff of the Coordinators will send a written notice of non-objection to the New SRO and will copy staff of all RRs. If staff of any RR intends to recommend that the RR objects, the RRs will use best efforts to adhere to the following:
(i) within a reasonable timeline agreed upon by staff of the RRs, staff of any RR who intends to make a recommendation that the RR objects will advise staff of the other RRs, in writing, of their intended recommendation and provide reasons for it; (ii) within 5 business days of receiving or sending a notice of intended recommendation, staff of the Coordinators will convene a conference call with staff of the other RRs and, as applicable, the New SRO; (iii) if the intended recommendation still exists after any such discussion, staff of the applicable RRs will, within a reasonable timeline agreed upon by staff of the RRs, recommend to their respective decision makers that they object; (iv) if the decision maker of any RR intends to object, the Coordinators will provide written notification to the New SRO with reasons for the intended objection and copy staff of the other RRs, and will give the New SRO an opportunity to present written submissions; (v) after considering the written submissions provided by the New SRO, if any of the RRs still intends to object, then the RRs shall use the process provided under section 12 of Appendix C of this MOU, but not including the process described at section 13, with necessary adaptations; (vi) if any RR objects after having completed the process described in paragraph 4(c)(v), it will provide promptly a written confirmation of objection to staff of the other RRs. Staff of the Coordinators will then provide to the New SRO a written notice of objection and will copy staff of the other RRs; (vii) if after completing the process described in paragraph 4(c)(v), RRs that intended to object as described in paragraph 4(c)(iv) do not object, they will provide promptly a written non-objection confirmation to staff of the other RRs. RRs that did not intend to object will be deemed not to object. Staff of the Coordinators will then send a written notice of non-objection to the New SRO and will copy staff of the other RRs.

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Appendix B
Oversight Reviews
The RRs will carry out periodic coordinated oversight reviews of the New SRO for the purposes of: (i) evaluating whether selected regulatory processes are effective, efficient, and are applied consistently and fairly; and (ii) assessing compliance with the terms and conditions of recognition. An RR may choose to participate in a coordinated review of a New SRO office depending on the functions carried out in that office, or may choose to rely on another RR for the review of the New SRO office. In cases where an RR chooses not to review the New SRO office in its jurisdiction, the other RRs may conduct a review of that New SRO office. Each RR may also perform an independent review of the New SRO to deal with significant and/or local issues. Any RR that intends to perform such a review will notify staff of the other RRs prior to conducting such a review. The scope of the review will be determined by utilizing a risk-based methodology established and agreed upon by staff of the RRs. When conducting a coordinated review, the Reviewing Regulators will use best efforts to adhere to the following within any timelines established among themselves:
1) The Reviewing Regulators will establish and agree on a work plan for the coordinated
review that sets the target completion date for each step, including conducting the review, reviewing draft reports, confirming factual accuracy, translating and publishing the final report, and follow-up plans.
2) The coordinated review of New SRO’s offices will be conducted at the same time and,
for each New SRO office, a Reviewing Regulator will be designated as the regulator who has overall responsibility for the review of that office.
3) The Reviewing Regulators will develop and use a uniform review program and uniform
performance benchmarks to conduct the coordinated review and will ensure the review is appropriately staffed in their respective jurisdiction.
4) The Coordinators will, as needed, arrange for communication among the Reviewing
Regulators during the course of a review, to discuss the progress of the work completed and to ensure appropriate consistency in the Reviewing Regulators’ approach.
5) Each Reviewing Regulator will share with all other Reviewing Regulators the results
of its review, including draft findings and, upon request, supporting materials.

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6) Unless otherwise agreed upon, the Coordinators will draft a review report and share
it among the Reviewing Regulators to ensure it meets all of their expectations and requirements, as applicable. The review report will:
a) take into account the draft findings and comments of the Reviewing Regulators, and b) use a common set of criteria to rate the significance and urgency of findings.
7) If the Reviewing Regulators disagree on the content of the draft review report, the
Reviewing Regulators will follow the process provided in section 12 of Appendix C of this MOU for resolution.
8) After the Reviewing Regulators are mutually satisfied with the draft review report, the
Coordinators will forward the draft review report to the New SRO to confirm factual accuracy.
9) The New SRO will review the draft review report for factual accuracy and respond to
the Reviewing Regulators with comments.
10)The Reviewing Regulators will consider New SRO’s comments and revise the review report as necessary. 11)The Coordinators will send the revised review report to the New SRO for its formal response. 12)On receipt of New SRO’s formal response, the Reviewing Regulators will incorporate such formal response and any follow-up plans into the review report as applicable. 13)Each Reviewing Regulator will seek the necessary internal approval to publish the final review report, taking into account language translation needs where applicable. 14)When each Reviewing Regulator has obtained the necessary internal approvals, the Coordinators will, and the other Reviewing Regulators may, publish the final review report.

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Appendix C
Joint Rule Review Protocol

Scope and purpose
The RRs have entered into this Protocol to establish uniform procedures for their review of and decision-making about Rule Changes proposed by the New SRO. Any review of a new by-law, amendment to an existing by-law or revocation of an existing by-law proposed by the New SRO will follow the process for review of and decisionmaking about Rule Changes set out in this Protocol, with the necessary adaptations.
Classifying Rule Changes
(a) Classification. The New SRO will classify each proposed Rule Change as “housekeeping” or “public comment”. (b) Housekeeping Rule Changes. A “housekeeping” Rule Change is a Rule Change that has no material impact on investors, issuers, registrants, the New SRO, the Canadian Investor Protection Fund (CIPF) or the Canadian capital markets generally and that:
(i) makes necessary changes of an editorial nature (such as correcting a textual mistake or inaccurate cross-reference, correcting a translation, making a formatting change, or standardization of terminology), (ii) changes the routine internal processes, practices, or administration of the New SRO, (iii) is necessary to conform to applicable securities legislation, statutory or legal requirements, accounting or auditing standards, or to other New SRO Rules or by-laws (including those that the RRs have approved or non-objected to, but which the New SRO has not yet made effective), or (iv) establishes or changes a due, fee or other charge imposed by the New SRO under a Rule that the RRs have previously approved or nonobjected to. (c) Public comment Rule Changes. A “public comment” Rule Change is any Rule Change that is not a housekeeping Rule Change. (d) RRs’ disagreement with classification. If staff of an RR thinks that the New SRO incorrectly classified a proposed Rule Change as housekeeping, the RRs and the New SRO will use best efforts to adhere to the following:

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(i) Within 5 business days of the date of New SRO’s filing under section 3, staff of the RR who intends to disagree with the classification will advise staff of the other RRs, in writing, that they intend to disagree and provide reasons for its intended disagreement. (ii) Within 3 business days of receiving or sending a notice of disagreement, staff of the Coordinators will discuss the classification, and may arrange a conference call, with staff of the other RRs and, as applicable, the New SRO. (iii) If disagreement with the classification still exists after any such discussion, staff of the Coordinators will notify the New SRO of the disagreement, in writing, with a copy to staff of the other RRs within 10 business days of the date of New SRO’s filing. (iv) If staff of the Coordinators send a notice of disagreement to the New SRO under paragraph 2(d)(iii), the New SRO will reclassify the proposed Rule Change as a public comment Rule Change or withdraw the proposed Rule Change by filing a written notice with staff of the RRs indicating that it will be withdrawing the Rule Change. (v) If the New SRO does not receive any such notice of disagreement within 10 business days of the date of New SRO’s filing, the New SRO will assume that staff of the RRs agree with the classification.
3. Required filings
(a) Language requirements. The New SRO will file the information required under this section concurrently in both English and French, accompanied with an attestation from a certified translator. (b) Filings for housekeeping Rule Changes. The New SRO will file the following information with staff of the RRs for each proposed housekeeping Rule Change:
(i) a cover letter that indicates the classification of the proposed Rule Change and the applicable provisions in subsection 2(b), (ii) the Board resolution, including the date that the proposed Rule Change was approved and a statement that the Board has determined that the proposed Rule Change is in the public interest, (iii) the text of the proposed Rule Change and, where applicable, a blacklined version showing the changes to an existing Rule,

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(iv) a statement as to whether the proposed Rule Change involves a Rule that the New SRO, its Members or Approved Persons must comply with in order to be exempted from a requirement of securities legislation and any applicable references to such requirement, (v) confirmation that the New SRO followed its established internal governance practices in approving the proposed Rule Change and considered the need for consequential amendments, (vi) a statement as to whether the proposed Rule Change conflicts with applicable laws or the terms and conditions of New SRO’s recognition, and (vii) a notice for publication including:
(A) a brief description of the proposed Rule Change, (B) the reasons for the housekeeping classification, and (C) the anticipated effective date of the proposed Rule Change. (c) Filings for public comment Rule Changes. The New SRO will file the following information and data with staff of the RRs for each proposed public comment Rule Change:
(i) a cover letter that indicates the classification of the proposed Rule Change, (ii) the Board resolution, including the date that the proposed Rule Change was approved, and a reasonable explanation of why the Board has determined that the proposed Rule Change is in the public interest, (iii) the text of the proposed Rule Change, and, where applicable, a blacklined version showing the changes to an existing Rule, (iv) the items in subparagraphs 3(b)(iv), (v) and (vi), and (v) a notice for publication including:
(A) Information that must be included:
a. a concise statement, together with supporting analysis (including applicable quantitative analysis), of the nature, purpose and effect (including any regional-specific effect) of the proposed Rule Change,

16 b. an explanation as to how the New SRO has taken the public interest into account when developing the Rule Change, why the proposed Rule Change is in the public interest, and the anticipated effects of the proposed Rule Change on investors, issuers, registrants, the New SRO, CIPF and the Canadian capital markets generally,
c. a description of the Rule Change,
d. a description of the Rule-making process, including the context in which the New SRO developed the proposed Rule Change, the process followed and the consultation process undertaken, including applicable stakeholder engagements, when developing the Rule Change, e. the anticipated effective date of the proposed Rule Change, and f. a request for public comment together with details on how to submit comments within the stated comment period deadline, and a statement that the New SRO will publish all comments received during the comment period on its public website. (B) Information that must be included, if relevant:
a. where the proposed Rule Change requires investors, issuers, registrants, the New SRO, or CIPF to make technological systems changes, a description of the implications of the proposed Rule Change and, where possible, a discussion of material implementation issues and plans, b. any issues considered and any alternative approaches considered, including the reasons for rejecting those alternative approaches, and
c. a reference to other jurisdictions including an indication as to
whether another regulator in Canada, the United States or another jurisdiction has a comparable requirement or is contemplating making a comparable requirement and, if applicable, a comparison of the proposed Rule Change to the requirement of the other jurisdiction.
4. Review criteria

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Without limiting the discretion of the RRs, the RRs agree that the following are factors that staff of the RRs should consider when reviewing proposed Rule Changes:
(a) whether a proposed Rule Change is in the public interest, (b) whether the New SRO has provided sufficient analysis of the nature, purpose and effect of a proposed Rule Change, and (c) whether the proposed Rule Change conflicts with applicable laws or the terms and conditions of New SRO’s recognition.
5. Review and approval process for housekeeping Rule Changes
(a) Confirming receipt. Upon receipt of the materials filed under subsection 3(b), staff of the Coordinators will, as soon as practicable, send written confirmation of receipt of the proposed housekeeping Rule Change to the New SRO, with a copy to staff of the other RRs. (b) Approval. Except where a notice of disagreement has been sent to the New SRO in accordance with paragraph 2(d)(iii), the proposed Rule Change will be deemed approved or non-objected to on the eleventh business day following the date of New SRO’s filing under section 3.
6. Review process for public comment Rule Changes
(a) Confirming receipt. Upon receipt of the materials filed under subsection 3(c), staff of the Coordinators will, as soon as practicable, send written confirmation of receipt of the proposed public comment Rule Change to the New SRO, with a copy to staff of the other RRs. (b) Publication and public comment period. As soon as practicable, staff of the Coordinators and the New SRO will, and staff of the other RRs may:
(i) coordinate a publication date among themselves, and (ii) publish on their respective public websites or bulletin the materials referred to in paragraphs 3(c)(iii) and (iv) for the comment period recommended by the New SRO, commencing on the date the proposed public comment Rule Change appears on the public website or in the bulletin of the Coordinators. (c) Publishing and responding to public comments. Within 3 business days of the end of the subsection 6(b) comment period, the New SRO will publish any public comments on its public website, if it has not already done so. The New SRO will also prepare a summary of public comments and responses to those

18 public comments, if any, and send them to staff of the RRs within any timelines established by staff of the RRs. (d) RR review. After the subsection 6(b) comment period has ended, and, if applicable, the New SRO has provided the summary and responses required by subsection 6(c), staff of the RRs will, in writing, provide any significant comments to staff of the other RRs within any timelines established among themselves. (e) RRs have no comments. If staff of the Coordinators do not receive and do not have any significant comments within the period provided for under subsection 6(d), staff of the RRs will be deemed not to have any comments and proceed immediately to the approval or non-objection process in section 8. (f) RRs have comments. If staff of the Coordinators receive or have significant comments within the period provided for under subsection 6(d), staff of the RRs and, as applicable, the New SRO will use best efforts to adhere to the following process using timelines established among themselves:
(i) After the end of the period provided for under subsection 6(d), staff of the Coordinators will prepare and send to staff of the other RRs a draft comment letter that incorporates their own significant comments and the significant comments raised by staff of the other RRs and may, if deemed necessary, identify different views among staff of the RRs. (ii) Staff of the RRs will provide any significant comments on the draft comment letter, in writing, to staff of the Coordinators and the other RRs; and if staff of the Coordinators do not receive any such comments within the timelines agreed upon, staff of the other RRs will be deemed not to have any comments. (iii) Following the other RRs’ response (or deemed response), staff of the Coordinators will consolidate all comments received and, when finalized to the satisfaction of staff of the RRs, send the comment letter to the New SRO, with a copy to staff of the other RRs. (iv) The New SRO will respond, in writing, to the comment letter sent by staff of the Coordinators, with a copy to staff of the other RRs. (v) After receiving New SRO’s response, staff of the RRs will provide any significant comments, in writing, to staff of the other RRs; if staff of the Coordinators do not receive and do not have any such comments within the timelines agreed upon, staff of the RRs will:
(A) be deemed not to have any comments, and

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(B) proceed immediately to the approval or non-objection process in
section 8.
(vi) Staff of the RRs and, as applicable, the New SRO will follow the process in paragraphs 6(f)(i) to (v) when staff of the RRs have significant comments on New SRO’s response to any comment letter. (vii) Staff of the Coordinators will attempt to resolve any issues that staff of the RRs have raised on a timely basis and will consult with staff of the other RRs or the New SRO, as needed. (viii) If staff of the RRs disagree about the substantive content of the comment letter in paragraph 6(f)(i) or whether to recommend approval of or non-objection to the Rule Change, staff of the Coordinators will invoke section 12. (ix) If the New SRO fails to respond to comments of staff of the RRs within 120 days of receipt of the most recent comment letter from staff of the RRs (or such other time agreed upon by staff of the RRs), the New SRO may withdraw the Rule Change in accordance with section 13 or staff of the RRs will, if they agree among themselves to do so in writing, recommend that their respective decision makers object to or not approve the Rule Change.
7. Revising and republishing public comment Rule Changes
(a) Language requirements. If, subsequent to its publication for comment, the New SRO revises a public comment Rule Change, the New SRO will file any such revision, which will include, as applicable, a blacklined version to the original published version, a blacklined version to the existing Rule, and the text of the revised Rule Change concurrently in both English and French, accompanied with an attestation from a certified translator. (b) Revising Rule Changes. If such a revision changes the Rule Change’s substance or effect in a material way, staff of the Coordinators may, in consultation with the New SRO and staff of the other RRs, require the revised Rule Change to be republished for an additional comment period. Upon republication, the previously published Rule Change will be superseded. (c) Published documents. If a public comment Rule Change is republished, the revised request for comments will include, as applicable, the information filed under subsection 7(a), the date of Board approval (if different from the original published version), New SRO’s summary of public comments received and responses for the previous request for comments, together with an explanation of the revisions to the Rule Change and the supporting rationale for the revisions, including why the revisions are in the public interest.

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(d) Applicable provisions. Any republished public comment Rule Change will be subject to all provisions in this Protocol applicable to public comment Rule Changes, except where otherwise provided for in this Protocol.
8. Approval process for public comment Rule Changes
(a) Coordinators seek approval. Staff of the Coordinators will use their best efforts to seek approval of or non-objection to the Rule Change within 30 business days of the end of the review process set out in section 6. (b) Coordinators circulate documents. After the Coordinators make a decision about a Rule Change, staff of the Coordinators will promptly circulate to staff of the other RRs applicable documentation relating to the Coordinators’ decision. (c) Other RRs seek approval. Staff of the other RRs will use their best efforts to seek approval or non-objection within 30 business days of receipt of applicable documentation from staff of the Coordinators. (d) Other RRs communicate decision to Coordinators. Staff of each RR will promptly inform staff of the Coordinators in writing after a decision about the Rule Change has been made. (e) Coordinators communicate decision to the New SRO. Staff of the Coordinators will promptly communicate to the New SRO, in writing, the decision about the Rule Change, including any conditions, upon receipt of notification of the other RRs’ decisions.
9. Effective date of Rule Changes
(a) Public comment Rule Changes. Public comment Rule Changes (other than Rule Changes implemented under section 11) will be effective on the later of:
(i) the date the Coordinators publish the notice of approval or non-objection in accordance with subsection 10(a), and (ii) the date designated by the New SRO under subparagraph 3(c)(iv)(A) or the date as determined by the New SRO. (b) Housekeeping Rule Changes. Housekeeping Rule Changes will be effective on the later of:
(i) the date of deemed approval or non-objection in accordance with subsection 5(b), and (ii) the date designated by the New SRO under subparagraph 3(b)(iv)(C).

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(c) Revisions to the effective date of a Rule Change. The New SRO will advise staff of the RRs in writing if it has not made a Rule Change effective by the date designated by the New SRO under subsection 9(a), and will include the following information:
(i) the reasons it has not yet made the Rule Change effective, (ii) New SRO’s projected timeline for making the Rule Change effective, and (iii) the impact on the public interest of not making the Rule Change effective by the date designated by the New SRO under subsection 9(a).
10. Publishing notice of approval
(a) Public comment Rule Changes. For any public comment Rule Change, staff of the Coordinators and the New SRO will both publish a notice of approval of or non-objection on their respective public websites, together with:
(i) if applicable, New SRO’s summary of comments received and responses, (ii) if changes were made to the version published for public comment, a blacklined version of the revised Rule Change compared to the previously published public comment Rule Change, and (iii) if requested, a blacklined version to the existing Rule. (b) Housekeeping Rule Changes. For any housekeeping Rule Change, staff of the Coordinators will prepare a notice of deemed approval or non-objection and both the Coordinators and the New SRO will publish the notice, together with the materials referred to in paragraphs 3(b)(iii) and (iv), on their respective public websites. (c) Publication by other RRs. Any other RRs may publish notices of approval at their own discretion.
11. Immediate implementation

(a) Criteria for immediate implementation. If the New SRO identifies an urgent need to implement a proposed public comment Rule Change because of a substantial risk of material harm to investors, issuers, registrants, other market participants, the New SRO, CIPF or the Canadian capital markets generally, the New SRO may make the proposed public comment Rule Change effective immediately, subject to subsection 11(d), and provided that:

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(i) The New SRO provides staff of each RR with written notice of its intention to rely upon this procedure at least 10 business days before the Board considers the proposed public comment Rule Change for approval, and (ii) New SRO’s written notice in paragraph 11(a)(i) includes:
(A) the date on which the New SRO intends the proposed public comment Rule Change to be effective, and (B) an analysis in support of the need for immediate implementation of the proposed public comment Rule Change. (b) Notice of disagreement. If staff of an RR does not agree that immediate implementation is necessary, staff of the RRs and, as applicable, the New SRO will use best efforts to adhere to the following:
(i) Staff of each RR which disagrees with the need for immediate implementation will, within 5 business days after the New SRO provides notice under subsection 11(a), advise staff of the other RRs in writing that they disagree and provide the reasons for its disagreement. (ii) Staff of the Coordinators will promptly notify the New SRO in writing of the disagreement. (iii) Staff of the New SRO and staff of the RRs will discuss and attempt to resolve any concerns raised on a timely basis but, if the concerns are not resolved to the satisfaction of staff of all RRs, the New SRO cannot immediately implement the proposed public comment Rule Change. (c) Notice of no disagreement. Where there is no notice of disagreement under and within the timelines set out in paragraph 11(b)(i), or where concerns have been resolved under paragraph 11(b)(iii), staff of the Coordinators will immediately provide written notice of no disagreement to the New SRO, with a copy to staff of the other RRs, indicating that it may now seek Board approval to immediately implement the proposed public comment Rule Change. (d) Effective date. Proposed public comment Rule Changes that the New SRO immediately implements in accordance with section 11 will be effective on the later of the following:
(i) the date the Board approves the Rule Change, and (ii) the date designated by the New SRO in its written notice to staff of the RRs.

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(e) Subsequent review of Rule Change. A public comment Rule Change that is implemented immediately will subsequently be published, reviewed, and approved or non-objected to in accordance with the applicable provisions of this Protocol. (f) Subsequent disapproval of Rule Change. If the RRs subsequently object to or do not approve a public comment Rule Change that the New SRO immediately implemented, the New SRO will promptly repeal the public comment Rule Change and inform its Members of the RRs’ decision.
12. Disagreements
If any disagreement, either among the RRs or between the RRs and the New SRO, about a matter arising out of or relating to this Protocol cannot be resolved through staff discussions, staff of the RRs will use best efforts to adhere to the following using timelines established among themselves:
(a) If staff of one of the RRs notifies the other RRs that in their view there is a disagreement that cannot be resolved through staff discussions, then staff of the Coordinators will arrange for senior staff of the RRs to discuss the issues and attempt to reach a consensus. (b) If, following such discussions, a consensus is not reached, staff of the Coordinators will escalate the disagreement as applicable and, ultimately, to the RRs’ Chairs or other senior executives of the RRs or such other process as agreed to by staff of the RRs. (c) If, following such escalation, a consensus is not reached, the New SRO may withdraw the Rule Change in accordance with section 13 or staff of the RRs will recommend that their respective decision makers object to or not approve the Rule Change.
13. Withdrawing Rule Changes
(a) Filing notice of withdrawal. If the New SRO withdraws a proposed public comment Rule Change that the RRs have not yet approved or non-objected to, the New SRO will file with staff of the RRs a written notice indicating that it will be withdrawing the Rule Change. (b) Contents of notice of withdrawal. The written notice in subsection 13(a) must contain:
(i) the reason the New SRO submitted the proposed Rule Change, (ii) any date that the Board approved the proposed Rule Change,

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(iii) any prior publication dates,
(iv) the Board resolution supporting the withdrawal of the proposed Rule Change, if applicable, (v) the reasons the New SRO is withdrawing the proposed Rule Change, and (vi) the impact of withdrawing the proposed Rule Change on the public interest. (c) Publishing notice of withdrawal. Where the proposed Rule Change being withdrawn had previously been published for comment under subsection 6(b), staff of the Coordinators and the New SRO will both publish a notice on their public websites stating that the New SRO will be withdrawing the proposed Rule Change, together with the reasons the New SRO is withdrawing the proposed Rule Change.
14. Reviewing and amending Protocol
Staff of the RRs will, when they agree it is necessary to do so, conduct a joint review of the operation of this Protocol in order to identify issues relating to:
(a) the effectiveness of this Protocol,
(b) the continuing appropriateness of the timelines and other requirements set out in this Protocol, and (c) any necessary or desirable amendments to this Protocol.
15. Waiving or varying Appendix C
(a) New SRO request. The New SRO may file a written request with the RRs to waive or vary any part of this Protocol and, in such a case, the RRs will use best efforts to adhere to the following using timelines established among themselves:
(i) An RR who objects to the granting of the waiver or variation will, in writing, notify the other RRs of its objection, together with the reasons for its objection. (ii) If the Coordinators do not receive or send any notice of objection within the agreed upon timelines, the RRs are deemed to not object to the waiver or variation.

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(iii) The Coordinators will provide written notice to the New SRO as to whether or not the waiver or variation has been granted. (b) RR request. The RRs may waive or vary any part of this Protocol if all of the RRs agree in writing to such waiver or variation. (c) General. A waiver or variation may be specific or general and may be made for a time or for all time as mutually agreed to by the RRs.
16. Publishing materials
If staff of the Coordinators publish any materials under this Protocol, staff of the other RRs may also publish the same materials, and in such a case, staff of the Coordinators will coordinate the publication date with staff of the other RRs.

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September 30, 2022
VIA EMAIL
To:
Alberta Securities Commission
250, 5th Street SW
Ste. 600
Calgary, AB T2P OR4
Attn:
Mr. Stan Magidson
Chair and Chief Executive Officer
British Columbia Securities Commission
P.O. Box 10142, Pacific Centre
701 West Georgia Street
Vancouver, BC V7Y 1L2
Attn:
Ms. Brenda Leong
Chair and Chief Executive Officer
The Manitoba Securities Commission
500 - 400 St. Mary Avenue
Winnipeg, MB R3C 4K5
Attn:
Mr. David Cheop
Chair and Chief Executive Officer
Financial and Consumer Services Commission
85 Charlotte Street, Suite 300
Saint John, NB E2L 2J2
Attn:
Mr. Kevin Hoyt
Executive Director of Securities
Service Newfoundland & Labrador
Digital Government and Service NL
100 Prince Phillip Drive
P.O. Box 8700
St. John’s, NL A1B 4J6
Attn:
Mr. Scott Jones
Assistant Deputy Minister, Regulatory Affairs
Superintendent of Securities
Office of the Superintendent of Securities
Department of Justice, Government of the
Northwest Territories
5009 - 49 th Street, 1st Floor Stuart M.
P.O. Box 1320
Yellowknife, NT X1A 2L9
Attn:
Mr. Matthew F. Yap
Superintendent of Securities
Nova Scotia Securities Commission
Ste. 400, Duke Tower, 5251 Duke Street
PO Box 458
Halifax, NS B3J 2P8
Attn:
Mr. Paul E. Radford
Chair
Office of the Superintendent of Securities
Nunavut
1st Floor, Brown Building
Iqaluit, NU X0A 0H0
Attn: Shamus Armstrong

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Dear Sirs/Mesdames:
Re: Application for Recognition of New Self-Regulatory Organization of Canada (the “New SRO”) Introduction This letter sets out the joint application of the Investment Industry Regulatory Organization of Canada (“IIROC”) and the Mutual Fund Dealers Association of Canada (the “MFDA”, and together, the “SROs”) to the Alberta Securities Commission; Autorité des marchés financiers; British Columbia Securities Commission; Manitoba Securities Commission; Financial and Consumer Services Commission of New Brunswick; Office of the Superintendent of Securities, Digital Government and Services, Newfoundland and Labrador; Office of the Superintendent of Securities, Northwest Territories; Nova Scotia Securities Commission; Office of the Superintendent of Securities, Nunavut; Ontario Securities Commission; Prince Edward Island Office of the Superintendent of Securities; Financial and Consumer Affairs Authority of Saskatchewan; and Office of the Yukon Superintendent of Securities, which are collectively the “Recognizing Regulators” or members of the Canadian Securities Administrators (the “CSA” ), to recognize the entity resulting from the amalgamation of IIROC and MFDA, the New Self-Regulatory Organization of Canada, (the “New SRO”) as a self-regulatory organization under applicable securities legislation (the “Application”). The New SRO will also be a regulation service provider (“RSP”) under National Instrument 23-101 Trading Rules (“NI 23-101”), and an Information Processor (as defined under NI 21-101) for government and corporate debt securities, under applicable securities laws and NI 21- 101. Ontario Securities Commission 20 Queen Street West 22nd Floor Toronto, ON M5H 3S8 Attn:
Mr. D. Grant Vingoe
Chief Executive Officer
The Office of the Superintendent Securities
Office of the Attorney General
95 Rochford Street, P.O. Box 2000
Charlottetown, PE C1A 7N8
Attn:
Mr. Steve Dowling
Director
Autorité des marchés financiers
800, Square Victoria, 22e étage
Montréal, QC H4Z 1G3
Attn:
Mr. Louis Morisset
President and Chief Executive Officer
Financial and Consumer Affairs Authority of
Saskatchewan
1919 Saskatchewan Drive, 6th Floor
Regina, SK S4P 3V7
Attn:
Mr. Roger Sobotkiewicz
Chair and CEO
Office of the Yukon Superintendent of
Securities
307 Black Street, 1st Floor
Whitehorse, Yukon Y1A 2N1
Attn:
Mr. Fred Pretorius
Superintendent of Securities

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Background
Subject to recognition by the Recognizing Regulators, and approval by the members of the SROs, the SROs propose to consolidate their regulatory activities in the New SRO, through a legal amalgamation (the “Amalgamation”). The SROs will bring their memberships, assets, liabilities and legal and regulatory responsibilities, including memoranda of understanding, to the New SRO as a result of the Amalgamation. The main objective of creating the New SRO is to develop a regulatory framework that has a clear public interest mandate and fosters fair and efficient capital markets, by focusing on investor protection to promote public confidence and accommodating innovation and change. The Recognition Order will become effective upon the Amalgamation, at which time the SROs wish for each of IIROC and the MFDA’s existing recognition orders to be superseded and of no force or effect (discussed further below). The New SRO will be created in a manner consistent with the CSA Position Paper 25-404 – New Self-Regulation Organization Framework (the “Position Paper”) and will reflect the CSA’s vision to provide enhanced regulation of the investment industry. The terms of the Recognition Order being sought for the New SRO reflect the principles and approach of the Position Paper. The respective boards of directors of the MFDA and IIROC determined that the Amalgamation is the most effective way to facilitate the creation of a new single enhanced self-regulatory organization, in the form of the New SRO. Accordingly, the MFDA and IIROC entered into a combination agreement on August 29, 2022, which was approved by the respective boards of directors of the MFDA and IIROC. The Combination Agreement contemplates that, subject to the approval of the MFDA members and the IIROC members, the MFDA and IIROC will amalgamate. Further, the respective boards approved a joint information circular (“Joint Information Circular”) inviting members to vote “yes” to the Amalgamation at their upcoming special meeting (described below). MFDA members voted on the proposed amalgamation at a special meeting of MFDA members held at 11:00 a.m. (EDT) on September 29, 2022. IIROC members voted on the proposed amalgamation at a special meeting of IIROC members held at 5:00 p.m. (EDT) on September 29, 2022. The Amalgamation was approved by not less than two-thirds of the votes cast by MFDA members entitled to vote at the MFDA Meeting and by not less than two-thirds of the votes cast by the Dealer Members and Marketplace Members of IIROC entitled to vote, each voting as a separate class, at the IIROC Meeting. The New SRO Mandate The New SRO will be a non-share capital corporation under the Canada Not-for profit Corporations Act (“CNCA”). The initial By-law No. 1 of the New SRO (“By-Law No. 1”) is attached hereto as
Schedule 1.
The mandate of the New SRO is to act in the public interest by, without limitation:
• protecting investors from unfair, improper, or fraudulent practices by its members;
• fostering fair and efficient capital markets and promoting market integrity;
• fostering public confidence in capital markets;

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• facilitating investor education;
• administering a fair, consistent and proportionate continuing education program for all Dealer
Members and applicable approved persons;
• accommodating innovation and ensuring flexibility and responsiveness to the future needs of
the evolving capital markets, without compromising investor protection;
• providing effective market surveillance;
• fostering efficient and effective cooperation and coordination with the Recognizing
Regulators to ensure regulatory alignment;
• facilitating access to advice and products for investors of different demographics;
• recognizing and incorporating regional considerations and interests from across Canada;
• facilitating meaningful consultation and input from all types of members and ensuring that
investor perspectives are factored into the development and implementation of regulatory policies;
• administering robust compliance and enforcement processes;
• ensuring that the complaint handling and resolution processes of New SRO and the complaint
handling requirements New SRO imposes on its members are accessible to, and provide clear understandable guidance for, complainants and deal with complaints fairly and efficiently;
• contributing to financial stability, under the direction of the Recognizing Regulators; and
• administering effective governance and accountability to all stakeholders and preventing
regulatory capture.
Members
The New SRO will initially have two classes of members, Dealer Members and Marketplace Members (collectively, “Members”), each class having equal voting rights and voting together. Upon completion of the Amalgamation, each MFDA Member and IIROC Dealer Member will become a Dealer Member of New SRO and each IIROC Marketplace Member will become a Marketplace Member of New SRO. A Member may qualify as both a Dealer Member and Marketplace Member but shall only be entitled to one vote on any vote by Members, unless a vote of Members by class is required. Dealer Members of the New SRO will be investment dealers and/or mutual fund dealers registered under applicable Canadian securities legislation and accepted for membership by the Board.

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A Marketplace Member of the New SRO will be a marketplace that is:

a recognized exchange or a commodity futures exchange registered in a jurisdiction
of Canada;
a recognized quotation and trade reporting system; or
a person or company not included in clause (a) or (b) above that facilitates the trading
of securities or derivatives in a jurisdiction of Canada; and
constitutes, maintains or provides a market or facility for bringing together buyers
and sellers of securities or derivatives;
brings together the orders for securities or derivatives of multiple buyers and sellers;
and
uses established non-discretionary methods under which the orders interact with
each other, and the buyers and sellers entering the orders agree to the terms of a trade. Corporate Governance The New SRO Board By-law No. 1 establishes a 15-member board of directors of the New SRO (the “Board”), comprised of the President and CEO of the New SRO (the “CEO”), six industry directors (representing the Members), and eight Independent Directors (as defined below). The roles of CEO and chair of the Board will be occupied by separate persons, and the chair of the Board must be an Independent Director. Pursuant to By-Law No. 1, the term of each director of the New SRO (each, a “Director”) will expire at the dissolution or adjournment of the second annual meeting of Members following the annual meeting of Members at which the Director was elected. With the exception of the President and CEO, a Director may be elected to serve four consecutive terms in office but will not be eligible to be elected to serve a fifth consecutive term. The term “Independent Director” means a Director who has no direct or indirect material relationship with the New SRO or a member of the New SRO. The full definition of “Independent Director” is set out in By-law No. 1. The initial Directors and chair of the Board (the “Chair”), proposed by the Special Joint Committee formed by IIROC, the MFDA and the CSA, are set out, and their backgrounds described, in the Joint Information Circular. The New SRO Board Committees The Board will initially appoint four standing committees: the Governance Committee, the Finance, Audit and Risk Committee, the Human Resources and Pension Committee and the Appointments Committee. The Board will appoint the chair of each committee.

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Governance Committee
The Governance Committee, in accordance with By-law No. 1, and considering the overall composition of the Board and its representation of the Canadian capital markets, will recommend as nominees for election as Directors those individuals that it considers qualified and desirable. The Governance Committee will consider all relevant factors in nominating directors to seek to ensure that the composition of the Board: (a) complies with the requirements of By-Law No. 1 and the New SRO Recognition Order, (b) provides fair, meaningful and diverse representation, (c) reflects the regional diversity of the New SRO’s stakeholders, (d) otherwise reflects, in the judgement of the Governance Committee, the appropriate balance of interests and perspectives of the Members and stakeholders, (e) consists of, in the judgement of the Governance Committee, a reasonable number of Directors with relevant experience with investor protection issues and (f) addresses, in the judgement of the Governance Committee, actual, potential or perceived conflicts of interest arising from any relationship between a Member and a Director. The Governance Committee will consider, for each potential Director:
• appropriate regional representation across Canada;
• appropriate mix of skills, competencies, individual diversity and characteristics to contribute
to a well-functioning Board able to service its mandate;
• the business interests of the candidate or entities with which the candidate is associated;
• the extent of overlap and/or integration of the boards and/or management between members
and entities with which the candidate is associated;
• in the case of Independent Directors, whether the candidate would have met the test to be
an Independent Director; and
• the appropriate resolution of any actual, potential or perceived conflicts of interest.
In addition, and in respect of Board nominees, the Governance Committee will focus on qualities such as integrity, business judgement and acumen, capital markets expertise and other relevant business, professional or board expertise, as well as ensuring that nominees are appropriate in recognition of the status of the New SRO as a self-regulatory organization in the various Canadian jurisdictions. The Governance Committee will recommend, and the Board may appoint, directors to fill vacancies that arise between annual Members’ meetings, ensuring that any such appointees maintain the Board composition specified by By-Law No. 1. The Governance Committee will be composed of not less than five directors, and may include the Chair of the Board. All of the members of the Governance Committee will be Independent Directors. The Governance Committee’s mandate includes: (i) reviewing the efficacy of the New SRO’s governance practices, (ii) managing and overseeing the process for nominating new directors to the Board, (iii) succession planning for the chair of the Board, (iv) managing and overseeing the process for evaluating the performance of the Board and its committees, (v) ensuring that there is an effective process in place for the identification and management of real, potential or perceived conflicts of

7 interest, (vi) appointing individuals to New SRO’s Investor Advisory Panel (as described below), and (vii) reviewing and approving the use of restricted funds (i.e. fine and settlement monies). Finance, Audit and Risk Committee The mandate of the Finance, Audit and Risk Committee (the “FAR Committee”) will be to assist the Board in its oversight of the integrity and effectiveness of New SRO’s accounting and financial reporting processes; the qualifications, independence and performance of New SRO’s external and internal auditors; the New SRO’s processes relating to its internal control systems and security of information; and the New SRO’s policies and processes for risk management. The FAR Committee will be composed of at least five Directors, a majority of which (including the chair of such committee) will be Independent Directors. Human Resources and Pension Committee The Board will establish a Human Resources and Pension Committee (the “HR Committee”) to ensure that New SRO can attract and retain personnel with the appropriate qualifications and experience to achieve its mandate, goals and strategic objectives by offering compensation, pension and benefit plans that are competitive, motivating and rewarding and to assist the Board in its oversight of the New SRO’s human resources policies and procedures, benefits and pension plans and with ensuring regulatory compliance thereof. The HR Committee will be composed of at least five Directors, a majority of which (including the chair of such committee) will be Independent Directors. Appointments Committee The Board will establish an Appointments Committee (the “Appointments Committee”) which will be responsible for appointing members to the New SRO hearing committees (the “District Hearing Committees”). Members of District Hearing Committees will sit as hearing panel members in the Districts (as defined in By-Law No. 1). The Appointments Committee will be composed of at least seven Directors, including the President and CEO, and a majority of which (including the chair of such committee) will be Independent Directors. In accordance with By-Law No. 1, the Appointments Committee will always be comprised of an uneven number of Directors. Member Committees New SRO National Council and Regional Councils The New SRO will have a National Council and seven Regional Councils composed of Dealer Members from each Region (as defined in By-Law No. 1). Each Regional Council will be composed of four to 20 members, as determined from time to time by the Regional Council, including a chair and vice-chair to be elected at the annual meeting of Dealer Members of the Region. The Regional Councils will have an advisory role to New SRO to provide regional perspectives on national or any other issues and recommendations on regulatory policy matters to staff of New SRO. Pursuant to the Recognition Order, New SRO will allocate sufficient resources to the Regional Councils to ensure they can meaningfully fulfil their
responsibilities. In addition, the Regional Councils will advise New SRO on industry trends and issues to ensure that New SRO is proactive in dealing with emerging issues.

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The Board intends to establish a National Council to be composed of the Chairs and Vice-Chairs of the Regional Councils and to act as a forum for cooperation and consultation among the Regional Councils and provide recommendations to the Board. The National Council will report to the Board at least annually. Functions currently residing with IIROC District Councils relating to hearing committee nominations, and MFDA Regional Councils with respect to members sitting as hearing panel members, will not reside within the new council structure, as the Appointments Committee will have responsibility for appointing members to District Hearing Committees. In addition, IIROC’s District Councils regulatory responsibilities will be transferred to New SRO, as Regional Councils will not have regulatory decision-making authority. As a transitional measure, pending the establishment of Regional Councils, the existing members of the IIROC District Councils and members of the MFDA Regional Councils will continue to serve on interim councils with a revised advisory mandate. Following the Amalgamation, the New SRO intends to consult with advisory committee members on the role of the new Regional Councils and National Council. The role and mandate of the Regional Councils and the National Council will be considered in the context of the New SRO, reflecting regional diversity and industry representation as well as a larger eco-system of the New SRO advisory committees. It is anticipated that Regional Councils will be constituted in the second calendar quarter of 2023. Advisory Committees The Board may from time to time appoint such advisory bodies as it may deem advisable, and may delegate such power of appointment to any Director, officer, committee or employee of the New SRO. Membership on such advisory committees shall be determined by the Board from time to time and if the Board so decides, members of such advisory committees may include Directors, directors, officers or employees of Members, or other individuals. Advisory committees will provide advice to staff and may report to the CEO, senior management or the Board as directed. Each will be asked to conduct an annual “self-assessment” and the Board will conduct a biennial review of the overall advisory committee structure to ensure that such committees are relevant and are providing meaningful advice in a timely and effective manner. The existing advisory committees of each of the MFDA and IIROC will continue after the completion of the Amalgamation on an interim basis. The New SRO will conduct a review of the mandates and composition of the existing advisory committees of the MFDA and IIROC and engage in a consultation with stakeholders on the proposed advisory committee structure for the New SRO. Investor Engagement The New SRO will create mechanisms to educate and formally engage with investors, including for the purpose of obtaining input on the design and implementation of applicable rule proposals. In
particular, the New SRO must:
• establish an investor advisory panel to provide independent research or input on regulatory
and/or public interest matters (the “Investor Advisory Panel”);
• establish a separate investor office within the New SRO that is prominently positioned, easily
identifiable and accessible to investors to be established to support rule development and

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• ensure that appropriate New SRO advisory committees include a reasonable proportion of
investor representatives; and
• maintain a whistleblower program.
The terms of reference of the New SRO’s Investor Advisory Panel is attached hereto as Schedule 4. Member Voting Rights In respect of matters to be voted upon by Members (including the election of Directors), all Members will vote together and be entitled to one vote per Member. In accordance with the CNCA, certain matters such as amendments to the New SRO’s articles of amalgamation or by-laws, including creating a new class of members, and certain fundamental transactions such as an amalgamation or plan of arrangement of New SRO or disposition of all or substantially all of its assets, will require approval by a two-thirds vote of the Members. A vote of members by class may be required for certain amendments to the New SRO’s articles of amalgamation or by-laws in accordance with the CNCA, but will not be required to create a new class of members. Conflicts of Interest The governance structure, the rule-making and policy development process, the hearing committee process, and the hearing panel structure will all reflect New SRO’s efforts to fulfill its public interest mandate and address the views of its Members and persons subject to its jurisdiction as an SRO. The New SRO will have policies and procedures managing real, potential or perceived conflicts of interest of: (i) its officers and employees, as reflected in the Employee Code of Conduct (the “Employee Code”), and (ii) members of its disciplinary panels. New SRO will undertake a review of each division where regulatory decisions are made by staff and will identify specific risk areas associated with conflicts of interest. The Employee Code will contain policies dealing with conflicts of interest in those areas where employees are required to make decisions on behalf of New SRO as
part of their regulatory responsibilities. In addition, internal policies and procedures of each division
where employees exercise decision-making authority will contain more specific guidelines on how to comply with the Employee Code. Generally, these deal with disclosure of any conflicts with persons regulated by New SRO and the allocation of responsibilities among staff that minimizes potential conflicts arising. The Employee Code will be approved by the Board and acknowledged by officers and employees initially and annually. The policies and procedures of New SRO will require that the Employee Code be reviewed at least annually to ensure that it continues to appropriately meet its objectives. The New SRO will also have a written policy managing conflicts of interest of members of its Board, which will be acknowledged by directors initially and on an annual basis. This policy will be reviewed periodically to ensure that it continues to appropriately meet its objectives and complies with the CNCA.

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Access
The existing criteria for access to membership and the provision of regulation services will be preserved in the New SRO, as initially will the processes for obtaining such access. The New SRO will have reasonable written criteria that permit all persons or companies that satisfy the criteria to access the New SRO’s regulatory services. The access criteria and the process for obtaining access will be fair and transparent. Any changes to the criteria or process for obtaining access will be developed and implemented in a fair and transparent manner and subject to Board approval as well as approval by the Recognizing Regulators. Pursuant to the Amalgamation, current members of the MFDA or IIROC will be Members of the New SRO and no additional acceptance or approval requirements will be required. Financial Viability The New SRO will be a non-share capital, membership-based, not-for-profit corporation. As with IIROC and the MFDA (as well as many of the Recognizing Regulators), its financial model will be based on the collection of fees from Members in order to recover the costs incurred in its regulatory activities. Upon completion of the Amalgamation, the New SRO will own all of the assets (and will assume all of the liabilities) of the MFDA and IIROC, including the balances in the MFDA Discretionary Fund and the IIROC Restricted Fund (which will be transferred to the New SRO Restricted Fund and used solely for prescribed purposes as described in the Recognition Order). In accordance with the draft Recognition Order, the New SRO must operate on a cost recovery basis and seek authorization for any increase in fees for Dealer Members that are not affiliated with the same controlling interest or are not dually registered as both investment dealers and mutual fund dealers, in each case to the extent that such increase is related to the costs of creating the New SRO. The costs and expenses incurred relating to the Amalgamation and start-up of the New SRO are being borne by IIROC and the MFDA and will ultimately be borne by the New SRO. Given that the creation of the New SRO is in the public interest, both the MFDA and IIROC sought approval from the CSA to access the MFDA Discretionary Fund and the IIROC Restricted Fund for an amount up to $4,290,000 each respectively. The balance of integration costs after application of approved Discretionary Fund and Restricted Fund use will be recovered through the Integration Cost Recovery Model fees charged to existing MFDA and IIROC Members who are affiliated with the same controlling ownership interest, and any New SRO Member, existing or new, that becomes dually registered before the cost recovery period ends, as further described below in the section on Fees. Fees Final fee model The New SRO will continue the project commenced during the Amalgamation planning process to develop an appropriate fee model for the New SRO following the Amalgamation. Development of a new fee model will be a complex exercise and will
therefore require expert professional advice. Implementation of any such fee model will involve consultation with Members and other stakeholders and will be subject to a public comment process and approval by the Recognizing Regulators.

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In accordance with the Recognition Order, the following principles will be applied in a fee model adopted by the New SRO:
• All fees imposed by the New SRO must be equitably allocated and be proportionate to
Members’ activities.
• Fees must not have the effect of creating unreasonable barriers to access.
• The process for setting fees must be fair and transparent.
• The New SRO must operate on a cost-recovery basis.
Interim fee model
Upon the Amalgamation, and on an interim basis, the existing fee structures and models of IIROC and the MFDA will initially be maintained and administered by the New SRO with necessary modifications (the “Interim Fee Model”). The Interim Fee Model is based on cost recovery. Members who are currently paying fees under both the IIROC and MFDA fee models will continue to pay such fees under the Interim Fee Model immediately following the Amalgamation and until such time as the new fee model is implemented. Dealer Members that register as both an investment dealer and a mutual fund dealer will pay fees under both the IIROC and MFDA fee structures within the Interim Fee Model until such time as the new fee model is implemented. IIROC’s Equity Market Regulation, Debt Market Regulation, and Debt Information Processor fee models will remain largely unchanged as part of the Interim Fee Model, except for the impact of the change on the timing of fee setting as described below. Fees for fiscal year 2023 will continue to be charged after the Amalgamation, through to the end of the respective fiscal years for MFDA and IIROC. In order to align administration of annual membership fees for the New SRO under the Interim Fee Model, all fees will be set and approved with the budget in March. Fees will be communicated on or about the first week of April with the first quarterly installment for annual membership fees due for payment by the first business day of May. Each subsequent quarterly installment for annual membership fees will be invoiced at the beginning of the quarter and due by the first business day of the following month. As the first quarter of fiscal 2024 for the New SRO is equivalent to the last quarter of fiscal 2023 for MFDA, mutual fund dealer Members will continue to pay the quarterly membership fees communicated for fiscal 2023 for that quarter, with the balance of annual membership fees for fiscal 2024 evenly distributed over the remaining three quarters and following the Interim Fee Model due dates noted above. The timing of processes related to non- payment of member fees will also be aligned. As one of the public interest guiding principles is facilitating access to advice for investors of different demographics, including those primarily served by smaller and independent firms, it is important to retain and support that community through the transition to the new regulatory model. Accordingly, the Interim Fee Model will reduce both minimum fees and rebalance downward the fee rates per Revenue Tier for IIROC fees and Assets Under Administration (“AUA”) category for MFDA fees applicable to the small dealer group. A small dealer is defined for the purposes of the Interim Fee Model as a Member that is either: (i) an investment dealer that pays the IIROC minimum fee, or (ii) a mutual fund dealer with AUA for MFDA fee purposes that is less than $1

12 billion. Specifically, the IIROC minimum fee will be reduced to $16,000 with the related Revenue Tiers reduced accordingly. The MFDA minimum fee will be reduced to $1,500, with the related AUA fee rates under $1 billion reduced by 50% for small MFDA dealers. This modification would apply starting for fiscal year 2024 and will apply for a minimum of two years or until the final fee model is determined. The Interim Fee Model Guidelines applicable to Investment Dealer Members and Marketplace Member are attached hereto as Schedule 3. Québec-based mutual fund dealers The transition of regulatory services in Québec and related impact on fees will follow the same fee model principles outlined above. While the New SRO will continue to operate on a cost recovery basis, efforts will be made to minimize or avoid fee impacts of duplicative regulatory structures during transition in Québec, and specifically ensure that mutual fund dealers in Québec pay the New SRO a reduced fee, the amount of which shall be proportionate to the services offered to them. Integration cost recovery model Integration costs will be recovered through a separate fee, calculated based on an integration cost recovery model (the “Integration Cost Recovery Model Fees”), charged quarterly as a percentage of the applicable firm’s annual membership fees, subject to a 10% annual cap. The percentage will be set annually and charged over three to five years until the balance of integration costs are recovered. The final timeframe will be determined after all integration costs captured by March 31, 2024 are known, to ensure that fees will remain under the 10% of annual membership fees cap. Applicable firms include existing MFDA Members and IIROC Members who are affiliated with the same controlling ownership interest, and any New SRO Member that becomes dually registered before the cost recovery period ends. Integration Cost Recovery Model Fees will begin for the first quarter of fiscal 2024 at an amount not to exceed 8% of annual membership fees. Performance of Regulation Functions Recognition Orders The independence, mandate and obligations of the New SRO will be prescribed as terms and conditions of its Recognition Order. As with IIROC and the MFDA, the New SRO must seek input from the Recognizing Regulators before finalizing its strategic and business plans, annual statements of priorities and budgets. The New SRO must cooperate and assist with any reviews of its functions by the Recognizing Regulators or an independent thirdparty that is acting at the direction of the Recognizing Regulators. The Recognizing Regulators will conduct an annual risk-based oversight review, which will enable the Recognizing Regulators to ensure that the New SRO acts in a manner consistent with the public interest in carrying out its mandate as an SRO. Regulation Services

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The New SRO will seek to protect investors, foster investor confidence and enhance the fairness and efficiency of Canadian capital markets through the provision of effective selfregulation of Members, their representatives and other persons subject to the New SRO’s jurisdiction. As a neutral, cost-effective and responsive SRO, the New SRO will not unreasonably discriminate between Members. The New SRO will assume all of the regulatory responsibilities and perform, on a consolidated basis, all of the regulatory services currently being performed by IIROC and the MFDA. Under the applicable National Instruments, orders granted under the National Instruments by certain securities commissions, and its regulation service agreements with Marketplace Members, IIROC applies the UMIR to Marketplace Members and Dealer Members. Subscribers of a Marketplace Member alternative trading system (“ATS”) that are not Dealer Members are subject to UMIR and the jurisdiction of IIROC, as IIROC’s agreements with Marketplace Member ATSs require this. Upon the Amalgamation, these Instruments, orders and regulation service agreements will apply to the New SRO by operation of law. Transitional Jurisdiction The New SRO will have jurisdiction over the conduct of Dealer Members and over the trading conduct of all members, users and subscribers of Marketplace Members, including for investigations or enforcement actions in progress at the Effective Time or related to actions which took place prior to the Effective Time. Capacity and Integrity of Systems The New SRO plans to perform its regulatory functions using the information technology systems currently used by IIROC and the MFDA, including those systems currently provided to IIROC and the MFDA by various external service providers. Relevant existing service agreements between IIROC and the MFDA and their respective service providers will continue with the New SRO. The New SRO will perform its market surveillance regulation function using the systems currently used by IIROC. Capacity Planning and Management The New SRO will ensure that information technology systems capacity planning is undertaken on a regular basis and system upgrades, processing capability, storage, connectivity and backup are managed carefully. With respect to the market surveillance regulation functions, the New SRO will continue the IIROC practice of regularly forecasting its expected data volumes. Development and Testing Methodologies The New SRO will use development and testing cycles that do not interfere with the normal operation of its production systems. The New SRO will regularly review and update its development and testing methodologies, either internally or through its service providers. System Vulnerability

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The level of exposure to threats and system vulnerability for the New SRO will vary based on whether the system is critical or not. Sensitive regulatory data will be kept secure and confidential, within the organization and in relation to service providers. The New SRO will continue the MFDA and IIROC’s practice of continuous vulnerability scanning and at least annually engage a third party to conduct an independent assessment of its potential vulnerability to internal and external threats. The New SRO will continue to ensure that relevant service providers implement appropriate confidentiality and security provisions. Internal Controls The New SRO will, at least annually, engage a third-party to complete an assessment of the New SRO’s internal controls for critical systems in accordance with established audit procedures and standards. Contingency Planning, Disaster Recovery & Business Continuity Plans IIROC and the MFDA have written contingency, business continuity and disaster recovery plans, which include specific criteria for all critical system applications. Upon the Amalgamation, the New SRO plans to continue to operate under these and/or new consolidated plans. As with IIROC, all New SRO market surveillance systems will have full redundancy with two live sites running in parallel and personnel backup in multiple offices of the New SRO. Rules Initially, it is the intention of the New SRO to adopt and administer interim rules which will incorporate the pre-amalgamation regulatory requirements contained in the rules and policies of IIROC and the by-laws, rules and policies of the MFDA (collectively, the “Interim Rules”). Members can expect that their activities and conduct as Members of the New SRO will continue to be regulated in the manner to which they are accustomed based on their current securities registration status, pursuant to the New SRO’s Interim Rules. The Interim Rules will include: (i) the Investment Dealer and Partially Consolidated Rules, (ii) the UMIR and (iii) the Mutual Fund Dealer Rules. The Interim Rules, which were subject to public consideration and comment, will also include new Rules to: (i) eliminate IIROC District Council regulatory approval authorities while maintaining their advisory role, (ii) permit firms registered as both an investment dealer and a mutual fund dealer (dual-registered firm) to employ mutual funds only licensed individuals without having to upgrade their proficiencies to those required of a securities licensed individual, (iii) permit introducing/carrying broker arrangements between mutual fund dealers and investment dealers, (iv) enable mutual-funds-only registered individuals employed by a dual-registered firm to be able to continue to direct commission where permitted by local securities legislation, (v) facilitate the timely movement of accounts between affiliated firms (including situations where accounts are being moved to a dual-registered Affiliated Firm) without requiring the completion
of new account documentation, and (vi) allow for a sufficient Dealer Member implementation period once the names of the New SRO and investor protection fund are determined. The New SRO will review the Mutual Fund Dealer Rules, Investment Dealer and Partially Consolidated Rules and the UMIR in order to propose changes to harmonize rules, policies and related processes. A draft of the Interim Rules is attached hereto as Schedule 2.

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A consolidated rule book will be developed, informed by a comprehensive policy plan for a regulatory approach reflecting the general principle that like activities will be regulated in like manner. The intention is to find convergence on a risk based and consistently applied approach to principles-based rules, compliance and enforcement. The process for development of the consolidated rule book (and new policy development generally) will be informed by consultations, following existing, established proposed rule review and approval mechanisms including the assessment of public comments to determine the needs of the Members of the New SRO and the public interest. The intention is to give the New SRO Members and the public sufficient time and opportunity to engage with the New SRO personnel to respond to any new rule proposals following a consultation period. The voice of Members will be key. Post-amalgamation proposals to replace or amend the Interim Rules would be submitted to the Recognizing Regulators for approval in accordance with the procedures established in the Memorandum of Understanding among Recognizing Regulators regarding oversight of the New SRO, on terms and conditions reflective of the Position Paper, between the New SRO, as a selfregulatory organization and RSP, and the applicable Recognizing Regulators. The New SRO will, subject to the terms and conditions of the Recognition Order and the jurisdiction and oversight of the relevant Recognizing Regulators, establish rules, regulations or policies that promote the public interest, and are designed to:
• ensure compliance with applicable securities legislation,
• prevent fraudulent and manipulative acts and practices,
• promote just and equitable principles of trade and the duty of Dealer Members to act fairly,
honestly and in good faith with their clients,
• promote Member education,
• foster cooperation and coordination with entities engaged in regulating, clearing, settling,
processing information with respect to, and facilitating transactions in, securities and derivatives,
• foster fair, equitable and ethical business standards and practices,
• promote access to advice in different geographic zones, including the servicing of clients in
both urban and rural settings,
• allow Members to develop and make use of technological advancements to achieve greater
efficiencies and productivity, while mitigating any risks to the investors and the public,
• promote the protection of investors,
• are scalable and proportionate to different types and sizes of Dealer Member firms and their
respective business models, and
• provide for appropriate discipline of those whose conduct it regulates.
The Interim Rules, and any replacement of thereof, will not unreasonably discriminate among those subject to its regulation nor impose any unnecessary burden or constraint on competition or innovation. The Interim Rules and the administration thereof will not impose costs or restrictions on the activities of market participants that are disproportionate or contrary to the public interest.

16
Continuing Education
The MFDA and IIROC continuing education requirements will continue to apply to Dealer Members of the New SRO who are registered as mutual fund dealers and investment dealers. The new category of mutual-funds-only licensed individuals employed by a dual-registered firm will be subject to the same requirements as dealing representatives registered with a Mutual Fund Dealer. The New SRO will work towards the development and implementation of a harmonized continuing education program for all Dealer Members that is fair, consistent and proportionate. Financial Statements The New SRO will provide to the Recognizing Regulators its financial statements and other financial reporting in accordance with the requirements of its Recognition Order, including audited annual financial statements. Discipline Process The New SRO plans to base its rules for the discipline of persons or companies subject to its regulation on those of the MFDA and IIROC. The process for disciplining Members and others will be fair, transparent and will provide for due process. Any reviewable decision of the New SRO, including any disciplinary or enforcement decision, will be reviewable by the Recognizing Regulators or other designated reviewing bodies as provided in applicable securities legislation having appropriate jurisdiction. Québec Requirements For mutual fund dealers registered in Québec (“Québec MFDs”), the New SRO’s regulatory requirements will not apply, with the exception of provisions required to ensure the smooth operation of the New SRO, to their Québec activities. Québec MFDs will benefit from a transition period in order to integrate their Québec activities with the New SRO. Transition Period During the transition period, activities carried out in Québec by Québec MFDs will be required to meet the requirements in Regulation 31-103 – Registration Requirements, Exemptions and Ongoing Registrant Obligations and applicable Québec legislation. Québec MFDs dealing representatives will continue to be exempt from the New SRO’s continuing education requirements for their activities in Québec as well as discipline since the Chambre de la sécurité financière (“CSF”) is responsible for those activities in Québec. As well, during this transition period, the New SRO will meet the requirements provided in the
Appendix, which also forms part of the Québec Recognition Order. Québec MFDs will participate
as members in the consultations and committees that will be constituted by the New SRO. Complaints and inquiries relating to Québec MFDs and their registered individuals will be referred to staff of the New SRO in Montréal for their Québec activities for transfer to the AMF or the CSF. Fees payable by Québec MFDs to the New SRO shall be prorated to the services offered to them by the New SRO.

17
Other Québec Specifics
The New SRO will comply fully with section 69 of the Act respecting the regulation of the financial sector, CQLR c. E-6.1. The power to make decisions relating to the supervision of the New SRO’s activities in Québec will be exercised mainly by persons residing in Québec. The members of the hearing panels of the New SRO in respect of matters involving Québec residents will be from Québec. The New SRO Québec MFDs will be able to participate as Members in the consultations and committees that will be constituted by it. Information Sharing and Regulatory Cooperation The New SRO will provide all necessary notices and information to each Recognizing Regulator except as may be otherwise indicated in an applicable recognition order or directions provided by such Recognizing Regulator. As specified in the Recognition Order, the New SRO will, subject to applicable law (including privacy law), share information with the Recognizing Regulators, and may, as appropriate, proactively and transparently share information with exchanges, SROs, clearing agencies, financial intelligence or law enforcement agencies or authorities, banking, financial services or other financial regulatory authorities and investor protection or compensation funds. The New SRO will continue to abide by the terms of the information-sharing agreements previously entered into by IIROC and the MFDA, and enter into new information-sharing agreements where appropriate. Surrender or Revocation of Existing IIROC and MFDA Recognition Orders In addition to an Application for recognition, kindly also consider this joint letter a request by the SROs for the CSA to accept the voluntarily surrender of, or revoke, the existing IIROC and MFDA Recognition Orders, in accordance with securities legislation applicable to the Recognizing Regulators. The voluntary surrender or revocation of the recognition orders will not be prejudicial to the public interest; specifically the interests of the members of the organizations and the public are sufficiently protected. The SROs believe this will assist full public transparency. There is no need to continue the existing recognition orders post-Amalgamation, as they will be fully replaced by the New SRO RO once it is effective. Sincerely, Andrew J. Kriegler Karen L. McGuinness President and Chief Executive Officer President and Chief Executive Officer IIROC MFDA

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Attachments:
Schedule 1 – By-law No. 1 of New SRO
a. Clean b. Blacklined to May 12, 2022 publication
Schedule 2 – Interim Rules of New SRO
i. Investment Dealer and Partially Consolidated Rules
a. Clean b. Blacklined to May 12, 2022 publication
ii. Investment Dealer Form 1
a. Clean b. Blacklined to existing IIROC Form 1
iii. Mutual Fund Dealer Rules
a. Clean b. Blacklined to May 12, 2022 Publication
iv. Mutual Fund Dealer Form 1 (clean only, no changes since May 12, 2022 publication)
v. Universal Market Integrity Rules
a. Clean b. Blacklined to May 12, 2022 Publication
Schedule 3 – Interim Fee Model Guidelines Applicable to Investment Dealer Members and
Marketplace Members a. Clean b. Blacklined to existing IIROC Fee Model Guidelines
Schedule 4 – Terms of Reference for the New SRO Investor Advisory Panel
a. Clean b. Blacklined to May 12, 2022 publication
Appendix – Québec Requirements

19
APPENDIX
QUÉBEC REQUIREMENTS
(Unofficial Translation) a) New SRO shall maintain a Québec district, which shall have clearly defined responsibilities in the matter of regulation, membership, sales compliance, financial compliance, markets monitoring, trade desk reviews and enforcement of the rules applicable to its Dealer Members, Market Members and Approved Persons. b) The Québec district shall maintain a place of business in Québec, and any decision concerning the supervision of its self-regulatory activities and the Dealer Members, Market Members and Approved Persons of Québec shall be made principally by persons residing in Québec. c) The most senior officer responsible for the Québec district shall report directly to the CEO of New SRO. d) The Québec district shall offer its members and the investing public all necessary services in French so as to provide a quality of service equivalent to that offered in English in other offices of New SRO. e) The Québec district shall ensure that French is the language used in all communications and correspondence with the AMF. f) New SRO shall obtain the prior approval of the AMF before making a change to the organizational and administrative structure of the Québec district that might have an impact on its functions and activities in Québec, and on the exercise of its decision-making powers, notably as regards the financial, human and material resources allocated to the Québec district. g) The Québec district shall have a separate budget which must be approved by the Board. The latter shall allocate to the Québec district the necessary resources and support to fulfil its duties, powers and activities, including material, informational and financial support, and human resources support. h) The Québec district shall report to the AMF biannually on its staffing of each position, specifying the positions that are authorized, filled and vacant, as well as on major staff reductions or changes, for each position. i) The Québec district shall report to the AMF upon request, through its most senior officer responsible for the Québec district, on the manner in which it exercises its functions and powers and performs its activities. j) New SRO recognizes that the AMF, pursuant to the Act respecting the regulation of the financial sector, CQLR c. E-6.1 (“LESF”) and the Québec Securities Act, CQLR, c. V-1.1 (“LVM”), has established a specific regulatory framework for the management of complaints and disputes (“LESF/LVM process”). New SRO recognizes that the complaints and disputes management process stipulated in its rules or in any other document shall not have the effect of limiting the application of the LESF/LVM process. New SRO undertakes to comply with and promote the LESF/LVM process, including the terms and conditions and time frames provided in the LESF and LVM and to cooperate fully in regard to its administration. k) In the event of an incompatibility or a divergence between the LESF/LVM process and that of New SRO, the LESF/LVM
process shall prevail.

20 l) It is expressly understood that the coexistence of the LESF/LVM process and that of New SRO, as provided in paragraph j) above, shall not constitute, either directly or indirectly, an agreement relative to the examination of complaints made by persons who are dissatisfied with their examination or the result of said examination, or to the mediation between interested parties pursuant to section 33.1 of the LESF. m) New SRO recognizes and undertakes to respect the applicable laws of Québec. n) New SRO shall ensure that firms registered as mutual fund dealers in Québec (« MFDs registered in Québec ») benefit from an adequate transition period, the duration of which shall be agreed upon with the AMF, for their integration with New SRO in regard to their activities in Québec. o) During the transition period, New SRO for the activities carried out by MFDs in Québec: i. shall ensure that its bylaws, rules, decisions, notices or other instruments that do not apply to MFDs registered in Québec, with the exception of provisions required to ensure the smooth operation of New SRO, as well as the implementation of the requirements stipulated in paragraph n) and in subparagraphs ii and iii of this paragraph o), ii. shall authorize MFDs registered in Québec to participate as members in the consultations of New SRO and on the committees that the latter shall create, iii. shall ensure that MFDs registered in Québec pay New SRO a reduced fee, the amount of which shall be proportional to the services offered to them. p) New SRO shall obtain the prior approval of the AMF before making any change to its bylaws, rules, decisions, notices or other instruments concerning elements that are subject to the requirements stipulated in paragraphs n) and o) with the goal of ending or changing the conditions applicable to the transitional period, or before taking any action that might have the effect of forcing an MFDs registered in Québec to subscribe to the guarantee fund of New SRO for its activities in Québec.

BY-LAW NO. 1 being a General By-law of
NEW SELF-REGULATORY ORGANIZATION OF CANADA
(hereinafter referred to as the “Corporation”)

TABLE OF CONTENTS
Page

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ARTICLE 1 INTERPRETATION............................................................................................. 5
Section 1.1 Definitions.................................................................................................. 5
Section 1.2 Interpretation.............................................................................................. 8
Section 1.3 Meaning of Independence.......................................................................... 9
ARTICLE 2 AFFAIRS OF THE CORPORATION............................................................... 11
Section 2.1 Public Interest Mandate ........................................................................... 11
Section 2.2 Seal........................................................................................................... 12
Section 2.3 Head Office.............................................................................................. 12
Section 2.4 Financial Year.......................................................................................... 12
Section 2.5 Execution of Instruments......................................................................... 12
Section 2.6 Banking Arrangements ............................................................................ 12
Section 2.7 Voting Rights In Other Bodies Corporate ............................................... 12
Section 2.8 Divisions.................................................................................................. 13
Section 2.9 Quebec Activities..................................................................................... 13
ARTICLE 3 CONDITIONS OF MEMBERSHIP .................................................................. 13
Section 3.1 Entitlement............................................................................................... 13
Section 3.2 Dealer Members....................................................................................... 14
Section 3.3 Marketplace Members ............................................................................. 14
Section 3.4 Fees.......................................................................................................... 14
Section 3.5 Process for Approval for Membership of Dealer Members..................... 14
Section 3.6 Acceptance of Membership for Marketplace Members........................... 17
Section 3.7 Amalgamation of Members ..................................................................... 17
Section 3.8 Dealer Member Resignation .................................................................... 17
Section 3.9 Dealer Member Removal......................................................................... 17
Section 3.10 Transferability, Reorganizations.............................................................. 18
Section 3.11 Ceasing to Carry on Business.................................................................. 18
Section 3.12 Ownership................................................................................................ 18
ARTICLE 4 MEMBERS’ MEETINGS................................................................................... 18
Section 4.1 Annual Meeting ....................................................................................... 18
Section 4.2 Special or General Meetings.................................................................... 18
Section 4.3 Quorum .................................................................................................... 19
Section 4.4 List of Members Entitled to Notice ......................................................... 19
Section 4.5 Notice....................................................................................................... 19
Section 4.6 Absentee Voting....................................................................................... 19
Section 4.7 Votes........................................................................................................ 20
Section 4.8 Participation in Meetings by Telephonic or Electronic Means................ 21
Section 4.9 Chair, Secretary and Scrutineers.............................................................. 21
Section 4.10 Persons Entitled to be Present.................................................................. 21
Section 4.11 Show of Hands......................................................................................... 22

TABLE OF CONTENTS
(continued)
Page

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Section 4.12 Ballots...................................................................................................... 22
Section 4.13 Adjournment ............................................................................................ 22
ARTICLE 5 BOARD OF DIRECTORS ................................................................................. 22
Section 5.1 Number and Qualifications...................................................................... 22
Section 5.2 Director Representation ........................................................................... 22
Section 5.3 Recommendation of Director Nominees for Election ............................. 23
Section 5.4 Election and Term.................................................................................... 23
Section 5.5 Vacancies................................................................................................. 24
Section 5.6 Filling Vacancies ..................................................................................... 24
Section 5.7 Remuneration of Directors....................................................................... 25
Section 5.8 Release of Claims .................................................................................... 25
ARTICLE 6 POWERS OF DIRECTORS............................................................................... 25
Section 6.1 Administer Affairs................................................................................... 25
Section 6.2 Expenditures ............................................................................................ 25
Section 6.3 Borrowing Power..................................................................................... 25
Section 6.4 Conflict of Interest ................................................................................... 26
ARTICLE 7 DIRECTORS’ MEETINGS................................................................................ 27
Section 7.1 Place of Meeting ...................................................................................... 27
Section 7.2 Calling of Meetings.................................................................................. 27
Section 7.3 Notice of Meetings................................................................................... 27
Section 7.4 Adjourned Meeting .................................................................................. 27
Section 7.5 Regular Meetings..................................................................................... 27
Section 7.6 Chair of Meetings of the Board ............................................................... 27
Section 7.7 Voting Rights........................................................................................... 28
Section 7.8 Participation in Meetings by Telephonic or Electronic Means................ 28
Section 7.9 Quorum .................................................................................................... 28
Section 7.10 Minutes of Meetings................................................................................ 28
ARTICLE 8 OFFICERS........................................................................................................... 28
Section 8.1 Appointment ............................................................................................ 28
Section 8.2 Chair and Vice-Chair of the Board .......................................................... 29
Section 8.3 President and Chief Executive Officer .................................................... 29
Section 8.4 Vice-President.......................................................................................... 29
Section 8.5 Secretary .................................................................................................. 29
Section 8.6 Powers and Duties of Other Officers....................................................... 29
Section 8.7 Variation of Powers and Duties............................................................... 29
Section 8.8 Term of Office ......................................................................................... 29
Section 8.9 Terms of Employment and Remuneration............................................... 30
Section 8.10 Conflict of Interest ................................................................................... 30

TABLE OF CONTENTS
(continued)
Page

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Section 8.11 Agents and Attorneys............................................................................... 30
ARTICLE 9 PROTECTION OF DIRECTORS AND OTHERS.......................................... 30
Section 9.1 Limitation of Liability.............................................................................. 30
Section 9.2 Indemnities to Directors and Others........................................................ 30
Section 9.3 Insurance .................................................................................................. 31
ARTICLE 10 REGIONAL COUNCILS ................................................................................. 31
Section 10.1 Designation of Regions............................................................................ 31
Section 10.2 Composition of Regional Councils.......................................................... 32
Section 10.3 Duties and Powers.................................................................................... 32
Section 10.4 Meetings of Regional Members............................................................... 32
ARTICLE 11 DISTRICT HEARING COMMITTEES......................................................... 32
Section 11.1 Designation of Districts ........................................................................... 32
Section 11.2 District Hearing Committees ................................................................... 33
ARTICLE 12 COMMITTEES AND ADVISORY BODIES ................................................. 33
Section 12.1 Committees of the Board ......................................................................... 33
Section 12.2 Governance Committee ........................................................................... 34
Section 12.3 Finance, Audit and Risk Committee........................................................ 34
Section 12.4 Human Resources and Pension Committee ............................................. 34
Section 12.5 Appointments Committee ........................................................................ 34
Section 12.6 Committee Meetings................................................................................ 34
Section 12.7 Advisory Bodies....................................................................................... 34
Section 12.8 Procedure ................................................................................................. 35
ARTICLE 13 NOTICES ........................................................................................................... 35
Section 13.1 Method of Giving Notices ....................................................................... 35
Section 13.2 Undelivered Notices................................................................................. 35
Section 13.3 Omissions and Errors............................................................................... 35
Section 13.4 Waiver of Notice...................................................................................... 36
ARTICLE 14 RULES AND OTHER INSTRUMENTS ........................................................ 36
Section 14.1 Power to Make, Amend or Repeal Rules................................................. 36
Section 14.2 Forms and Other Instruments................................................................... 36
Section 14.3 Use of Restricted Fund............................................................................. 36
Section 14.4 Investor Protection Fund.......................................................................... 36
Section 14.5 Notices, Guidelines, Etc........................................................................... 37
Section 14.6 Continuing Jurisdiction and Discipline and Enforcement under the
Rules ........................................................................................................ 37

TABLE OF CONTENTS
(continued)
Page

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Section 14.7 Exchange of Information, Agreements.................................................... 38
ARTICLE 15 NO ACTIONS.................................................................................................... 38
Section 15.1 No Actions Against the Corporation........................................................ 38
Section 15.2 No Liabilities Arising in Respect of Entities in which Corporation
Holds an Interest ...................................................................................... 39
ARTICLE 16 USE OF NAME OR LOGO: LIABILITIES: CLAIMS ................................ 39
Section 16.1 Use of Name ............................................................................................ 39
Section 16.2 Liabilities................................................................................................. 39
Section 16.3 Claims...................................................................................................... 39
ARTICLE 17 TRANSITION PERIODS FOR BY-LAWS AND RULES ............................ 39
Section 17.1 Transition Periods for By-laws and Rules............................................... 39
ARTICLE 18 AMENDMENT, REPEAL, ENACTMENT OF BY-LAWS.......................... 40
Section 18.1 By-laws.................................................................................................... 40
ARTICLE 19 AUDITOR .......................................................................................................... 40
Section 19.1 Auditor..................................................................................................... 40
ARTICLE 20 BOOKS AND RECORDS................................................................................. 41
Section 20.1 Books and Records .................................................................................. 41

ARTICLE 1
INTERPRETATION
Section 1.1 Definitions
In this By-law, unless the context otherwise specifies or requires:
“Act” means the Canada Not-for-profit Corporations Act, S.C. 2009, c. C-23 and the regulations thereto, as from time to time amended and every statute that may be substituted therefor and, in the case of such substitution, any references in the By-laws to provisions of the Act shall be read as references to the substituted provisions therefor in the new statute or statutes. “affiliated entity” has the meaning ascribed to it in subsection 1.3(1) of National Instrument 52- 110 Audit Committees. “Amalgamation” means the amalgamation of IIROC and the MFDA to form the Corporation pursuant to section 204 of the Act. “Approved Person” means “Approved Person” within the meaning of the relevant Rules. “Articles” means the articles of amalgamation of the Corporation and includes any articles of amendment. “Associate”, where used to indicate a relationship with any person, means:
(a) any company of which such person beneficially owns, directly or indirectly, voting securities carrying more than ten percent (10%) of the voting rights attached to all voting securities of the company for the time being outstanding; (b) a partner of that person; (c) any trust or estate in which such person has a substantial beneficial interest or as to which such person serves as trustee or in a similar capacity; (d) any relative of that person who resides in the same home as that person; (e) any person who resides in the same home as the person and to whom that person is married or with whom that person is living in a conjugal relationship outside of marriage; or (f) any relative of a person mentioned in clause (e) above, who has the same home as that person. “auditor” of the Corporation means a public accountant, as defined in the Act, appointed for the Corporation. “By-laws” means this By-law and any other by-law of the Corporation from time to time in force and effect.

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“Board” means the Board of Directors of the Corporation.
“Chair” means the Independent Director elected by the Board to act as its chair. “control” has the meaning ascribed to it in section 1.4 of National Instrument 45-106 Prospectus Exemptions. “Corporation” means New Self-Regulatory Organization of Canada. “Dealer Member” means a Member that is registered as an investment dealer or a mutual fund dealer in accordance with securities legislation. “Director” means a member of the Board. “District” means a geographic area in Canada designated as a district of the Corporation pursuant to Section 11.1. “District Hearing Committee” means each of the hearing committees created in accordance with
Article 11.
“executive officer” has the meaning ascribed to it in section 1.1 of National Instrument 52-110 Audit Committees. “Form” means a form prescribed or provided for by the By-Laws or the Rules. “IIROC” means the Investment Industry Regulatory Organization of Canada, a predecessor corporation to the Corporation. “immediate family member” has the meaning ascribed to it in section 1.1 of National Instrument 52-110 Audit Committees. “Indemnified Party” means each Protected Party and any other person who has undertaken or is about to undertake any liability on behalf of the Corporation, or any entity controlled by it, which the Corporation determines to indemnify in respect of such liability and their respective heirs, executors, administrators, and estates and effects, respectively. “Independent Director” means a Director who is Independent within the meaning of Section 1.3. “Industry Agreement” means an agreement made between the Corporation and an IPF, as the same may be amended or replaced from time to time. “Information Processor Recognition Orders” means the recognition order obtained from the Autorité des marchés financiers and the designation orders and undertakings governing the Corporation’s designation as information processor for government and corporate debt securities. “IPF” means the Canadian Investor Protection Fund or the MFDA Investor Protection Corporation or any of their successors.
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“Marketplace” means:
(a) a recognized exchange or a commodity futures exchange registered in a jurisdiction of Canada; (b) a recognized quotation and trade reporting system; or (c) a person or company not included in clause (a) or (b) above that facilitates the trading of securities or derivatives in a jurisdiction of Canada; and (i) constitutes, maintains or provides a market or facility for bringing together buyers and sellers of securities or derivatives; (ii) brings together the orders for securities or derivatives of multiple buyers and sellers; and (iii) uses established non-discretionary methods under which the orders interact with each other, and the buyers and sellers entering the orders agree to the terms of a trade. “Marketplace Member” means a Member that is a Marketplace. “Member” means a person admitted to membership in the Corporation or who was a member of IIROC or the MFDA at the time of the Amalgamation, and who has not ceased, resigned or terminated membership in the Corporation in accordance with the provisions of Article 3. “MFDA” means the Mutual Fund Dealers Association of Canada, a predecessor corporation to the Corporation. “National Council” means the national council created in accordance with Article 10. “Non-Independent Director” means a Director who is not an Independent Director. “President” means the president and chief executive officer of the Corporation appointed in accordance with Section 8.3. “Protected Party” means every current and former Director, officer, employee, committee member (whether a committee of the Board or other committee of the Corporation), and his or her heirs, executors, administrators, estate and effects or any other person acting on behalf of the Corporation. “Recognition Orders” means the recognition orders for the Corporation issued and approved by the Recognizing Regulators, recognizing the Corporation as a self-regulatory organization. “Recognizing Regulators” means (i) the Alberta Securities Commission; (ii) the Autorité des marchés financiers; (iii) the British Columbia Securities Commission; (iv) the Manitoba Securities Commission; (v) the Financial and Consumer Services Commission (New Brunswick); (vi) Office of the Superintendent of Securities, Northwest Territories; (vii) Nova Scotia Securities
8 -
Commission; (viii) Office of the Superintendent of Securities, Digital Government and Services, Newfoundland and Labrador; (ix) Office of the Superintendent of Securities, Nunavut; (x) the Ontario Securities Commission; (xi) Prince Edward Island Office of the Superintendent of Securities; (xii) Financial and Consumer Affairs Authority of Saskatchewan; and (xiii) Office of the Yukon Superintendent of Securities. “Region” means a geographic area in Canada designated as a region of the Corporation pursuant to Section 10.1. “Regional Council” means each of those councils created in accordance with Article 10. “Regulated Persons” means persons who are or were formerly (i) Dealer Members, including for greater certainty, members of the Corporation’s predecessors, (ii) members, users or subscribers of or to, or other entities that are allowed to trade directly on, Marketplaces for which the Corporation is the regulation services provider, (iii) the respective Approved Persons and other representatives of those persons set out in subsection (i) and (ii) , and (iv) other persons subject to the jurisdiction of the Corporation. “Restricted Fund” means monetary sanctions received by the Corporation. “Rules” means the Rules made pursuant to Section 14.1. “Significant Interest” means in respect of any person the holding, directly or indirectly, of the securities of such person carrying in aggregate 10% or more of the voting rights attached to all of the person’s outstanding voting securities. “Vice-Chair” means a Director elected by the Board to act as its vice-chair.
Section 1.2 Interpretation
(1) Unless otherwise defined or interpreted in this By-law or the Rules, every term used in this By-law or the Rules that is:
(a) defined in subsection 1.1(3) of National Instrument 14-101 – Definitions has the meaning ascribed to it in that subsection; and (b) defined or interpreted in National Instrument 21-101 – Marketplace Operation has the meaning ascribed to it in that National Instrument. (2) The provisions of this By-law and the Rules are subject to applicable laws. Subject to the By-laws and the Rules, any reference in this By-law or the Rules to a statute or a National Instrument refers to such statute or National Instrument and all rules and regulations made under it, as it may have been or may from time to time be amended or re-enacted. (3) In this By-law and the Rules and in all other By-laws hereafter passed and the Rules from time to time, unless the context otherwise requires, words importing the singular number or the masculine gender shall include the plural number or the feminine gender, as the case may be, and vice versa, and references to persons shall include, individuals, corporations,
9 -
limited partnerships, general partnerships, joint ventures, associations, companies, trusts, societies or other entities, organizations and syndicates whether incorporated or not, trustees, executors, or other legal personal representatives, and any government or agency thereof. In the event of any dispute as to the meaning of the Articles, By-laws or Rules, the interpretation of the Board shall be final and conclusive.
Section 1.3 Meaning of Independence
(1) The term “Independent Director” means a Director who has no direct or indirect material relationship with the Corporation or a Member. (2) For the purposes of subsection (1), a “material relationship” is a relationship which, having regard to all relevant circumstances, could interfere with or be reasonably perceived to interfere with the exercise of a Director’s independent judgment. (3) For greater certainty, relationships with the Corporation described in this Section 1.3 include relationships with the Corporation’s predecessors or affiliated entities. (4) Despite subsection (1), the following individuals are considered to have a material relationship with the Corporation or a Member:
(a) an individual who is, or has been within the last three years, an employee or executive officer of the Corporation; (b) an individual whose immediate family member is, or has been within the last three years, an executive officer or non-independent director of the Corporation; (c) an individual who, or whose immediate family member, is or has been within the last three years, an executive officer of an entity if any of the Corporation’s current executive officers serves or served at that same time on the entity’s compensation committee; (d) an individual who received, or whose immediate family member who is employed as an executive officer of the Corporation received, more than $75,000 in direct compensation from the Corporation during any 12 month period within the last three years; (e) an individual who is, or has been within the last three years, a partner, director, officer, employee, or person acting in a similar capacity of:
(i) a Member,
(ii) an Associate of a Member, or
(iii) an affiliated entity of a Member, and
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(f) an individual who is, or has been within the last three years, an Associate of a partner, director, officer, employee, or person acting in a similar capacity of a Member. (5) For the purposes of paragraph (3)(d), direct compensation does not include:
(a) remuneration for acting as a member of the Board or of any Board committee of the Corporation, and (b) the receipt of fixed amounts of compensation under a retirement plan (including deferred compensation) for prior service with the Corporation if the compensation is not contingent in any way on continued service. (6) Despite subsection (3), an individual will ordinarily not be considered to have a material relationship with the Corporation solely because the individual or his or her immediate family member:
(a) has previously acted as an interim chief executive officer of the Corporation, or (b) acts, or has previously acted, as a chair or vice-chair of the Board or of any Board committee of the Corporation on a part-time basis. (7) If, despite the three-year cooling-off period described in sections 3(e) and (f), the nature or duration of an individual’s relationship with a Member, its Associates, or its affiliated entities could be reasonably expected to interfere with the exercise of that individual’s independent judgment, then a sufficiently longer cooling-off period from the Member, Associate, and affiliated entity is required for that individual to be considered an Independent Director. (8) Despite any determination made under sections (2) to (6), an individual is considered to have a material relationship with the Corporation if the individual:
(a) accepts, directly or indirectly, any consulting, advisory or other compensatory fee from the Corporation or any subsidiary entity of the Corporation, other than as remuneration for acting in his or her capacity as a member of the Board or any Board committee, or as a part-time chair or vice-chair of the Board or any Board committee; or (b) is an affiliated entity of the Corporation or any of its subsidiary entities. (9) For the purposes of section (7), the indirect acceptance by an individual of any consulting, advisory or other compensatory fee includes acceptance of a fee by:
(a) an individual’s spouse, minor child or stepchild, or a child or stepchild who shares the individual’s home; or (b) an entity in which such individual is a partner, member, an officer such as a managing director occupying a comparable position or executive officer, or
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occupies a similar position (except limited partners, non-managing members and those occupying similar positions who, in each case, have no active role in providing services to the entity) and which provides accounting, consulting, legal, investment banking or financial advisory services to the Corporation or any subsidiary entity of the Corporation. (10) For the purposes of section (7), compensatory fees do not include the receipt of fixed amounts of compensation under a retirement plan (including deferred compensation) for prior service with the Corporation if the compensation is not contingent in any way on continued service.
ARTICLE 2
AFFAIRS OF THE CORPORATION
Section 2.1 Public Interest Mandate
The Corporation shall act in the public interest by, without limitation:
(a) protecting investors from unfair, improper, or fraudulent practices by its Members; (b) fostering fair and efficient capital markets and promoting market integrity; (c) fostering public confidence in capital markets; (d) facilitating investor education; (e) administering a fair, consistent and proportionate continuing education program for all Dealer Members and applicable Approved Persons; (f) accommodating innovation and ensuring flexibility and responsiveness to the future needs of the evolving capital markets, without compromising investor protection; (g) providing effective market surveillance; (h) fostering efficient and effective cooperation and coordination with each securities regulatory authority to ensure regulatory alignment; (i) facilitating access to advice and products for investors of different demographics; (j) recognizing and incorporating regional considerations and interests from across Canada; (k) facilitating meaningful consultation and input from all types of Members and ensuring that investor perspectives are factored into the development and implementation of regulatory policies; (l) administering robust compliance and enforcement processes;
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(m) ensuring that the complaint handling and resolution processes of the Corporation and the complaint handling requirements the Corporation imposes on its Members are accessible to, and provide clear understandable guidance for, complainants, and deal with complaints fairly and efficiently; (n) contributing to financial stability, under the direction of the securities regulatory authorities; and (o) administering effective governance and accountability to all stakeholders and preventing regulatory capture.
Section 2.2 Seal
The Corporation may adopt a seal by resolution of the Board.
Section 2.3 Head Office
Until changed in accordance with the Act, the head office of the Corporation shall be in the City of Toronto, in the Province of Ontario.
Section 2.4 Financial Year
Until changed by the Board, the financial year of the Corporation shall end on the last day of March in each year.
Section 2.5 Execution of Instruments
Transfers, assignments, contracts, obligations, certificates and other instruments may be signed on behalf of the Corporation by any two officers of the Corporation appointed in accordance with Article 8 of this By-law. In addition, the Board may from time to time direct the manner in which and the person or persons by whom any particular instrument or class of instruments may or shall be signed. Any signing officer may affix the corporate seal to any instrument requiring the same, but it is not necessary to bind the Corporation.
Section 2.6 Banking Arrangements
The banking arrangements of the Corporation including, without limitation, the borrowing of money and the giving of security therefor, shall be transacted with such banks, trust companies or other bodies corporate or organizations as may from time to time be designated by or under the authority of the Board. Such banking business or any part thereof shall be transacted under such agreements, instructions and delegations of powers as the Board may from time to time prescribe or authorize.
Section 2.7 Voting Rights In Other Bodies Corporate
Any two officers of the Corporation appointed in accordance with Article 8 of this By-law may execute and deliver proxies and arrange for the issuance of voting certificates or other evidence of the right to exercise the voting rights attaching to any securities held by the
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Corporation. Such instruments, certificates or other evidence shall be in favour of such person or persons as may be determined by the officers executing such proxies or arranging for the issuance of voting certificates or such other evidence of the right to exercise such voting rights. In addition, the Board may from time to time direct the manner in which and the person or persons by whom any particular voting rights or class of voting rights may or shall be exercised.
Section 2.8 Divisions
In addition to any other powers of the Board, the Board may, subject to the terms of the Recognition Orders and without further approval, cause the operations of the Corporation or any
part thereof to be divided or segregated into one or more divisions upon such basis, including
without limitation, character or type of operations, or geographical regions as the Board may consider appropriate in each case. From time to time the Board, or if authorized by the Board, the President, may authorize, upon such basis as may be considered appropriate in each case:
(a) Sub-Division and Consolidation: The further division of the operations of any such division into sub-units and the consolidation of the operations of any such divisions and sub-units; (b) Name: The designation of any such division or sub-unit by, and the carrying on of the operations of any such division or sub-unit, under a name other than the name of the Corporation; provided that the Corporation shall set out its name in legible characters in all contracts, invoices, negotiable instruments and orders for goods or services issued or made by or on behalf of the Corporation; and (c) Officers: The appointment of officers for any such division or sub-unit, the determination of their powers and duties, and the removal of any such officer so appointed without prejudice to such officer’s rights under any employment contract or in law, provided that any such officers shall not, as such, be officers of the Corporation, unless expressly designated as such in accordance with Article 8 of this By-law.
Section 2.9 Quebec Activities
The constating documents, By-laws and Rules of the Corporation will allow that the power to make decisions relating to the supervision of the Corporation’s activities in Quebec will be exercised mainly by persons residing in Quebec.
ARTICLE 3
CONDITIONS OF MEMBERSHIP
Section 3.1 Entitlement
The Board shall, in its discretion, decide (and may delegate to a committee of the Board or an officer of the Corporation the authority to so decide) upon all issues pertaining to eligibility for membership in accordance with the By-laws and Rules of the Corporation. The Board may, by the affirmative vote of a majority of the Directors at a meeting of the Board and confirmed by the Members in accordance with Article 18, amend the By-law and Articles to add additional classes
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of Members and determine the rights and obligations pertaining to any added class. Initially there shall be two classes of Members, being (i) Marketplace Members; and (ii) Dealer Members.
Section 3.2 Dealer Members
Subject to the By-laws, the Articles, and the Act, Dealer Members shall be entitled to the rights and entitlements, and shall be subject to the obligations, attaching to all Members.
Section 3.3 Marketplace Members
Subject to the By-laws, the Articles, and the Act, Marketplace Members shall be entitled to the rights and entitlements, and shall be subject to the obligations, attaching to all Members.
Section 3.4 Fees
Membership and other fees and assessments may be established by the Board in the amounts and in accordance with the terms and conditions established by or under the authority of the Board. Fees shall be imposed on an equitable basis and, as a matter of best efforts, on a cost recovery basis to the extent practicable.
Section 3.5 Process for Approval for Membership of Dealer Members
(1) An application for membership must be submitted to the Corporation in the form and executed in the manner prescribed by or under the authority of the Board, and shall be accompanied by such fees, information and documents as the Corporation may require. (2) Any firm shall be eligible to apply for membership as a Dealer Member if:
(a) It is formed under the laws of one of the provinces or territories of Canada and, where the firm is a corporation, it is incorporated under the laws of Canada or one of its provinces or territories; (b) It carries on, or proposes to carry on, business in Canada as an investment dealer or mutual fund dealer, as applicable, and is registered or licensed in each jurisdiction in Canada where the nature of its business requires such registration or licensing, and is in compliance with such legislation and the requirements of any securities commission having jurisdiction over the applicant; and (c) Its directors, officers, partners, investors and employees, and its holding companies, affiliated entities and related companies (if any), would comply with the By-laws and Rules of the Corporation that would apply to them if the applicant were a Dealer Member. (3) An application for membership shall be accompanied by a non-refundable application review deposit in an amount to be determined by the Board, to be credited towards the annual fee paid by the Member in the event that the application is approved by the Board. Where, for any reason that cannot reasonably be attributed to the Corporation or its staff, the application process (other than an application of an alternative trading system) has not
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been completed within six months from the date the application was accepted for review by the Corporation, the deposit shall be forfeited to the Corporation and the application shall be required to be resubmitted with a new nonrefundable application review deposit. For purposes of this Section, the application process shall be considered to be completed when Corporation staff recommends to the Board the approval or rejection thereof. (4) If in connection with the review or consideration of any application for membership, the Board is of the opinion that the nature of the applicant’s business, its financial condition, the conduct of its business, the completeness of the application, the basis on which the application was made or any Corporation review in respect of the application in accordance with the By-laws and Rules of the Corporation has required, or can reasonably be expected to require, excessive attention, time and resources of the Corporation, the Board may require the applicant to reimburse the Corporation for some or all of its costs and expenses which are reasonably attributable to such excessive attention, time and resources or provide an undertaking or security in respect of such reimbursement. If an applicant is to be required to make such reimbursement of costs and expenses, the Corporation shall provide to the applicant a breakdown and explanation of such costs and expenses in sufficient detail to permit the applicant to understand the basis on which the costs and expenses were or are to be calculated. (5) The process for review and approval of the application for membership shall be determined by or under the authority of the Board, and the Corporation shall make a preliminary review of the same and either:
(a) Where the application is incomplete, provide the applicant with a deficiency letter listing the items missing from or incomplete in the application, and, once Corporation staff have determined that the deficiencies have been addressed, perform a compliance review as referred to in Section 3.5(5)(b); or (b) Where the application is complete, perform a compliance review and either:
(i) If such review discloses substantial compliance and willingness to comply with the requirements of the By-laws and Rules of the Corporation and approval of the application is considered to be in the public interest, forward a Corporation staff recommendation to approve the application to the Board for consideration along with the membership application; or (ii) If such review discloses any substantial non-compliance or unwillingness to comply with the requirements of the By-laws and Rules of the Corporation, notify the applicant as to the nature of such non-compliance or unwillingness to comply and request that the application for membership be amended in accordance with the notification of the Corporation and refiled or be withdrawn. Once Corporation staff have determined that the necessary amendments have been made to the refiled application for membership, forward a Corporation staff recommendation to approve the application to the Board for consideration along with the membership application. If the applicant declines to amend or withdraw the application for membership,
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forward a Corporation staff recommendation to refuse the application to the Board for consideration along with the membership application and provide a copy of the recommendation to the applicant; or (iii) If such review indicates that approval of the application is not in the public interest, notify the applicant as to the nature of the public interest concerns and request that the application for membership be withdrawn. If the applicant declines to withdraw the application for membership, forward a Corporation staff recommendation to refuse the application to the Board for consideration along with the membership application and provide a copy of the recommendation to the applicant. (6) The membership application approval process, as set out in the Corporation’s By-laws and Rules established from time to time, shall commence once the Board receives:
(a) The membership application from Corporation staff; and (b) The Corporation staff recommendation to either approve or refuse the application pursuant to Section 3.5(5). (7) The Board shall, in its discretion and pursuant to the membership application approval process, as set out in the Corporation’s By-laws and Rules established from time to time, decide (and may delegate to a committee of the Board or an officer of the Corporation the authority to so decide) upon all applications for membership. The applicant and Corporation staff shall have an opportunity to be heard in respect of any decision proposed to be made under this Section 3.5(7). (8) If the Board approves an application subject to terms and conditions as determined by or under the authority of the Board or refuses an application, the applicant shall be provided with a statement of the grounds upon which the Board has approved the application subject to terms and conditions or refused the application, and the particulars of those grounds. (9) The Board may as it considers appropriate vary or remove any such terms and conditions as may have been imposed on an applicant, if such terms and conditions are or are no longer, as the case may be, necessary to ensure that the Corporation’s public interest mandate or the By-laws and Rules will be complied with by the applicant. In the event that the Board proposes to vary terms and conditions in a manner which would be more burdensome to the applicant, the provisions of Section 3.5(8) shall apply in the same manner as if the Board was exercising its powers thereunder in regard to the applicant. (10) If, pursuant to the provisions of Section 3.5(8), the Board approves an application subject to terms and conditions or refuses an application, the Board may order that the applicant may not apply for removal or variation of terms and conditions or reapply for approval, for such period as the Board provides. (11) Actions upon Approval of Application:
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(a) If and when the application is approved by the Board, the Corporation shall compute the amount of the annual fee to be paid by the applicant. (b) If and when the application has been approved by the Board, and the applicant has, if required to do so, been duly licensed or registered under applicable law of the province or provinces or territories in Canada in which the applicant carries on or proposes to carry on business, and upon payment of the balance of the entrance and annual fees, the applicant shall become and be a Dealer Member; and (c) The Corporation shall keep a register of the names and business addresses of all Dealer Members and of their respective annual fees. The annual fees of Dealer Members shall not be made public by the Corporation.
Section 3.6 Acceptance of Membership for Marketplace Members
If a Marketplace has requested that the Corporation act as the regulation services provider for that Marketplace, the Marketplace shall be accepted as a Marketplace Member effective upon the execution of an agreement with the Marketplace that has been authorized by the Board, for the Corporation to be the regulation services provider to that Marketplace. A Marketplace shall cease to be a Marketplace Member upon the termination of the agreement for the Corporation to be the regulation services provider to the Marketplace.
Section 3.7 Amalgamation of Members
If two or more Members propose to amalgamate and continue as one Member, the continuing Member shall not be considered to be a new Member or be required to re-apply for membership, except as otherwise determined by the Board and provided that the continuing Member otherwise complies with the By-laws and Rules including the payment of Member fees, if applicable.
Section 3.8 Dealer Member Resignation
Subject to Section 14.6, a Dealer Member wishing to resign shall address a letter of resignation to the Board in the form and containing such information prescribed by the Board which resignation shall become effective when approved by the Board, in accordance with the Rules. A Dealer Member resigning from the Corporation shall make full payment of its annual fee, if applicable, for the financial year in which its resignation becomes effective.
Section 3.9 Dealer Member Removal
Unless a Dealer Member has voluntarily resigned, the Board may terminate the membership of such Dealer Member in accordance with the By-laws and Rules. On the termination or resignation of a Dealer Member, the rights of the Dealer Member shall be determined in accordance with the By-laws and the Rules. The Rules regarding the discipline of Members are incorporated by reference in this By-law.
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Section 3.10 Transferability, Reorganizations
Membership is not transferable, unless approved by the Board. If the business or ownership of a Member is proposed to be reorganized or transferred, amalgamated or otherwise combined in whole or in part with another person (including another Member) in a manner which the Member or its business will cease to exist in, or will be substantially changed from, its then current form, or a change of control of the Member may occur, the Member (not less than 30 days prior to the proposed effective date of such event) shall give written notice to the Corporation. Upon receipt of such notice, the Corporation shall review the proposed transaction and may request from the Member, its auditors or any other person involved in the transaction, such information as it or the Board may consider necessary or desirable. The Corporation may either (a) approve the proposed transaction (which approval may be subject to terms and conditions) or (b) direct that the transaction not be completed if the Corporation determines in its sole discretion that the obligations of the Member to its clients cannot be satisfied or the By-laws and Rules will not be complied with by the Member or any continuing, new or reorganized entity, as the case may be.
Section 3.11 Ceasing to Carry on Business
If a Member no longer carries on business as any of an investment dealer, a mutual fund dealer or a Marketplace, as applicable, or its business has been acquired by a person which is not a Member of the Corporation, the Board may, unless the Member has voluntarily resigned in accordance with Section 3.8, terminate the Membership of the Member after the Member has been given the opportunity to be heard in accordance with the Rules. A former Member whose Membership has been terminated pursuant to the provisions of this Section 3.11 shall cease to be entitled to exercise any of the rights and privileges of Membership but shall remain liable to the Corporation for all amounts due to the Corporation from the former Member.
Section 3.12 Ownership
Without limiting the generality of Section 14.1, the Board may make and from time to time amend and repeal Rules regarding the ownership of equity interests in Members.
ARTICLE 4
MEMBERS’ MEETINGS
Section 4.1 Annual Meeting
The annual meeting of the Members shall be held on a date to be determined by the Board, but in any case shall be held within six months after the end of the Corporation’s fiscal year. Each annual meeting shall be held at the head office of the Corporation or at any other place in Canada as the Board may determine. At every annual meeting, in addition to any other business that may be transacted, the report of the Directors, the financial statements and the report of the auditors shall be presented and auditors shall be appointed for the ensuing year.
Section 4.2 Special or General Meetings
Members may consider and transact any business either special or general at any meeting of the Members. The Board, the Chair, Vice-Chair, the President, or a designated vice-president
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shall have power to call, at any time, a general meeting of the Members. The Board shall call a special general meeting of Members on written requisition of Members representing not less than five percent of the number of Members.
Section 4.3 Quorum
Unless otherwise provided by the Act, the Articles or any other By-law, twenty percent of Members shall constitute a quorum at any meeting of the Members provided such Members are present in person or represented by a duly appointed proxyholder. If a quorum is present at the opening of any meeting of Members, the Members present or represented by proxy may proceed with the business of the meeting notwithstanding that a quorum is not present throughout the meeting. If a quorum is not present at the opening of any meeting of Members, the Chair or the Members present or represented by proxy may adjourn the meeting to a fixed time and place but may not transact any other business.
Section 4.4 List of Members Entitled to Notice
For every meeting of Members, the Corporation shall prepare a list, in alphabetic order and arranged by class, of Members entitled to receive notice of and vote at the meeting. The Members listed shall be those registered at the close of business on the day immediately preceding the day on which notice of the meeting is given. The list shall be available for examination by any Member during usual business hours at the head office of the Corporation and at the meeting for which the list was prepared.
Section 4.5 Notice
Twenty-one days notice shall be given to each Member, each Director, and the auditor of the Corporation, of any annual or special general meeting of Members in the manner prescribed by the Rules and policies. Notice of any meeting where special business will be transacted shall contain sufficient information to permit the Member to form a reasoned judgement on the decision to be taken upon which the Member is entitled to vote. Notice of each meeting of Members must remind the Member entitled to vote that the Member has the right to vote by proxy, and must attach a form of proxy.
Section 4.6 Absentee Voting
(1) In addition to voting personally (or in the case of a Member who is a body corporate or association, by an individual authorized by a resolution of the Board or governing body of the body corporate or association to represent it at meetings of the Members of the Corporation), every Member entitled to vote at a meeting of Members shall have one vote, and may vote by any of the following means:
(a) by a proxy, provided that a person appointed by proxy must be a director, officer or employee of a Member or of an affiliated entity of a Member or a director of the Corporation; (b) by using a mailed-in ballot in the form provided by the Corporation provided that the Corporation has a system that enables the votes to be gathered in a manner that
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permits their subsequent verification and permits the tallied votes to be presented to the Corporation without it being possible for the Corporation to identify how each Member voted; or (c) by means of a telephonic, electronic or other communication facility, if the facility enables the votes to be gathered in a manner that permits their subsequent verification and permits the tallied votes to be presented to the Corporation without it being possible for the Corporation to identify how each Member voted; provided that a proxy, a mailed-in ballot, or any vote cast by means of a telephonic, electronic or other communication facility must be executed by the Member or the Member’s attorney authorized in writing or, if the Member is a body corporate or association, by an officer or employee of a Member or of an affiliated entity of a Member. (2) The Board may from time to time establish requirements regarding the lodging of proxies at some place or places other than the place at which a meeting or adjourned meeting of Members is to be held and for particulars of such proxies to be sent by facsimile or in writing before the meeting or adjourned meeting to the Corporation or any agent of the Corporation for the purpose of receiving such particulars and providing that proxies so lodged may be voted upon as though the proxies themselves were produced at the meeting or adjourned meeting and votes given in accordance with such requirements shall be valid and shall be counted. The chair of any meeting of Members may, subject to any requirements established as aforesaid, in the chair’s discretion accept facsimile or written communication as to the authority of any person claiming to vote on behalf of and to represent a Member notwithstanding that no proxy conferring such authority has been lodged with the Corporation, and any votes given in accordance with such facsimile or written communication accepted by the chair of the meeting shall be valid and shall be counted. (3) Voting by proxy, mailed-in ballot, or by means of a telephonic, electronic, or other communication facility shall comply with the procedures for collecting, counting, and reporting the results of any vote established by the Board from time to time. Such procedures are incorporated by reference in this By-law.
Section 4.7 Votes
The voting rights of the Members at any meeting of Members shall be as follows:
(a) In the case of a vote for the election of Directors, each Member present at a meeting to elect such Directors shall have the right to exercise one vote; (b) In the case of a vote for the removal of a Director, each Member present at a meeting to consider the removal of the Director shall have the right to exercise one vote. A majority of the votes cast by the Members, voting together, present and carrying voting rights to remove a Director shall remove such Director from office; (c) In the case of a vote for the repeal, amendment or enactment of a By-law or to authorize an application for articles of amendment (including increasing the size of
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the Board or adding new classes of members) or to approve the sale or transfer of all or substantially all the Corporation’s assets, or an amalgamation or plan of arrangement, each Member shall have the right to exercise one vote at a meeting at which such approval is required, and except as required by the Articles or the Act, every such question shall be decided by at least two-thirds of the votes cast on the question by the Members, voting together, present and carrying voting rights; (d) On all other questions or matters to be decided at a meeting, each Member present at a meeting shall have the right to exercise one vote. A majority of votes cast by all Members, voting together, present and carrying voting rights shall decide the question or matter.
Section 4.8 Participation in Meetings by Telephonic or Electronic Means
(1) A Member may participate in a meeting of the Members by means of a telephonic, electronic or other communication facility that permits all persons participating in the meeting to communicate adequately with each other, if the Corporation makes available such a communication facility. A Member participating in such a meeting by such means is deemed to be present at the meeting. (2) If the Board or Members call a meeting of Members, the Board or Members, as the case may be, may determine that the meeting shall be held entirely by means of a telephonic, electronic, or other communication facility that permits all participants to communicate adequately with each other during the meeting. (3) At the outset of each meeting referred to in subsection (1) or (2) and whenever votes are required, the chair of the meeting shall establish the existence of a quorum and unless a majority of the Members present at such meeting otherwise require, adjourn the meeting to a predetermined date, time and place whenever not satisfied that the proceedings of the meeting may proceed with adequate security and confidentiality.
Section 4.9 Chair, Secretary and Scrutineers
The chair of any meeting of Members shall be the first mentioned of such of the following officers as have been appointed and who is present at the meeting: Chair, Vice-Chair, or the President. If no such officer is present within fifteen minutes from the time fixed for holding the meeting, the persons present and entitled to vote on behalf of Members shall choose one of their number to be chair. If the secretary of the Corporation is absent, the chair shall appoint an individual who is authorized to vote on behalf of a Member to act as secretary of the meeting. If desired, one or more scrutineers, who need not be Members, may be appointed by a resolution or by the chair with the consent of the meeting.
Section 4.10 Persons Entitled to be Present
The only persons entitled to be present at a meeting of Members shall be those entitled to vote thereat, the Directors and auditor of the Corporation and others who, although not entitled to vote, are entitled or required under any provision of the Act, the Articles or By-laws to be present
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at the meeting. Any other person may be admitted only on the invitation of the chair of the meeting or with the consent of the meeting.
Section 4.11 Show of Hands
Subject to the provisions of the Act, any question at a meeting of Members shall be decided by a show of hands or by such other form of consent appropriate to the communication facility used to collect votes, unless a ballot thereon is required or demanded in accordance with Section
4.12. Subject to the By-laws, upon a show of hands or the provision of another appropriate form
of consent, every person who is present and entitled to vote on behalf of a Member shall have one vote. Whenever a vote by show of hands or otherwise shall have been taken upon a question, unless a ballot thereon is so required or demanded, a declaration by the chair of the meeting that the vote upon the question has been carried or carried by a particular majority or not carried and an entry to that effect in the minutes of the meeting shall be prima facie evidence of the fact without proof of the number or proportion of the votes recorded in favour of or against any resolution or other proceeding in respect of the said question, and the result of the vote so taken shall be the decision of the Members upon the said question.
Section 4.12 Ballots
On any question proposed for consideration at a meeting of Members, and whether or not a show of hands or another form of consent has been taken thereon, the chair or any person who is present and entitled to vote, whether as proxyholder or representative, on such questions at the meeting may demand a ballot. A ballot so required or demanded shall be taken in such manner as the chair shall direct. A requirement or demand for a ballot may be withdrawn at any time prior to the taking of the ballot. If a ballot is taken each person present shall be entitled to that number of votes provided by the By-laws and the result of the ballot so taken shall be the decision of the Members upon the said question.
Section 4.13 Adjournment
The chair at a meeting of Members may, with the consent of the meeting and subject to such conditions as the meeting may decide, adjourn the meeting from time to time and place to place. If a meeting of Members is adjourned for less than thirty days, it shall not be necessary to give notice of the adjourned meeting, other than by announcement at the earliest meeting that is adjourned.
ARTICLE 5
BOARD OF DIRECTORS
Section 5.1 Number and Qualifications
Subject to the Articles, the Board shall be comprised of 15 Directors. A majority of the Directors shall be residents of Canada. Directors need not be Members.
Section 5.2 Director Representation
The Board shall be comprised of 15 Directors as follows:
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(a) Eight Independent Directors,
(b) Six Non-Independent Directors, and
(c) The President.
Section 5.3 Recommendation of Director Nominees for Election
(1) Prior to each annual meeting of Members at which Directors are to be elected, the Governance Committee shall review and select for recommendation to the Board as nominees such number of qualified candidates for election as Non-Independent Directors and Independent Directors as are to be elected at the annual meeting. The Governance Committee will evaluate individual candidates based on their ability to contribute a range of knowledge, skills and experience and having regard for the required composition of the Board and the fact that the Board, as a whole, should be representative of the Corporation’s various stakeholders. (2) Subject to the terms of the Recognition Orders, the Board shall nominate for election to the Board at the annual meeting the persons as determined in accordance with this Section 5.3.
Section 5.4 Election and Term
(1) The term of each Independent Director and Non-Independent Director elected at a meeting of Members shall expire at the dissolution or adjournment of the second annual meeting of Members following the annual meeting of Members at which the Director was elected. Notwithstanding the foregoing sentence, the Board of Directors shall be authorized pursuant to Section 5.3(2) to nominate for election by the Members a Director with a term that may expire before the second annual meeting of Members following such election. (2) With the exception of the President, a Director may be elected to serve four consecutive terms in office but shall not be eligible to be elected to serve a fifth consecutive term, which shall include any shorter term as may have been fixed by the Board of Directors in accordance with this By-law, but shall exclude any portion of a term in office in respect of a vacancy filled pursuant to Section 5.6. For purposes of determining the number of consecutive terms in office of an initial Director upon the Amalgamation who was reelected at the first annual meeting of Members, his or her term in office prior to the first annual meeting of Members shall not be included. Those Directors elected at the first annual meeting of Members following the Amalgamation to serve for an initial one year term shall be limited to three additional consecutive terms in office. (3) Notwithstanding Section 5.4(2), a Director who was on the board of directors of either IIROC or the MFDA immediately prior to the Amalgamation shall not be elected to serve on the Board for a term that would result in such Director serving beyond the first annual meeting of Members held after the eight (8) year anniversary of such Director’s election to the board of IIROC or the MFDA, as applicable.
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Section 5.5 Vacancies
The office of Director shall be automatically vacated:
(a) If a resolution to remove the Director has been approved by the Members in accordance with Section 4.7(b); (b) In the case of a Director who is President, if the Director ceases to be President; (c) In the case of an Independent Director, if the Director ceases to be qualified as an Independent Director; (d) If a Director shall have resigned the office by delivering a written resignation to the secretary of the Corporation; (e) If the Director is declared to be incapable by a court in Canada or in any other country; (f) If a majority of the Directors (excluding the Director in question) determine that the Director is no longer a fit and proper person; (g) If the Director becomes bankrupt; or (h) If the Director dies.
Section 5.6 Filling Vacancies
If a vacancy in the Board shall occur for any reason, the vacancy shall be filled (allowing a reasonable period of time for doing so) for the balance of the term or such shorter term as the Board shall determine pursuant to Section 5.4, of the Director that vacated the office by a resolution passed by the Board appointing a Director, provided that:
(a) If the vacancy is caused by the departure of the President, the person to be appointed to the office of the President has been appointed by the Board; (b) If the vacancy is caused by the departure of an Independent Director or a NonIndependent Director, the person to be appointed has been identified and recommended by the Governance Committee and in the case of a vacancy of an Independent Director, the person recommended is qualified as an Independent Director, and (c) If the vacancy is caused by the failure to elect the required number of Directors, the Board may appoint a Director to fill the vacancy on the basis that the vacancy arose by reason of the departure of an Independent Director or Non-Independent Director and the provisions of Section 5.6(b) shall apply.
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Section 5.7 Remuneration of Directors
The Board may determine from time to time such reasonable remuneration, if any, to be paid to the Independent Directors for serving as such and the Board may determine that such remuneration need not be the same for all Directors. Non-Independent Directors shall not receive remuneration for serving as such. Directors may be reimbursed for reasonable expenses incurred by a Director in the performance of the Director’s duties.
Section 5.8 Release of Claims
When a Director ceases to hold office, the Corporation shall release a resigning or departing Director of all claims with respect to any matter or thing up to and including the resignation or departure in the capacity as a Director, except for any claims (other than to the extent the Director is indemnified by the Corporation pursuant to Section 9.2) which might arise out of the gross negligence or fraud of the resigning or departing Director.
ARTICLE 6
POWERS OF DIRECTORS
Section 6.1 Administer Affairs
The Board shall supervise the management of the affairs of the Corporation. Subject to the By-laws and the Act, the powers of the Board may be exercised by resolution passed at a meeting at which a quorum is present or by resolution in writing signed by all the Directors entitled to vote on that resolution at a meeting of the Board. If there is a vacancy on the Board, the remaining Directors may exercise all the powers of the Board so long as a quorum remains in office.
Section 6.2 Expenditures
The Board shall have power to authorize expenditures on behalf of the Corporation from time to time and may delegate by resolution to an officer or officers of the Corporation the right to employ and pay salaries to employees.
Section 6.3 Borrowing Power
(1) The Board is hereby authorized, from time to time, without the authorization of the Members:
(a) To borrow money upon the credit of the Corporation; (b) To limit or increase the amount to be borrowed; (c) To issue or cause to be issued, bonds, debentures or other securities of the Corporation and to pledge or sell the same for such sums, upon such terms, covenants and conditions and at such prices as may be deemed expedient by the Board;
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(d) To secure any such bond, debentures or other securities, or any other present or future borrowing or liability of the Corporation, by mortgage, hypothec, charge or pledge of all or any currently owned or subsequently acquired real and personal, movable and immovable, property of the Corporation, and the undertaking and rights of the Corporation; and (e) Delegate to a committee of the Board, a Director or an officer or officers of the Corporation all or any of the powers conferred on the Board under this subsection to such extent and in such manner as the Board may determine at the time of such delegation. (2) The powers hereby conferred shall be deemed to be in supplement of and not in substitution for any powers to borrow money for the purposes of the Corporation possessed by its Directors or officers independently of this By-law.
Section 6.4 Conflict of Interest
(1) A Director who is in any way directly or indirectly interested in a material contract or proposed material contract or a material transaction or proposed material transaction with the Corporation shall make the disclosure required by the Act and except as provided by the Act, no such Director shall vote on any resolution to approve any such contract or transaction. In supplement of and not by way of limitation upon any rights conferred upon Directors by the Act, it is declared that, subject to compliance with the Act, no Director shall be disqualified from any such office by, or vacate any such office by reason of, holding any office with the Corporation or with any corporation in which the Corporation shall be a shareholder or by reason of being otherwise in any way directly or indirectly interested or contracting with the Corporation as vendor, purchaser or otherwise or being concerned in any contract or arrangement made or proposed to be entered into with the Corporation in which the Director is in any way directly or indirectly interested as vendor, purchaser or otherwise. Subject to compliance with the Act, no contract or arrangement or transaction entered into by or on behalf of the Corporation in which any Director shall be in any way directly or indirectly interested shall be void or voidable and no Director shall be liable to account to the Corporation or any of its Members or creditors for any profit realized by or from any such contract or arrangement or transaction by reason of any fiduciary relationship. Notwithstanding the foregoing prohibitions on voting by a Director, such Director may be present at and counted to determine the presence of a quorum at the relevant meeting of Directors. (2) A Director who is a party to, or who is a director, officer or employee of or has a material interest in any person who is a party to, a regulatory matter or regulatory investigation in which the Corporation is involved shall disclose the nature and extent of his or her interest at the time and in the manner required by subsection 6.4(1) for an interest in a contract or transaction. Such Director shall not vote on any such matter or investigation, and shall withdraw from the part of any meeting of the Board at which the matter or investigation is discussed or considered, if such matter or investigation is directed specifically at or otherwise directly relates to the Director or a person of which he or she is an employee, officer or director or in which he or she has a material interest.
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ARTICLE 7
DIRECTORS’ MEETINGS
Section 7.1 Place of Meeting
Meetings of the Board may be held at any place to be determined by the Board, inside of Canada.
Section 7.2 Calling of Meetings
Meetings of the Board shall be held from time to time at such time as the Board, the Chair, the President, or any two Directors may determine.
Section 7.3 Notice of Meetings
Forty-eight hours written notice of any meeting of the Board shall be given, other than by mail, to each Director. Notice by mail shall be sent at least fourteen days prior to the meeting. There shall be at least one meeting per calendar quarter of the Board. Any notice shall describe the matters to be addressed at the meeting. A meeting of the Board shall be held immediately following an annual meeting without notice, provided a quorum is present.
Section 7.4 Adjourned Meeting
Any meeting of directors may be adjourned from time to time by the chair of the meeting, with the consent of the meeting, to a fixed time and place. Notice of any adjourned meeting of directors is not required to be given if the time and place of the adjourned meeting is announced at the original meeting. Any adjourned meeting shall be duly constituted if held in accordance with the terms of the adjournment and a quorum is present thereat. The directors who formed a quorum at the original meeting are not required to form the quorum at the adjourned meeting. If there is no quorum present at the adjourned meeting, the original meeting shall be deemed to have terminated forthwith after its adjournment. Any business may be brought before or dealt with at any adjourned meeting which might have been brought before or dealt with at the original meeting in accordance with the notice calling the same.
Section 7.5 Regular Meetings
The Board may appoint a day or days in any month or months for regular meetings of the Board at a place and hour to be named. A copy of any resolution of the Board fixing the place and time of such regular meetings shall be sent to each Director forthwith after being passed, but no other notice shall be required for any such regular meeting except where the Act requires the purpose thereof or the business to be transacted thereat to be specified and except where nonroutine business is to be discussed.
Section 7.6 Chair of Meetings of the Board
The chair of any meeting of the Board shall be the Chair, and if the Chair is not present at the meeting, the Vice-Chair. If the Chair and the Vice-Chair are not present, the Directors present shall choose one of their number to be chair.
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Section 7.7 Voting Rights
Each Director is authorized to exercise one vote at all meetings of the Board, and except as required by the Act, every question shall be decided by a majority of the votes cast on the question and, in case of an equality of votes, the chair of the meeting shall not be entitled to a second or casting vote.
Section 7.8 Participation in Meetings by Telephonic or Electronic Means
(1) A Director may participate in a meeting of the Board or of a committee of the Board by means of a telephonic, electronic, or other communication facility that permits all persons participating in the meeting to communicate adequately with each other, provided that each Director has consented in advance to meeting by such means, and a Director participating in such a meeting by such means is deemed to be present at the meeting. (2) At the outset of each meeting referred to in the foregoing subsection and whenever votes are required, the chair of the meeting shall establish the existence of a quorum and, unless a majority of the Directors present at such meeting otherwise require, adjourn the meeting to a predetermined date, time and place whenever not satisfied that the proceedings of the meeting may proceed with adequate security and confidentiality.
Section 7.9 Quorum
A majority of the Directors in office, including a majority of the Independent Directors in office from time to time, shall constitute a quorum for meetings of the Board. Any meeting of the Board at which a quorum is present shall be competent to exercise all or any of the authorities, powers and discretions by or under the By-laws.
Section 7.10 Minutes of Meetings
The minutes of the Board shall not be available to the Members but shall be available to the Directors, each of whom shall receive a copy of such minutes.
ARTICLE 8
OFFICERS
Section 8.1 Appointment
The Board may annually or more often as may be required, appoint a Chair, a Vice-Chair, a President, one or more vice-presidents, a secretary and any such other officers as the Board may determine, including one or more assistants to any of the officers so appointed. The Board may specify the duties of and, in accordance with this By-law and subject to the provisions of the Act, delegate to such officers powers to manage the affairs of the Corporation. Except as otherwise provided in this By-law, officers need not be Directors, nor Members.
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Section 8.2 Chair and Vice-Chair of the Board
The Board shall from time to time appoint a Chair of the Board who shall be an Independent Director and may appoint one or more Vice-Chairs of the Board who shall be Directors and may not be President. If appointed, the Board may assign to them any of the powers and duties that are by any provisions of a By-law assigned to the President, and they shall, subject to the provisions of the Act, have such other powers and duties as the Board may specify. During the absence or disability of the Chair, the Vice-Chair shall perform the duties and exercise the powers of Chair.
Section 8.3 President and Chief Executive Officer
The Board shall appoint a President, who shall also be appointed as the chief executive officer. The President shall have such powers and duties as the Board may specify.
Section 8.4 Vice-President
A vice-president shall have such powers and duties as the Board or the President may specify.
Section 8.5 Secretary
The secretary shall attend and be the secretary of all meetings of the Board (or arrange for another individual to so act), Members and committees of the Board and shall enter or cause to be entered in records kept for that purpose minutes of all proceedings thereat; the secretary shall give or cause to be given, as and when instructed, all notices to Members, Directors, officers, auditors and members of committees of the Board; the secretary shall be the custodian of the stamp or mechanical device generally used for affixing the corporate seal of the Corporation and of all books, papers, records, documents, and instruments belonging to the Corporation, except when some other officer or agent has been appointed for that purpose; and the secretary shall have such other powers and duties as the Board or the President may specify.
Section 8.6 Powers and Duties of Other Officers
The powers and duties of all other officers shall be such as the terms of their engagement call for or as the Board or the President may specify. Any of the powers and duties of an officer to whom an assistant has been appointed may be exercised and performed by such assistant, unless the Board or the President otherwise directs.
Section 8.7 Variation of Powers and Duties
The Board may from time to time and subject to the provisions of the Act, vary, add to or limit the powers and duties of any officer.
Section 8.8 Term of Office
The Board, in its discretion, may remove any officer of the Corporation, without prejudice to such officer’s rights under any employment contract. Otherwise, each officer appointed by the Board shall hold office until his or her successor is appointed, or until his or her earlier resignation.
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Section 8.9 Terms of Employment and Remuneration
The terms of employment and the remuneration of an officer appointed by the Board shall be settled by the Board from time to time or by a committee of the Board appointed for that purpose.
Section 8.10 Conflict of Interest
Section 6.4 of this By-Law shall apply to an officer (i) with any interest in any material
contract or proposed material contract or material transaction or proposed material transaction with the Corporation, or (ii) who is a party to, or who is a director, officer or employee of or has a material interest in any person who is a party to a regulatory matter or regulatory investigation in which the Corporation is involved, as if the officer were a Director.
Section 8.11 Agents and Attorneys
The Corporation, by or under the authority of the Board, shall have power from time to time to appoint agents or attorneys for the Corporation in or outside Canada with such powers of management, administration or otherwise (including the power to sub-delegate) as may be thought fit, subject to the provisions of the Act.
ARTICLE 9
PROTECTION OF DIRECTORS AND OTHERS
Section 9.1 Limitation of Liability
No Protected Party shall be liable for the acts, neglect or defaults of any other Protected Party, or for any other loss, damage or misfortune whatsoever which shall happen in the execution of the duties of his or her office or position or in relation thereto unless the same are occasioned by his or her own wilful neglect or default.
Section 9.2 Indemnities to Directors and Others
(1) Each Indemnified Party shall, from time to time and at all times, be indemnified and saved harmless out of the funds of the Corporation, from and against:
(a) all costs, charges, fines, damages and penalties and expenses whatsoever that such Indemnified Party reasonably incurs, including an amount paid to settle an action or satisfy a judgment, in respect of any civil, criminal, administrative, investigative, or other proceeding which is threatened, brought, commenced or prosecuted against him or her, or in respect of any act, deed, matter or thing whatsoever, made, done or permitted by him or her, in or about the execution of the duties of his or her office or position or in respect of any such liability including those duties executed, whether in an official capacity or not, for or on behalf of or in relation to any body corporate or entity which he or she serves or served at the request of or on behalf of the Corporation or other entity; and
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(b) all other costs, charges and expenses which he or she sustains or incurs in or about or in relation to the affairs thereof, including an amount representing the value of time any such Indemnified Party spent in relation thereto and any income or other taxes or assessments incurred in respect of the indemnification provided for in this By-law, until it is conclusively determined that such Indemnified Party shall no longer be entitled to such indemnification, provided that the Indemnified Party:
(c) acted honestly and in good faith with a view to the best interests of the Corporation or, as the case may be, to the best interests of the other entity for which the Indemnified Party acted as director or officer or in a similar capacity at the Corporation’s request; and (d) in the case of a criminal or administrative proceeding that is enforced by a monetary penalty, had reasonable grounds for believing that his/her conduct was lawful. (2) The Corporation shall also indemnify such persons in such other circumstances as the Act permits or requires. Nothing in this By-law shall limit the right of any person entitled to indemnity apart from the provisions of this By-law.
Section 9.3 Insurance
The Corporation shall purchase and maintain insurance for the benefit of any Indemnified Party against such liabilities and in such amounts as the Board may from time to time determine and are permitted by the Act.
ARTICLE 10
REGIONAL COUNCILS
Section 10.1 Designation of Regions
Subject to the terms of the Recognition Orders, the Board may establish a National Council, and the Board may designate any geographic area in Canada as a Region of the Corporation. Subject to the terms of the Recognition Orders, the Board may change or terminate any such designation. The original geographic areas of Canada have been designated as Regions of the Corporation as follows:
(a) Atlantic Region, composed of the Provinces of New Brunswick, Nova Scotia, Prince Edward Island and Newfoundland and Labrador; (b) Quebec Region; (c) Ontario Region; (d) Manitoba Region, composed of the Province of Manitoba and the Territory of Nunavut;
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(e) Saskatchewan Region;
(f) Alberta Region, composed of the Province of Alberta and the Northwest Territories; and (g) Pacific Region, composed of the Province of British Columbia and the Yukon Territory.
Section 10.2 Composition of Regional Councils
(1) There shall be a Regional Council in each Region. Each Regional Council shall be composed of four to twenty members, as determined from time to time by the Regional Council, including a chair and vice-chair to be elected at the annual meeting of Dealer Members of the Region. (2) In addition to the members of the Regional Council elected at the annual meeting of Dealer Members of the Region, the Board may appoint one or more ex-officio members of a Regional Council.
Section 10.3 Duties and Powers
Each Regional Council shall have an advisory role with respect to regional issues, and provide regional perspectives on national issues.
Section 10.4 Meetings of Regional Members
The Dealer Members of each Region shall meet at least annually for the purpose of electing members of the Regional Council. A meeting of the Dealer Members of any Region may be called by the Regional Council or by the Board and shall be held and conducted in accordance with the By-laws and Rules, and the procedures established by the Board from time to time. Notice of the time and place of any such meeting shall be given to the Dealer Members of the Region. Two Members of the Region entitled to vote, present personally or by a partner, director or officer shall be a quorum for any meeting of the Dealer Members of the Region. Unless otherwise determined by the Board, voting at any meeting of the Dealer Members of a Region may be carried out in the same manner as provided for voting at meetings of the Corporation. Instruments of proxy for such purpose shall be lodged with the Chair of the Regional Council not later than 10:00 a.m. of the day of the meeting or of any adjournment thereof.
ARTICLE 11
DISTRICT HEARING COMMITTEES
Section 11.1 Designation of Districts
Subject to the terms of the Recognition Orders, the Board may from time to time designate any geographic area in Canada as a District of the Corporation, and may change or terminate any such designation. The original geographic areas of Canada have been designated as Districts of the Corporation as follows:
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(a) Newfoundland and Labrador District;
(b) Prince Edward Island District;
(c) Nova Scotia District;
(d) New Brunswick District;
(e) Québec District;
(f) Ontario District;
(g) Manitoba District, composed of the Province of Manitoba and the Territory of Nunavut; (h) Saskatchewan District; (i) Alberta District, composed of the Province of Alberta and the Northwest Territories; and (j) Pacific District, composed of the Province of British Columbia and the Yukon Territory.
Section 11.2 District Hearing Committees
There shall be a hearing committee in each District. Each District Hearing Committee shall have the duties, shall operate in accordance with the procedures and shall exercise its powers as set out in the Rules, including its powers with respect to the conduct of hearings. The appointment of the District Hearing Committees shall be made in accordance with the Rules.
ARTICLE 12
COMMITTEES AND ADVISORY BODIES
Section 12.1 Committees of the Board
The Board may from time to time in its discretion appoint from their number one or more committees of the Board with such powers as the Board may determine including, without limitation, the authority to exercise any of the powers of the Board and to act in all matters for and in the name of the Board under the By-laws and Rules, except in each case where By-laws or Rules specifically require an action by, or approval of, the Board. The members of any committee established by the Board shall be appointed annually at the first meeting of Directors following the annual meeting of Members at which Directors have been elected. Unless otherwise provided in this By-law, any Director shall be entitled to be appointed to any committee and a majority of the members of a committee present in person or by telephone shall constitute a quorum, provided that if Independent Directors must be members of the committee, the quorum must also include a majority of the Independent Directors who are members of the committee.
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Section 12.2 Governance Committee
The Board shall establish a Governance Committee composed of at least five Directors, and may include the Chair. All of the members shall be Independent Directors. The chair of the Governance Committee shall be elected by the Board. The Governance Committee shall perform such duties as the Board may delegate or direct from time to time.
Section 12.3 Finance, Audit and Risk Committee
The Board shall establish a Finance, Audit and Risk Committee composed of at least five Directors of whom a majority shall be Independent Directors. The chair of the Finance, Audit and Risk Committee shall be an Independent Director elected by the Board. The Finance, Audit and Risk Committee shall review and report to the Board on the annual financial statements of the Corporation and shall perform such other duties as the Board may delegate or direct from time to time.
Section 12.4 Human Resources and Pension Committee
The Board shall establish a Human Resources and Pension Committee composed of at least five Directors of whom a majority shall be Independent Directors. The chair of the Human Resources and Pension Committee shall be an Independent Director elected by the Board. The Human Resources and Pension Committee shall perform such duties as the Board may delegate or direct from time to time.
Section 12.5 Appointments Committee
The Board shall establish an Appointments Committee which will be responsible for appointing members to the District Hearing Committees and such Appointments Committee shall be composed of at least seven Directors (provided the Appointments Committee shall always be comprised of an uneven number of members), including the President, of whom a majority shall be Independent Directors. The chair of the Appointments Committee shall be an Independent Director elected by the Board. The Appointments Committee shall perform such other duties as the Board may delegate or direct from time to time.
Section 12.6 Committee Meetings
The Board may prescribe requirements and procedures not inconsistent with the Act and the By-laws relating to the calling of meetings of, and conduct or business by, committees of the Board. Subject to the By-laws and Rules and any resolution of the Board, meetings of any such committee shall be held at any time and place to be determined by the chair of the committee or its members provided that at least 48 hours’ prior written notice of such meetings shall be given, other than by mail, to each member of the committee. Notice by mail shall be sent at least 14 days prior to the meeting.
Section 12.7 Advisory Bodies
The Board may from time to time appoint such advisory bodies as it may deem advisable, and may delegate such power of appointment to any Director, officer, committee or employee of
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the Corporation. Membership on such advisory bodies shall be determined by the Board from time to time and if the Board so decides, members of such advisory bodies may be persons other than Directors, Members or directors, officers or employees of a Member.
Section 12.8 Procedure
Unless otherwise determined by the Board, this By-law or the Rules, each committee and advisory body shall have power to regulate its procedure.
ARTICLE 13
NOTICES
Section 13.1 Method of Giving Notices
Any notice (which term includes any communication or document) to be given (which term includes sent, delivered, or served) pursuant to the Act, the regulations thereunder, the Articles, the By-laws or otherwise to a Member, Director, officer, auditor or member of a committee of the Board shall be sufficiently given if delivered personally to the person to whom it is to be given; or if delivered to the person’s recorded address; or if mailed to the person at the person’s recorded address by prepaid ordinary or air mail; or if sent to the person at the person’s recorded address by any means of prepaid transmitted or recorded communication (including any form of electronic communication). A notice so delivered shall be deemed to have been given when it is delivered personally or to the recorded address as aforesaid; a notice so mailed shall be deemed to have been given when deposited in a post office or public letter box and deemed to have been received on the fifth day after mailing; and a notice so sent by any means of transmitted or recorded communication shall be deemed to have been given when dispatched or delivered to the appropriate communication company or agency or its representative for dispatch. The secretary may change or cause to be changed the recorded address of any Member, Director, officer, auditor or member of a committee of the Board in accordance with any information believed by the secretary to be reliable. The foregoing shall not be construed so as to limit the manner or effect of giving notice by any other means of communication otherwise permitted by law or as authorized by this By-law.
Section 13.2 Undelivered Notices
If any notice given to a Member pursuant to Section 13.1 is returned on three consecutive occasions because the Member cannot be found, the Corporation shall not be required to give any further notices to such Member until the Member informs the Corporation in writing of the Member’s new address.
Section 13.3 Omissions and Errors
The accidental omission to give any notice to any Member, Director, officer, auditor or member of a committee of the Board or the non-receipt of any notice by any such person or any error in any notice not affecting the substance thereof shall not invalidate any action taken at any meeting held pursuant to such notice or otherwise founded thereon.
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Section 13.4 Waiver of Notice
Any Member, proxyholder, representative, other person entitled to attend a Members’ Meeting, Director, officer, auditor or member of a committee of the Board may at any time waive any notice, or waive or abridge the time for any notice, required to be given to such person under any provision of the Act, the regulations thereunder, the Articles, the Bylaws or otherwise and such waiver or abridgement, whether given before or after the meeting or other event of which notice is required to be given, shall cure any default in the giving or in the time of such notice, as the case may be. Any such waiver or abridgement shall be in writing except a waiver of notice of a meeting of the Board or of a committee of the Board which may be given in any manner.
ARTICLE 14
RULES AND OTHER INSTRUMENTS
Section 14.1 Power to Make, Amend or Repeal Rules
The Board may make and from time to time amend or repeal such Rules for the objects of the Corporation as a self-regulatory organization and a regulation services provider. All such Rules for the time being in force, unless expressly otherwise provided, shall be binding upon all Regulated Persons. For the purposes of the discipline of Members in accordance with the Rules, such Rules from time to time are incorporated by reference in this By-law. Rules made or amended may be designated with such style, name or title as approved by the Board. Rules shall be effective without Member approval or approval by any other person, except as expressly otherwise provided therein or pursuant to any applicable legislation, the Recognition Orders or the Information Processor Recognition Orders. Rules may represent the imposition of requirements in addition to or higher than those imposed under the applicable securities legislation.
Section 14.2 Forms and Other Instruments
Where pursuant to any By-Law or Rule, a Form or other instrument may be prescribed or adopted, any such Form or other instrument (including any instructions, directions or notes in such Forms) so prescribed or adopted shall have the same force and effect as the By-Law or Rule pursuant to which it is prescribed or adopted. Any reference in the By-laws or Rules to compliance with the By-laws or Rules shall be deemed to include a reference to any Forms and other instruments.
Section 14.3 Use of Restricted Fund
Permissible uses for the Restricted Fund will be subject to the terms of Recognition Orders.
Section 14.4 Investor Protection Fund
The Corporation is authorized to enter into and perform its obligations under such agreements or other arrangements with an IPF as may be, in the discretion of the Board, consistent with the objects of the Corporation including, without limitation, an Industry Agreement. The President, his or her staff or any other person designated by the Board shall be authorized to execute and deliver any such agreements, or make any such arrangements, and to do all acts and
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things as may be necessary to permit the Corporation to exercise its rights or perform its obligations thereunder. In respect of an Industry Agreement or other agreements and arrangements entered into by the Corporation from time to time, each Dealer Member:
(a) shall promptly pay all regular and special assessments levied or prescribed by the IPF in respect of such Dealer Member; (b) shall provide to the IPF such information as is contemplated to be provided by a Dealer Member in connection with the assessment of the financial condition of Dealer Members or risk of loss to the IPF; (c) acknowledges and consents to the exchange between the Corporation and the IPF of information relating to Dealer Members, their partners, directors, officers, shareholders, employees and agents, customers or any other persons permitted by law in accordance with any information sharing agreements or arrangements made by them; (d) shall permit the IPF to conduct reviews of such Dealer Member or designated groups of Dealer Members as contemplated by the Industry Agreement or other arrangements and to fully cooperate with the IPF, and its staff and advisers, in connection with such reviews; and (e) shall comply with such actions as the IPF may direct the Corporation to take with respect to a Dealer Member, or with such actions as the IPF may take on behalf of the Corporation as authorized.
Section 14.5 Notices, Guidelines, Etc.
The Corporation may develop and issue to Regulated Persons such guidelines, notices, interpretations, procedures, practices and other communications relevant to the By-laws and Rules or the business and activities of a Regulated Person or any other person subject to the jurisdiction of the Corporation to supplement or assist in the interpretation, application of and compliance with the By-laws and Rules.
Section 14.6 Continuing Jurisdiction and Discipline and Enforcement under the Rules
(1) Any Regulated Person, in accordance with the provision of any Rule, shall remain subject to the jurisdiction of the Corporation in respect of any action or matter that occurred while that person was subject to the By-laws and Rules, including for certainty any predecessor by-laws or rules of IIROC or the MFDA in effect at the time of such action or matter, for such period of time and under such additional conditions as may be provided in the Rules. (2) The Rules shall provide the practice and procedure to be followed by the Corporation in connection with the commencement and conduct of a disciplinary hearing and shall establish the penalties or remedies that may be imposed by the Corporation on a Regulated Person for failure to comply with any Rules.
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Section 14.7 Exchange of Information, Agreements
(1) To assist the Recognizing Regulators in carrying out their regulatory mandates, the Corporation must proactively and transparently share information or data and cooperate with the Recognizing Regulators. (2) To assist other regulatory authorities in carrying out their regulatory mandates, the Corporation will cooperate and may, as appropriate, proactively and transparently share information or data and cooperate with, whether domestic or foreign, exchanges, selfregulatory organizations, clearing agencies, financial intelligence or law enforcement agencies or authorities, banking, financial services or other financial regulatory authorities and investor protection or compensation funds. (3) The cooperation contemplated by paragraphs (1) and (2) above includes the collection and sharing of information or data and other forms of assistance for the purpose of registration, market surveillance, investigations, enforcement litigation, investor protection and compensation and for any other regulatory purpose and is subject to applicable laws related to information sharing and protection of personal information. (4) The Corporation may enter into an agreement with any entity described in paragraphs (1) and (2) above to collect and exchange information (including information obtained by the Corporation pursuant to the By-Laws or Rules or otherwise in its possession) and to provide for any other forms of mutual assistance for the purpose of registration, market surveillance, investigation, enforcement litigation, investor protection and compensation and for any other regulatory purpose. (5) The sharing of information and data by the Corporation pursuant to this Section 14.7 is subject to applicable laws and the terms of the Recognition Orders.
ARTICLE 15
NO ACTIONS
Section 15.1 No Actions Against the Corporation
No Regulated Person (including in all cases a Member whose rights and privileges have been suspended or terminated and a Member who has been expelled from the Corporation or whose membership has been forfeited) shall be entitled, subject to the rights of appeal granted under the By-laws, Rules or applicable securities legislation, and further subject to any specific contractual rights that a Regulated Person may have in respect of a contract or other agreement to which the Corporation is a party, to commence or carry on any action or other proceedings against the Corporation or against the Board, or any Indemnified Party, against an IPF, its board of directors, or any committees or officers, employees and agents of the foregoing, in respect of any penalty imposed or any act or omission done or omitted under the provisions of and in compliance with or intended compliance with the provisions of the Articles, By-laws or Rules and, in the case of an IPF, done or omitted under the provisions of and in compliance with or intended compliance with the provisions of its letters patent or articles, by-laws and policies, and in any case under any legislation or regulatory directives or agreements thereunder.
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Section 15.2 No Liabilities Arising in Respect of Entities in which Corporation Holds an
Interest
The Corporation shall not be liable to a Regulated Person (including in all cases a Member whose rights and privileges have been suspended or terminated and a member who has been expelled from the Corporation or whose membership has been forfeited) for any loss, damage, costs, expense, or other liability arising from any act or omission of any corporation or other entity in which the Corporation holds an equity or participating interest, including without limitation FundSERV Inc.
ARTICLE 16
USE OF NAME OR LOGO: LIABILITIES: CLAIMS
Section 16.1 Use of Name
No Member shall use the name or logo of the Corporation or its predecessors, including IIROC or the MFDA, on letterheads or in any circulars or other advertising or publicity matter, except to the extent and in such form as may be authorized by the Board. The Board may at its sole discretion require a Member to cease using the name or logo of the Corporation. Any use by a Member of the name or logo of the Corporation shall not have the effect of granting to the Member any proprietary interest in the Corporation’s name or logo.
Section 16.2 Liabilities
No liability shall be incurred in the name of the Corporation by any Member, officer or committee without the authority of the Board.
Section 16.3 Claims
Whenever the membership of a Member ceases for any reason whatsoever, neither the former Member nor its heirs, executors, administrators, successors, assigns or other legal representatives, shall have any interest in or claim on or against the funds and property of the Corporation.
ARTICLE 17
TRANSITION PERIODS FOR BY-LAWS AND RULES
Section 17.1 Transition Periods for By-laws and Rules
The Board may suspend or modify the application of any By-law or Rule, or provision thereof, for such period of time as it may determine in its sole discretion in order to facilitate the orderly application of and compliance with such By-law or Rule to or by all or any number or class of Regulated Persons. Any suspension or modification may be made either before or after the relevant By-law or Rule has become effective, and notice of the suspension or modification shall be given promptly to all Regulated Persons and to the securities regulatory authority in any jurisdiction where such By-law or Rule would otherwise be in effect. No suspension or modification shall unreasonably discriminate between Members or other persons subject to the jurisdiction of the Corporation and no such modification shall impose on all or any of the Members
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or other persons subject to the jurisdiction of the Corporation a requirement that is more onerous or strict than the requirements of the By-law or Rule that is subject to the modification.
ARTICLE 18
AMENDMENT, REPEAL, ENACTMENT OF BY-LAWS
Section 18.1 By-laws
(1) The Board may, by resolution, make, amend, or repeal any By-laws that regulate the activities or affairs of the Corporation and shall submit the By-law, amendment, or repeal to the Members at the next meeting of Members. The Members may, by resolution in accordance with Section 4.7(c), confirm, reject, or amend the By-law, amendment, or repeal. The By-law, amendment, or repeal shall only be effective from the date on which the Members confirm, reject, or amend the By-law, amendment, or repeal. (2) The right of Members to vote to confirm, reject or amend a By-law, or exercise other rights granted to Members under the Act, is subject to the authority, pursuant to applicable securities laws and the Recognition Orders, of the securities commissions and securities regulatory authorities to make any decisions relating to the By-laws of Corporation. In the event of an inconsistency between the By-laws and any direction provided by a securities commission or securities regulatory authority to the Corporation, the direction provided by the securities commission or securities regulatory authority will govern. (3) The By-law shall become effective at the effective time of the Amalgamation and at such time the By-laws of the predecessors of the Corporation shall be repealed. Such repeal shall not affect the previous operation of any By-law or affect the validity of any act done or right or privilege, obligation, or liability acquired or incurred under, or the validity of any contract or agreement made pursuant to any such By-law prior to its repeal. All directors, officers, and person acting under any By-law so repealed shall continue to act as if appointed under the provisions of this By-law and all resolutions of the Members and of the Board with continuing effect passed under any repealed By-law shall continue as good and valid except to the extent inconsistent with this By-law and until amended or repealed.
ARTICLE 19AUDITOR
Section 19.1 Auditor
The Members shall, at each annual meeting, appoint an auditor to audit the accounts of the Corporation for report to the Members at the next annual meeting. The auditor shall hold office until the next annual meeting provided that the Directors may fill any casual vacancy in the office of the auditor. The remuneration of the auditor shall be fixed by the Board.
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ARTICLE 20
BOOKS AND RECORDS
Section 20.1 Books and Records
The Board shall see that all necessary books and records of the Corporation required by the By-laws of the Corporation or by any applicable statute or law are regularly and properly kept, including maintaining the confidentiality of such books and records when applicable.

34161784.17
BY-LAW NO. 1 being a General By-law of [New SRO] NEW SELF-REGULATORY ORGANIZATION OF CANADA (hereinafter referred to as the “Corporation”)
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ARTICLE 1 INTERPRETATION 5
Section 1.1 Definitions 5
Section 1.2 Interpretation 8
Section 1.3 Meaning of Independence 89
ARTICLE 2 AFFAIRS OF THE CORPORATION 101
Section 2.1 Public Interest Mandate 101
Section 2.2 Seal 112
Section 2.3 Head Office 112
Section 2.4 Financial Year 12
Section 2.5 Execution of Instruments 12
Section 2.6 Banking Arrangements 12
Section 2.7 Voting Rights In Other Bodies Corporate 12
Section 2.8 Divisions 123
Section 2.9 Quebec Activities 13
ARTICLE 3 CONDITIONS OF MEMBERSHIP 13
Section 3.1 Entitlement 13
Section 3.2 Dealer Members 134
Section 3.3 Marketplace Members 134
Section 3.4 Fees 134
Section 3.5 Process for Approval for Membership of Dealer Members 14
Section 3.6 Acceptance of Membership for Marketplace Members 167
Section 3.7 Amalgamation of Members 17
Section 3.8 Dealer Member Resignation 17
Section 3.9 Dealer Member Removal 17
Section 3.10 Transferability, Reorganizations 178
Section 3.11 Ceasing to Carry on Business 178
Section 3.12 Ownership 18
ARTICLE 4 MEMBERS’ MEETINGS 18
Section 4.1 Annual Meeting 18
Section 4.2 Special or General Meetings 18
Section 4.3 Quorum 189
Section 4.4 List of Members Entitled to Notice 189
Section 4.5 Notice 19
Section 4.6 Absentee Voting 19
Section 4.7 Votes 20
Section 4.8 Participation in Meetings by Telephonic or Electronic Means 201
Section 4.9 Chair, Secretary and Scrutineers 21
Section 4.10 Persons Entitled to be Present 21

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Section 4.11 Show of Hands 212
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Section 4.12 Ballots 212
Section 4.13 Adjournment 22
ARTICLE 5 BOARD OF DIRECTORS 22
Section 5.1 Number and Qualifications 22
Section 5.2 Director Representation 22
Section 5.3 Recommendation of Director Nominees for Election 223
Section 5.4 Election and Term 223
Section 5.5 Vacancies 234
Section 5.6 Filling Vacancies 24
Section 5.7 Remuneration of Directors 245
Section 5.8 Release of Claims 245
ARTICLE 6 POWERS OF DIRECTORS 245
Section 6.1 Administer Affairs 245
Section 6.2 Expenditures 25
Section 6.3 Borrowing Power 25
Section 6.4 Conflict of Interest 256
ARTICLE 7 DIRECTORS’ MEETINGS 267
Section 7.1 Place of Meeting 267
Section 7.2 Calling of Meetings 267
Section 7.3 Notice of Meetings 267
Section 7.4 Adjourned Meeting 267
Section 7.5 Regular Meetings 27
Section 7.6 Chair of Meetings of the Board 27
Section 7.7 Voting Rights 278
Section 7.8 Participation in Meetings by Telephonic or Electronic Means 278
Section 7.9 Quorum 278
Section 7.10 Minutes of Meetings 28
ARTICLE 8 OFFICERS 28
Section 8.1 Appointment 28
Section 8.2 Chair and Vice-Chair of the Board 289
Section 8.3 President and Chief Executive Officer 289

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Section 8.4 Vice-President 289
Section 8.5 Secretary 289
Section 8.6 Powers and Duties of Other Officers 29
Section 8.7 Variation of Powers and Duties 29
Section 8.8 Term of Office 29
Section 8.9 Terms of Employment and Remuneration 2930
Section 8.10 Conflict of Interest 2930
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Section 8.11 Agents and Attorneys 2930
ARTICLE 9 PROTECTION OF DIRECTORS AND OTHERS 2930
Section 9.1 Limitation of Liability 2930
Section 9.2 Indemnities to Directors and Others 30
Section 9.3 Insurance 301
ARTICLE 10 REGIONAL COUNCILS 31
Section 10.1 Designation of Regions 31
Section 10.2 Composition of Regional Councils 312
Section 10.3 Duties and Powers 312
Section 10.4 Meetings of Regional Members 312
ARTICLE 11 DISTRICT HEARING COMMITTEES 32
Section 11.1 Designation of Districts 32
Section 11.2 District Hearing Committees 323
ARTICLE 12 COMMITTEES AND ADVISORY BODIES 33
Section 12.1 Committees of the Board 33
Section 12.2 Governance Committee 334
Section 12.3 Finance, Audit and Risk Committee 334
Section 12.4 Human Resources and Pension Committee 334
Section 12.5 Appointments Committee 334
Section 12.6 Committee Meetings 34
Section 12.7 Advisory Bodies 34
Section 12.8 Procedure 345
ARTICLE 13 NOTICES 345
Section 13.1 Method of Giving Notices 345
Section 13.2 Undelivered Notices 35
Section 13.3 Omissions and Errors 35
Section 13.4 Waiver of Notice 356
ARTICLE 14 RULES AND OTHER INSTRUMENTS 356
Section 14.1 Power to Make, Amend or Repeal Rules 356
Section 14.2 Forms and Other Instruments 36
Section 14.3 Use of Restricted Fund 36
Section 14.4 Investor Protection Fund 36
Section 14.5 Notices, Guidelines, Etc. 37

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Section 14.6 Continuing Jurisdiction and Discipline and Enforcement under the
Rules 37

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Section 14.7 Exchange of Information, Agreements 378
ARTICLE 15 NO ACTIONS 378
Section 15.1 No Actions Against the Corporation 378
Section 15.2 No Liabilities Arising in Respect of Entities in which Corporation
Holds an Interest 389
ARTICLE 16 USE OF NAME OR LOGO: LIABILITIES: CLAIMS 389
Section 16.1 Use of Name 389
Section 16.2 Liabilities 389
Section 16.3 Claims 389
ARTICLE 17 TRANSITION PERIODS FOR BY-LAWS AND RULES 39
Section 17.1 Transition Periods for By-laws and Rules 39
ARTICLE 18 AMENDMENT, REPEAL, ENACTMENT OF BY-LAWS 3940
Section 18.1 By-laws 3940
ARTICLE 19 PUBLIC ACCOUNTANTAUDITOR 40
Section 19.1 Public AccountantAuditor 40
ARTICLE 20 BOOKS AND RECORDS 401
Section 20.1 Books and Records 401

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Section 1.1 Definitions

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ARTICLE 1
ARTICLE 1
INTERPRETATION
Section 1.1 Definitions
In this By-law, unless the context otherwise specifies or requires:
“Act” means the Canada Not-for-profit Corporations Act, S.C. 2009, c. C-23 and the regulations thereto, as from time to time amended and every statute that may be substituted therefor and, in the case of such substitution, any references in the By-laws to provisions of the Act shall be read as references to the substituted provisions therefor in the new statute or statutes. “affiliated entity” has the meaning ascribed to it in subsection 1.3(1) of National Instrument 52- 110 Audit Committees. “Amalgamation” means the amalgamation of IIROC and the MFDA to form the Corporation pursuant to section 204 of the Act. “Approved Person” means “Approved Person” within the meaning of the relevant Rules. “Articles” means the articles of amalgamation of the Corporation and includes any articles of amendment. “Associate”, where used to indicate a relationship with any person, means:
(a) any company of which such person beneficially owns, directly or indirectly, voting securities carrying more than ten percent (10%) of the voting rights attached to all voting securities of the company for the time being outstanding; (b) a partner of that person; (c) any trust or estate in which such person has a substantial beneficial interest or as to which such person serves as trustee or in a similar capacity; (d) any relative of that person who resides in the same home as that person; (e) any person who resides in the same home as the person and to whom that person is married or with whom that person is living in a conjugal relationship outside of marriage; or (f) any relative of a person mentioned in clause (e) above, who has the same home as that person. “auditor” of the Corporation means a public accountant, as defined in the Act, appointed for the Corporation.

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“By-laws” means this By-law and any other by-law of the Corporation from time to time in force and effect. “Board” means the Board of Directors of the Corporation.

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“Chair” means the Independent Director elected by the Board to act as its chair. “control” has the meaning ascribed to it in section 1.4 of National Instrument 45-106 Prospectus Exemptions. “Corporation” means [New SRO] and, for the purposes of Section 1.3, includes either of its predecessors and any affiliated entitySelf-Regulatory Organization of Canada. “Dealer Member” means a Member that is registered as an investment dealer or a mutual fund dealer in accordance with securities legislation. “Director” means a member of the Board. “District” means a geographic area in Canada designated as a district of the Corporation pursuant to Section 11.1.1. “District Hearing Committee” means each of the hearing committees created in accordance with Article 11. “executive officer” has the meaning ascribed to it in section 1.1 of National Instrument 52-110 Audit Committees. “Form” means a form prescribed or provided for by the By-Laws or the Rules. “IIROC” means the Investment Industry Regulatory Organization of Canada, a predecessor corporation to the Corporation. “immediate family member” has the meaning ascribed to it in section 1.1 of National Instrument 52-110 Audit Committees. “Indemnified Party” means each Protected Party and any other person who has undertaken or is about to undertake any liability on behalf of the Corporation, or any entity controlled by it, which the Corporation determines to indemnify in respect of such liability and their respective heirs, executors, administrators, and estates and effects, respectively. “Independent Director” means a Director who is Independent within the meaning of Section 1.3. “Industry Agreement” means thean agreement dated , 2022 made between the Corporation and thean IPF, as the same may be amended or replaced from time to time. “Information Processor Recognition Orders” means the recognition order obtained from the Autorité des marchés financiers and the designation orders and undertakings governing the Corporation’s designation as information processor for government and corporate debt securities. “IPF” means the Canadian Investor Protection Fund or the MFDA Investor Protection Corporation or any of their successors.

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“Marketplace” means:
(a) a recognized exchange or a commodity futures exchange registered in a jurisdiction of Canada; (b) a recognized quotation and trade reporting system; or (c) a person or company not included in clause (a) or (b) above that facilitates the trading of securities or derivatives in a jurisdiction of Canada; and (i) constitutes, maintains or provides a market or facility for bringing together buyers and sellers of securities or derivatives; (ii) brings together the orders for securities or derivatives of multiple buyers and sellers; and (iii) uses established non-discretionary methods under which the orders interact with each other, and the buyers and sellers entering the orders agree to the terms of a trade. “Marketplace Member” means a Member that is a Marketplace. “Member” means a person admitted to membership in the Corporation or who was a member of IIROC or the MFDA at the time of the Amalgamation, and who has not ceased, resigned or terminated membership in the Corporation in accordance with the provisions of Article 3. “MFDA” means the Mutual Fund Dealers Association of Canada, a predecessor corporation to the Corporation. “National Council” means the national council created in accordance with Article 10. “Non-Independent Director” means a Director who is not an Independent Director. “President” means the president and chief executive officer of the Corporation appointed in accordance with Section 8.3. “Protected Party” means every current and former Director, officer, employee, committee member (whether a committee of the Board or other committee of the Corporation), and his or her heirs, executors, administrators, estate and effects or any other person acting on behalf of the Corporation. “Recognition Orders” means the recognition orders for the Corporation issued and approved by each securities regulatory authoritythe Recognizing Regulators, recognizing the Corporation as a self-regulatory organization. “Recognizing Regulators” means (i) the Alberta Securities Commission; (ii) the Autorité des marchés financiers; (iii) the British Columbia Securities Commission; (iv) the Manitoba Securities Commission; (v) the Financial and Consumer Services Commission (New

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Brunswick); (vi) Office of the Superintendent of Securities, Northwest Territories; (vii) Nova Scotia Securities Commission; (viii) Office of the Superintendent of Securities, Digital Government and Services, Newfoundland and Labrador; (ix) Office of the Superintendent of Securities, Nunavut; (x) the Ontario Securities Commission; (xi) Prince Edward Island Office of the Superintendent of Securities; (xii) Financial and Consumer Affairs Authority of Saskatchewan; and (xiii) Office of the Yukon Superintendent of Securities. “Region” means a geographic area in Canada designated as a region of the Corporation pursuant to Section 10.1. “Regional Council” means each of those councils created in accordance with Article 10. “Regulated Persons” means persons who are or were formerly (i) Dealer Members, including for greater certainty, members of the Corporation’s predecessors, (ii) members, users or subscribers of or to, or other entities that are allowed to trade directly on, Marketplaces for which the Corporation is the regulation services provider, (iii) the respective Approved Persons and other representatives as designated in the Rules of any of the foregoingof those persons set out in subsection (i) and (ii) , and (iv) other persons subject to the jurisdiction of the Corporation. “Restricted Fund” means monetary sanctions received by the Corporation. “Rules” means the Rules made pursuant to Section 14.1. “Significant Interest” means in respect of any person the holding, directly or indirectly, of the securities of such person carrying in aggregate 10% or more of the voting rights attached to all of the person’s outstanding voting securities. “Vice-Chair” means a Director elected by the Board to act as its vice-chair.
Section 1.2 Section 1.2 Interpretation
(1) Unless otherwise defined or interpreted in this By-law or the Rules, every term used in this By-law or the Rules that is:
(a) defined in subsection 1.1(3) of National Instrument 14-101 –– Definitions has the meaning ascribed to it in that subsection; and (b) defined or interpreted in National Instrument 21-101 -– Marketplace Operation has the meaning ascribed to it in that National Instrument. (2) The provisions of this By-law and the Rules are subject to applicable laws. Subject to the By-laws and the Rules, any reference in this By-law or the Rules to a statute or a National Instrument refers to such statute or National Instrument and all rules and regulations made under it, as it may have been or may from time to time be amended or re-enacted. (3) In this By-law and the Rules and in all other By-laws hereafter passed and the Rules from time to time, unless the context otherwise requires, words importing the singular number or the masculine gender shall include the plural number or the feminine gender, as the

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case may be, and vice versa, and references to persons shall include, individuals, corporations, limited partnerships, general partnerships, joint ventures, associations, companies, trusts, societies or other entities, organizations and syndicates whether incorporated or not, trustees, executors, or other legal personal representatives, and any government or agency thereof. In the event of any dispute as to the meaning of the Articles, By-laws or Rules, the interpretation of the Board shall be final and conclusive.
Section 1.3 Section 1.3 Meaning of Independence
(1) The term “Independent Director” means a Director who has no direct or indirect material relationship with the Corporation or a Member. (2) For the purposes of subsection (1), a “material relationship” is a relationship which, having regard to all relevant circumstances, could interfere with or be reasonably expectedperceived to interfere with the exercise of a Director’s independent judgment. (3) For greater certainty, relationships with the Corporation described in this Section 1.3 include relationships with the Corporation’s predecessors or affiliated entities. (4) (3)Despite subsection (1), the following individuals are considered to have a material relationship with the Corporation or a Member:
(a) an individual who is, or has been within the last three years, an employee or executive officer of the Corporation; (b) an individual whose immediate family member is, or has been within the last three years, an executive officer or non-independent director of the Corporation; (c) an individual who, or whose immediate family member, is or has been within the last three years, an executive officer of an entity if any of the Corporation’s current executive officers serves or served at that same time on the entity’s compensation committee; (d) an individual who received, or whose immediate family member who is employed as an executive officer of the Corporation received, more than $75,000 in direct compensation from the Corporation during any 12 month period within the last three years; (e) an individual who is, or has been within the last three years, a partner, director, officer, employee, or person acting in a similar capacity of:
(i) a Member,
(ii) an Associate of a Member, or
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(f) an individual who is, or has been within the last three years, an Associate of a partner, director, officer, employee, or person acting in a similar capacity of a Member. (5) (4)For the purposes of paragraph (3)(d), direct compensation does not include:
(a) remuneration for acting as a member of the Board or of any Board committee of the Corporation, and (b) the receipt of fixed amounts of compensation under a retirement plan (including deferred compensation) for prior service with the Corporation if the compensation is not contingent in any way on continued service. (6) (5)Despite subsection (3), an individual will ordinarily not be considered to have a material relationship with the Corporation solely because the individual or his or her immediate family member:
(a) has previously acted as an interim chief executive officer of the Corporation, or (b) acts, or has previously acted, as a chair or vice-chair of the Board or of any Board committee of the Corporation on a part-time basis. (7) (6)If, despite the three-year cooling-off period described in sections 3(e) and (f), the nature or duration of an individual’s relationship with a Member, its Associates, or its affiliated entities could be reasonably expected to interfere with the exercise of that individual’s independent judgment, then a sufficiently longer cooling-off period from the Member, Associate, and affiliated entity is required for that individual to be considered an Independent Director. (8) (7)Despite any determination made under sections (2) to (6), an individual is considered to have a material relationship with the Corporation if the individual:
(a) accepts, directly or indirectly, any consulting, advisory or other compensatory fee from the Corporation or any subsidiary entity of the Corporation, other than as remuneration for acting in his or her capacity as a member of the Board or any Board committee, or as a part-time chair or vice-chair of the Board or any Board committee; or (b) is an affiliated entity of the Corporation or any of its subsidiary entities. (9) (8)For the purposes of section (7), the indirect acceptance by an individual of any consulting, advisory or other compensatory fee includes acceptance of a fee by:
(a) an individual’s spouse, minor child or stepchild, or a child or stepchild who shares the individual’s home; or (b) an entity in which such individual is a partner, member, an officer such as a managing director occupying a comparable position or executive officer, or

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occupies a similar position (except limited partners, non-managing members and those occupying similar positions who, in each case, have no active role in providing services to the entity) and which provides accounting, consulting, legal, investment banking or financial advisory services to the Corporation or any subsidiary entity of the Corporation. (10) (9)For the purposes of section (7), compensatory fees do not include the receipt of fixed amounts of compensation under a retirement plan (including deferred compensation) for prior service with the Corporation if the compensation is not contingent in any way on continued service.
ARTICLE 2
ARTICLE 2
AFFAIRS OF THE CORPORATION
Section 2.1 Section 2.1 Public Interest Mandate
The Corporation shall act in the public interest by, without limitation:
(a) protecting investors from unfair, improper, or fraudulent practices by its Members; (b) fostering fair and efficient capital markets and promoting market integrity; (c) fostering public confidence in capital markets; (d) facilitating investor education; (e) administering a fair, consistent and proportionate continuing education program for all Dealer Members and applicable Approved Persons; (f) accommodating innovation and ensuring flexibility and responsiveness to the future needs of the evolving capital markets, without compromising investor protection; (g) providing effective market surveillance; (h) fostering efficient and effective cooperation and coordination with each securities regulatory authority to ensure regulatory alignment; (i) facilitating access to advice and products for investors of different demographics; (j) recognizing and incorporating regional considerations and interests from across Canada;

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(k) facilitating meaningful consultation and input from all types of Members and ensuring that investor perspectives are factored into the development and implementation of regulatory policies; (l) administering robust, compliance, and enforcement andprocesses; (m) ensuring that the complaint handling and resolution processes of the Corporation and the complaint handling requirements the Corporation imposes on its Members are accessible to, and provide clear understandable guidance for, complainants, and deal with complaints fairly and efficiently; (n) (m)contributing to financial stability, under the direction of the securities regulatory authorities; and (o) (n)administering effective governance and accountability to all stakeholders and preventing regulatory capture.
Section 2.2 Section 2.2 Seal
The Corporation may adopt a seal by resolution of the Board.
Section 2.3 Section 2.3 Head Office
Until changed in accordance with the Act, the head office of the Corporation shall be in the City of Toronto, in the Province of Ontario.
Section 2.4 Section 2.4 Financial Year
Until changed by the Board, the financial year of the Corporation shall end on the last day of March in each year.
Section 2.5 Section 2.5 Execution of Instruments
Transfers, assignments, contracts, obligations, certificates and other instruments may be signed on behalf of the Corporation by any two officers of the Corporation appointed in accordance with Article 8 of this By-law. In addition, the Board may from time to time direct the manner in which and the person or persons by whom any particular instrument or class of instruments may or shall be signed. Any signing officer may affix the corporate seal to any instrument requiring the same, but it is not necessary to bind the Corporation.
Section 2.6 Section 2.6 Banking Arrangements
The banking arrangements of the Corporation including, without limitation, the borrowing of money and the giving of security therefor, shall be transacted with such banks, trust companies or other bodies corporate or organizations as may from time to time be designated by or under the authority of the Board. Such banking business or any part thereof shall be transacted under such agreements, instructions and delegations of powers as the Board may from time to time prescribe or authorize.

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Section 2.7 Section 2.7 Voting Rights In Other Bodies Corporate
Any two officers of the Corporation appointed in accordance with Article 8 of this By•-law may execute and deliver proxies and arrange for the issuance of voting certificates or other evidence of the right to exercise the voting rights attaching to any securities held by the Corporation. Such instruments, certificates or other evidence shall be in favour of such person or persons as may be determined by the officers executing such proxies or arranging for the issuance of voting certificates or such other evidence of the right to exercise such voting rights. In addition, the Board may from time to time direct the manner in which and the person or persons by whom any particular voting rights or class of voting rights may or shall be exercised.
Section 2.8 Section 2.8 Divisions
In addition to any other powers of the Board, the Board may, subject to the terms of the Recognition Orders and without further approval, cause the operations of the Corporation or any
part thereof to be divided or segregated into one or more divisions upon such basis, including
without limitation, character or type of operations, or geographical regions as the Board may consider appropriate in each case. From time to time the Board, or if authorized by the Board, the President, may authorize, upon such basis as may be considered appropriate in each case:
(a) Sub-Division and Consolidation: The further division of the operations of any such division into sub-units and the consolidation of the operations of any such divisions and sub-units; (b) Name: The designation of any such division or sub-unit by, and the carrying on of the operations of any such division or sub-unit, under a name other than the name of the Corporation; provided that the Corporation shall set out its name in legible characters in all contracts, invoices, negotiable instruments and orders for goods or services issued or made by or on behalf of the Corporation; and (c) Officers: The appointment of officers for any such division or sub-unit, the determination of their powers and duties, and the removal of any such officer so appointed without prejudice to such officer’s rights under any employment contract or in law, provided that any such officers shall not, as such, be officers of the Corporation, unless expressly designated as such in accordance with Article 8 of this By-law.
Section 2.9 Section 2.9 Quebec Activities
The constating documents, By-laws and Rules of the Corporation will allow that the power to make decisions relating to the supervision of the Corporation’s activities in Quebec will be exercised mainly by persons residing in Quebec.

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ARTICLE 3ARTICLE 3
CONDITIONS OF MEMBERSHIP
Section 3.1 Section 3.1 Entitlement
The Board shall, in its discretion, decide (and may delegate to a committee of the Board or an officer of the Corporation the authority to so decide) upon all issues pertaining to eligibility for membership in accordance with the By-laws and Rules of the Corporation. The Board may, by the affirmative vote of a majority of the Directors at a meeting of the Board and confirmed by the Members in accordance with Article 18, amend the By-law and Articles to add additional classes of Members and determine the rights and obligations pertaining to any added class. Initially there shall be two classes of Members, being (i) Marketplace Members; and (ii) Dealer Members.
Section 3.2 Section 3.2 Dealer Members
Subject to the By-laws, the Articles, and the Act, Dealer Members shall be entitled to the rights and entitlements, and shall be subject to the obligations, attaching to all Members.
Section 3.3 Section 3.3 Marketplace Members
Subject to the By-laws, the Articles, and the Act, Marketplace Members shall be entitled to the rights and entitlements, and shall be subject to the obligations, attaching to all Members.
Section 3.4 Section 3.4 Fees
Membership and other fees and assessments may be established by the Board in the amounts and in accordance with the terms and conditions established by or under the authority of the Board. Fees shall be imposed on an equitable basis and, as a matter of best efforts, on a cost recovery basis to the extent practicable.
Section 3.5 Section 3.5 Process for Approval for Membership of Dealer Members
(1) An application for membership must be submitted to the Corporation in the form and executed in the manner prescribed by or under the authority of the Board, and shall be accompanied by such fees, information and documents as the Corporation may require. (2) Any firm shall be eligible to apply for membership as a Dealer Member if:
(a) It is formed under the laws of one of the provinces or territories of Canada and, where the firm is a corporation, it is incorporated under the laws of Canada or one of its provinces or territories; (b) It carries on, or proposes to carry on, business in Canada as an investment dealer or mutual fund dealer, as applicable, and is registered or licensed in each jurisdiction in Canada where the nature of its business requires such registration or licensing, and is in compliance with such legislation and the requirements of any securities commission having jurisdiction over the applicant; and

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(c) Its directors, officers, partners, investors and employees, and its holding companies, affiliated entities and related companies (if any), would comply with the By-laws and Rules of the Corporation that would apply to them if the applicant were a Dealer Member. (3) An application for membership shall be accompanied by a non-refundable application review deposit in an amount to be determined by the Board, to be credited towards the annual fee paid by the Member in the event that the application is approved by the Board. Where, for any reason that cannot reasonably be attributed to the Corporation or its staff, the application process (other than an application of an alternative trading system) has not been completed within six months from the date the application was accepted for review by the Corporation, the deposit shall be forfeited to the Corporation and the application shall be required to be resubmitted with a new nonrefundable application review deposit. For purposes of this Section, the application process shall be considered to be completed when Corporation staff recommends to the Board the approval or rejection thereof. (4) If in connection with the review or consideration of any application for membership, the Board is of the opinion that the nature of the applicant’s business, its financial condition, the conduct of its business, the completeness of the application, the basis on which the application was made or any Corporation review in respect of the application in accordance with the By-laws and Rules of the Corporation has required, or can reasonably be expected to require, excessive attention, time and resources of the Corporation, the Board may require the applicant to reimburse the Corporation for some or all of its costs and expenses which are reasonably attributable to such excessive attention, time and resources or provide an undertaking or security in respect of such reimbursement. If an applicant is to be required to make such reimbursement of costs and expenses, the Corporation shall provide to the applicant a breakdown and explanation of such costs and expenses in sufficient detail to permit the applicant to understand the basis on which the costs and expenses were or are to be calculated. (5) The process for review and approval of the application for membership shall be determined by or under the authority of the Board, and the Corporation shall make a preliminary review of the same and either:
(a) Where the application is incomplete, provide the applicant with a deficiency letter listing the items missing from or incomplete in the application, and, once Corporation staff have determined that the deficiencies have been addressed, perform a compliance review as referred to in Section 3.5(5)(b); or (b) Where the application is complete, perform a compliance review and either:
(i) If such review discloses substantial compliance and willingness to comply with the requirements of the By-laws and Rules of the Corporation and approval of the application is considered to be in the public interest, forward a Corporation staff recommendation to approve the application to the Board for consideration along with the membership application; or

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(ii) If such review discloses any substantial non-compliance or unwillingness to comply with the requirements of the By-laws and Rules of the Corporation, notify the applicant as to the nature of such non-compliance or unwillingness to comply and request that the application for membership be amended in accordance with the notification of the Corporation and refiled or be withdrawn. Once Corporation staff have determined that the necessary amendments have been made to the refiled application for membership, forward a Corporation staff recommendation to approve the application to the Board for consideration along with the membership application. If the applicant declines to amend or withdraw the application for membership, forward a Corporation staff recommendation to refuse the application to the Board for consideration along with the membership application and provide a copy of the recommendation to the applicant; or (iii) If such review indicates that approval of the application is not in the public interest, notify the applicant as to the nature of the public interest concerns and request that the application for membership be withdrawn. If the applicant declines to withdraw the application for membership, forward a Corporation staff recommendation to refuse the application to the Board for consideration along with the membership application and provide a copy of the recommendation to the applicant. (6) The membership application approval process, as set out in the Corporation’s By-laws and Rules established from time to time, shall commence once the Board receives:
(a) The membership application from Corporation staff; and (b) The Corporation staff recommendation to either approve or refuse the application pursuant to Section 3.5(5). (7) The Board shall, in its discretion and pursuant to the membership application approval process, as set out in the Corporation’s By-laws and Rules established from time to time, decide (and may delegate to a committee of the Board or an officer of the Corporation the authority to so decide) upon all applications for membership. The applicant and Corporation staff shall have an opportunity to be heard in respect of any decision proposed to be made under this Section 3.5(7). (8) If the Board approves an application subject to terms and conditions as determined by or under the authority of the Board or refuses an application, the applicant shall be provided with a statement of the grounds upon which the Board has approved the application subject to terms and conditions or refused the application, and the particulars of those grounds. (9) The Board may as it considers appropriate vary or remove any such terms and conditions as may have been imposed on an applicant, if such terms and conditions are or are no longer, as the case may be, necessary to ensure that the Corporation’s public interest

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mandate or the By-laws and Rules will be complied with by the applicant. In the event that the Board proposes to vary terms and conditions in a manner which would be more burdensome to the applicant, the provisions of Section 3.5(8) shall apply in the same manner as if the Board was exercising its powers thereunder in regard to the applicant. (10) If, pursuant to the provisions of Section 3.5(8), the Board approves an application subject to terms and conditions or refuses an application, the Board may order that the applicant may not apply for removal or variation of terms and conditions or reapply for approval, for such period as the Board provides. (11) Actions upon Approval of Application:
(a) If and when the application is approved by the Board, the Corporation shall compute the amount of the annual fee to be paid by the applicant. (b) If and when the application has been approved by the Board, and the applicant has, if required to do so, been duly licensed or registered under applicable law of the province or provinces or territories in Canada in which the applicant carries on or proposes to carry on business, and upon payment of the balance of the entrance and annual fees, the applicant shall become and be a Dealer Member; and (c) The Corporation shall keep a register of the names and business addresses of all Dealer Members and of their respective annual fees. The annual fees of Dealer Members shall not be made public by the Corporation.
Section 3.6 Section 3.6 Acceptance of Membership for Marketplace Members
If a Marketplace has requested that the Corporation act as the regulation services provider for that Marketplace, the Marketplace shall be accepted as a Marketplace Member effective upon the execution of an agreement with the Marketplace that has been authorized by the Board, for the Corporation to be the regulation services provider to that Marketplace. A Marketplace shall cease to be a Marketplace Member upon the termination of the agreement for the Corporation to be the regulation services provider to the Marketplace.
Section 3.7 Section 3.7 Amalgamation of Members
If two or more Members propose to amalgamate and continue as one Member, the continuing Member shall not be considered to be a new Member or be required to re-apply for membership, except as otherwise determined by the Board and provided that the continuing Member otherwise complies with the By-laws and Rules including the payment of Member fees, if applicable.
Section 3.8 Section 3.8 Dealer Member Resignation
Subject to Section 14.6, a Dealer Member wishing to resign shall address a letter of resignation to the Board in the form and containing such information prescribed by the Board which resignation shall become effective when approved by the Board, in accordance with the Rules. A Dealer Member resigning from the Corporation shall make full payment of its annual fee, if applicable, for the financial year in which its resignation becomes effective.

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Section 3.9 Section 3.9 Dealer Member Removal
Unless a Dealer Member has voluntarily resigned, the Board may terminate the membership of such Dealer Member in accordance with the By-laws and Rules. On the termination or resignation of a Dealer Member, the rights of the Dealer Member shall be determined in accordance with the By-laws and the Rules. The Rules regarding the discipline of Members are incorporated by reference in this By-law.
Section 3.10 Section 3.10 Transferability, Reorganizations
Membership is not transferable, unless approved by the Board. If the business or ownership of a Member is proposed to be reorganized or transferred, amalgamated or otherwise combined in whole or in part with another person (including another Member) in a manner which the Member or its business will cease to exist in, or will be substantially changed from, its then current form, or a change of control of the Member may occur, the Member (not less than 30 days prior to the proposed effective date of such event) shall give written notice to the Corporation. Upon receipt of such notice, the Corporation shall review the proposed transaction and may request from the Member, its auditors or any other person involved in the transaction, such information as it or the Board may consider necessary or desirable. The Corporation may either (a) approve the proposed transaction (which approval may be subject to terms and conditions) or (b) direct that the transaction not be completed if the Corporation determines in its sole discretion that the obligations of the Member to its clients cannot be satisfied or the By-laws and Rules will not be complied with by the Member or any continuing, new or reorganized entity, as the case may be.
Section 3.11
Section 3.11 Ceasing to Carry on Business
If a Member has ceased to carryno longer carries on business as any of an investment dealer, a mutual fund dealer or a Marketplace, as applicable, or its business has been acquired by a person which is not a Member of the Corporation, the Board may, unless the Member has voluntarily resigned in accordance with Section 3.8, terminate the Membership of the Member after the Member has been given the opportunity to be heard in accordance with the Rules. A former Member whose Membership has been terminated pursuant to the provisions of this Section 3.11 shall cease to be entitled to exercise any of the rights and privileges of Membership but shall remain liable to the Corporation for all amounts due to the Corporation from the former Member.
Section 3.12 Section 3.12 Ownership
Without limiting the generality of Section 14.1, the Board may make and from time to time amend and repeal Rules regarding the ownership of equity interests in Members.

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ARTICLE 4ARTICLE 4
MEMBERS’ MEETINGS
Section 4.1 Section 4.1 Annual Meeting
The annual meeting of the Members shall be held on a date to be determined by the Board, but in any case shall be held within six months after the end of the Corporation’s fiscal year. Each annual meeting shall be held at the head office of the Corporation or at any other place in Canada as the Board may determine. At every annual meeting, in addition to any other business that may be transacted, the report of the Directors, the financial statements and the report of the auditors shall be presented and auditors shall be appointed for the ensuing year.
Section 4.2 Section 4.2 Special or General Meetings
Members may consider and transact any business either special or general at any meeting of the Members. The Board, the Chair, Vice-Chair, the President, or a designated vice-president shall have power to call, at any time, a general meeting of the Members. The Board shall call a special general meeting of Members on written requisition of Members representing not less than five percent of the number of Members.
Section 4.3 Section 4.3 Quorum
Unless otherwise provided by the Act, the Articles or any other By-law, twenty percent of Members shall constitute a quorum at any meeting of the Members provided such Members are present in person or represented by a duly appointed proxyholder. If a quorum is present at the opening of any meeting of Members, the Members present or represented by proxy may proceed with the business of the meeting notwithstanding that a quorum is not present throughout the meeting. If a quorum is not present at the opening of any meeting of Members, the Chair or the Members present or represented by proxy may adjourn the meeting to a fixed time and place but may not transact any other business.
Section 4.4 Section 4.4 List of Members Entitled to Notice
For every meeting of Members, the Corporation shall prepare a list, in alphabetic order and arranged by class, of Members entitled to receive notice of and vote at the meeting. The Members listed shall be those registered at the close of business on the day immediately preceding the day on which notice of the meeting is given. The list shall be available for examination by any Member during usual business hours at the head office of the Corporation and at the meeting for which the list was prepared.
Section 4.5 Section 4.5 Notice
Twenty-one days notice shall be given to each Member, each Director, and the auditor of the Corporation, of any annual or special general meeting of Members in the manner prescribed by the Rules and policies. Notice of any meeting where special business will be transacted shall contain sufficient information to permit the Member to form a reasoned judgement on the decision to be taken upon which the Member is entitled to vote. Notice of each meeting of

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Members must remind the Member entitled to vote that the Member has the right to vote by proxy, and must attach a form of proxy.
Section 4.6 Section 4.6 Absentee Voting
(1) In addition to voting personally (or in the case of a Member who is a body corporate or association, by an individual authorized by a resolution of the Board or governing body of the body corporate or association to represent it at meetings of the Members of the Corporation), every Member entitled to vote at a meeting of Members shall have one vote, and may vote by any of the following means:
(a) by a proxy, provided that a person appointed by proxy must be a director, officer or employee of a Member or of an affiliated entity of a Member or a director of the Corporation; (b) by using a mailed-in ballot in the form provided by the Corporation provided that the Corporation has a system that enables the votes to be gathered in a manner that permits their subsequent verification and permits the tallied votes to be presented to the Corporation without it being possible for the Corporation to identify how each Member voted; or (c) by means of a telephonic, electronic or other communication facility, if the facility enables the votes to be gathered in a manner that permits their subsequent verification and permits the tallied votes to be presented to the Corporation without it being possible for the Corporation to identify how each Member voted; provided that a proxy, a mailed-in ballot, or any vote cast by means of a telephonic, electronic or other communication facility must be executed by the Member or the Member’s attorney authorized in writing or, if the Member is a body corporate or association, by an officer or employee of a Member or of an affiliated entity of a Member. (2) The Board may from time to time establish requirements regarding the lodging of proxies at some place or places other than the place at which a meeting or adjourned meeting of Members is to be held and for particulars of such proxies to be sent by facsimile or in writing before the meeting or adjourned meeting to the Corporation or any agent of the Corporation for the purpose of receiving such particulars and providing that proxies so lodged may be voted upon as though the proxies themselves were produced at the meeting or adjourned meeting and votes given in accordance with such requirements shall be valid and shall be counted. The chair of any meeting of Members may, subject to any requirements established as aforesaid, in the chair’s discretion accept facsimile or written communication as to the authority of any person claiming to vote on behalf of and to represent a Member notwithstanding that no proxy conferring such authority has been lodged with the Corporation, and any votes given in accordance with such facsimile or written communication accepted by the chair of the meeting shall be valid and shall be counted.

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(3) Voting by proxy, mailed-in ballot, or by means of a telephonic, electronic, or other communication facility shall comply with the procedures for collecting, counting, and reporting the results of any vote established by the Board from time to time. Such procedures are incorporated by reference in this By-law.
Section 4.7 Section 4.7 Votes
The voting rights of the Members at any meeting of Members shall be as follows:
(a) In the case of a vote for the election of Directors, each Member present at a meeting to elect such Directors shall have the right to exercise one vote; (b) In the case of a vote for the removal of a Director, each Member present at a meeting to consider the removal of the Director shall have the right to exercise one vote. A majority of the votes cast by the Members, voting together, present and carrying voting rights to remove a Director shall remove such Director from office; (c) In the case of a vote for the repeal, amendment or enactment of a By-law or to authorize an application for articles of amendment (including increasing the size of the Board or adding new classes of members) or to approve the sale or transfer of all or substantially all the Corporation’s assets, or an amalgamation or plan of arrangement, each Member shall have the right to exercise one vote at a meeting at which such approval is required, and except as required by the Articles or the Act, every such question shall be decided by at least two-thirds of the votes cast on the question by the Members, voting together, present and carrying voting rights; (d) On all other questions or matters to be decided at a meeting, each Member present at a meeting shall have the right to exercise one vote. A majority of votes cast by all Members, voting together, present and carrying voting rights shall decide the question or matter.
Section 4.8 Section 4.8 Participation in Meetings by Telephonic or Electronic Means
(1) A Member may participate in a meeting of the Members by means of a telephonic, electronic or other communication facility that permits all persons participating in the meeting to communicate adequately with each other, if the Corporation makes available such a communication facility. A Member participating in such a meeting by such means is deemed to be present at the meeting. (2) If the Board or Members call a meeting of Members, the Board or Members, as the case may be, may determine that the meeting shall be held entirely by means of a telephonic, electronic, or other communication facility that permits all participants to communicate adequately with each other during the meeting.

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(3) At the outset of each meeting referred to in subsection (1) or (2) and whenever votes are required, the chair of the meeting shall establish the existence of a quorum and unless a majority of the Members present at such meeting otherwise require, adjourn the meeting to a predetermined date, time and place whenever not satisfied that the proceedings of the meeting may proceed with adequate security and confidentiality.
Section 4.9 Section 4.9 Chair, Secretary and Scrutineers
The chair of any meeting of Members shall be the first mentioned of such of the following officers as have been appointed and who is present at the meeting: Chair, Vice-Chair, or the President. If no such officer is present within fifteen minutes from the time fixed for holding the meeting, the persons present and entitled to vote on behalf of Members shall choose one of their number to be chair. If the secretary of the Corporation is absent, the chair shall appoint an individual who is authorized to vote on behalf of a Member to act as secretary of the meeting. If desired, one or more scrutineers, who need not be Members, may be appointed by a resolution or by the chair with the consent of the meeting.
Section 4.10 Section 4.10 Persons Entitled to be Present
The only persons entitled to be present at a meeting of Members shall be those entitled to vote thereat, the Directors and auditor of the Corporation and others who, although not entitled to vote, are entitled or required under any provision of the Act, the Articles or By-laws to be present at the meeting. Any other person may be admitted only on the invitation of the chair of the meeting or with the consent of the meeting.
Section 4.11 Section 4.11 Show of Hands
Subject to the provisions of the Act, any question at a meeting of Members shall be decided by a show of hands or by such other form of consent appropriate to the communication facility used to collect votes, unless a ballot thereon is required or demanded in accordance with
Section 4.12. Subject to the By-laws, upon a show of hands or the provision of another
appropriate form of consent, every person who is present and entitled to vote on behalf of a Member shall have one vote. Whenever a vote by show of hands or otherwise shall have been taken upon a question, unless a ballot thereon is so required or demanded, a declaration by the chair of the meeting that the vote upon the question has been carried or carried by a particular majority or not carried and an entry to that effect in the minutes of the meeting shall be prima facie evidence of the fact without proof of the number or proportion of the votes recorded in favour of or against any resolution or other proceeding in respect of the said question, and the result of the vote so taken shall be the decision of the Members upon the said question.
Section 4.12 Section 4.12 Ballots
On any question proposed for consideration at a meeting of Members, and whether or not a show of hands or another form of consent has been taken thereon, the chair or any person who is present and entitled to vote, whether as proxyholder or representative, on such questions at the meeting may demand a ballot. A ballot so required or demanded shall be taken in such manner as the chair shall direct. A requirement or demand for a ballot may be withdrawn at any time prior

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to the taking of the ballot. If a ballot is taken each person present shall be entitled to that number of votes provided by the By-laws and the result of the ballot so taken shall be the decision of the Members upon the said question.
Section 4.13 Section 4.13 Adjournment
The chair at a meeting of Members may, with the consent of the meeting and subject to such conditions as the meeting may decide, adjourn the meeting from time to time and place to place. If a meeting of Members is adjourned for less than thirty days, it shall not be necessary to give notice of the adjourned meeting, other than by announcement at the earliest meeting that is adjourned.
ARTICLE 5ARTICLE 5
BOARD OF DIRECTORS
Section 5.1 Section 5.1 Number and Qualifications
Subject to the Articles, the Board shall be comprised of 15 Directors. A majority of the Directors shall be residents of Canada. Directors need not be Members.
Section 5.2 Section 5.2 Director Representation
The Board shall be comprised of 15 Directors as follows:
(a) Eight Independent Directors,
(b) Six Non-Independent Directors, and
(c) The President.
Section 5.3
Section 5.3 Recommendation of Director Nominees for Election
(1) Prior to each annual meeting of Members at which Directors are to be elected, the Governance Committee shall review and select for recommendation to the Board as nominees such number of qualified candidates for election as Non-Independent Directors and Independent Directors as are to be elected at the annual meeting. The Governance Committee will evaluate individual candidates based on their ability to contribute a range of knowledge, skills and experience and having regard for the required composition of the Board and the fact that the Board, as a whole, should be representative of the Corporation’s various stakeholders. (2) Subject to the terms of the Recognition Orders, the Board shall nominate for election to the Board at the annual meeting the persons as determined in accordance with this
Section 5.3.

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Section 5.4 Section 5.4 Election and Term
(1) The term of each Independent Director and Non-Independent Director elected at a meeting of Members shall expire at the dissolution or adjournment of the second annual meeting of Members following the annual meeting of Members at which the Director was elected. Notwithstanding the foregoing sentence, the Board of Directors shall be authorized pursuant to Section 5.3(2) to nominate for election by the Members a Director with a term that may expire before the second annual meeting of Members following such election. (2) With the exception of the President, a Director may be elected to serve four consecutive terms in office but shall not be eligible to be elected to serve a fifth consecutive term, which shall include any shorter term as may have been fixed by the Board of Directors in accordance with this By-law, but shall exclude any portion of a term in office in respect of a vacancy filled pursuant to Section 5.6. For purposes of determining the number of consecutive terms in office of an initial Director upon the Amalgamation who was reelected at the first annual meeting of Members, his or her term in office prior to the first annual meeting of Members shall not be included. Those Directors elected at the first annual meeting of Members following the Amalgamation to serve for an initial one year term shall be limited to three additional consecutive terms in office. (3) Notwithstanding Section 5.4(2), a Director who was on the board of directors of either IIROC or the MFDA immediately prior to the Amalgamation shall not be elected to serve on the Board for a term that would result in such Director serving beyond the first annual meeting of Members held after the eight (8) year anniversary of such Director’s election to the board of IIROC or the MFDA, as applicable.
Section 5.5 Section 5.5 Vacancies
The office of Director shall be automatically vacated:
(a) If a resolution to remove the Director has been approved by the Members in accordance with Section 4.7(b); (b) In the case of a Director who is President, if the Director ceases to be President; (c) In the case of an Independent Director, if the Director ceases to be qualified as an Independent Director; (d) If a Director shall have resigned the office by delivering a written resignation to the secretary of the Corporation; (e) If the Director is declared to be incapable by a court in Canada or in any other country; (f) If a majority of the Directors (excluding the Director in question) determine that the Director is no longer a fit and proper person; (g) If the Director becomes bankrupt; or

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(h) If the Director dies.
Section 5.6 Section 5.6 Filling Vacancies
If a vacancy in the Board shall occur for any reason, the vacancy shall be filled (allowing a reasonable period of time for doing so) for the balance of the term or such shorter term as the Board shall determine pursuant to Section 5.4, of the Director that vacated the office by a resolution passed by the Board appointing a Director, provided that:
(a) If the vacancy is caused by the departure of the President, the person to be appointed to the office of the President has been appointed by the Board; (b) If the vacancy is caused by the departure of an Independent Director or a NonIndependent Director, the person to be appointed has been identified and recommended by the Governance Committee and in the case of a vacancy of an Independent Director, the person recommended is qualified as an Independent Director, and (c) If the vacancy is caused by the failure to elect the required number of Directors, the Board may appoint a Director to fill the vacancy on the basis that the vacancy arose by reason of the departure of an Independent Director or Non-Independent Director and the provisions of Section 5.6(b) shall apply.
Section 5.7 Section 5.7 Remuneration of Directors
The Board may determine from time to time such reasonable remuneration, if any, to be paid to the Independent Directors for serving as such and the Board may determine that such remuneration need not be the same for all Directors. Non-Independent Directors shall not receive remuneration for serving as such. Directors may be reimbursed for reasonable expenses incurred by a Director in the performance of the Director’s duties.
Section 5.8 Section 5.8 Release of Claims
When a Director ceases to hold office, the Corporation shall release a resigning or departing Director of all claims with respect to any matter or thing up to and including the resignation or departure in the capacity as a Director, except for any claims (other than to the extent the Director is indemnified by the Corporation pursuant to Section 9.2) which might arise out of the gross negligence or fraud of the resigning or departing Director.
ARTICLE 6ARTICLE 6
POWERS OF DIRECTORS
Section 6.1 Section 6.1 Administer Affairs
The Board shall supervise the management of the affairs of the Corporation. Subject to the By-laws and the Act, the powers of the Board may be exercised by resolution passed at a meeting at which a quorum is present or by resolution in writing signed by all the Directors entitled to vote on that resolution at a meeting of the Board. If there is a vacancy on the Board,

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the remaining Directors may exercise all the powers of the Board so long as a quorum remains in office.
Section 6.2 Section 6.2 Expenditures
The Board shall have power to authorize expenditures on behalf of the Corporation from time to time and may delegate by resolution to an officer or officers of the Corporation the right to employ and pay salaries to employees.
Section 6.3 Section 6.3 Borrowing Power
(1) The Board is hereby authorized, from time to time, without the authorization of the Members:
(a) To borrow money upon the credit of the Corporation; (b) To limit or increase the amount to be borrowed; (c) To issue or cause to be issued, bonds, debentures or other securities of the Corporation and to pledge or sell the same for such sums, upon such terms, covenants and conditions and at such prices as may be deemed expedient by the Board; (d) To secure any such bond, debentures or other securities, or any other present or future borrowing or liability of the Corporation, by mortgage, hypothec, charge or pledge of all or any currently owned or subsequently acquired real and personal, movable and immovable, property of the Corporation, and the undertaking and rights of the Corporation; and (e) Delegate to a committee of the Board, a Director or an officer or officers of the Corporation all or any of the powers conferred on the Board under this subsection to such extent and in such manner as the Board may determine at the time of such delegation. (2) The powers hereby conferred shall be deemed to be in supplement of and not in substitution for any powers to borrow money for the purposes of the Corporation possessed by its Directors or officers independently of this By-law.
Section 6.4 Section 6.4 Conflict of Interest
(1) A Director who is in any way directly or indirectly interested in a material contract or proposed material contract or a material transaction or proposed material transaction with the Corporation shall make the disclosure required by the Act and except as provided by the Act, no such Director shall vote on any resolution to approve any such contract or transaction. In supplement of and not by way of limitation upon any rights conferred upon Directors by the Act, it is declared that, subject to compliance with the Act, no Director shall be disqualified from any such office by, or vacate any such office by reason of, holding any office with the Corporation or with any corporation in which the Corporation

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shall be a shareholder or by reason of being otherwise in any way directly or indirectly interested or contracting with the Corporation as vendor, purchaser or otherwise or being concerned in any contract or arrangement made or proposed to be entered into with the Corporation in which the Director is in any way directly or indirectly interested as vendor, purchaser or otherwise. Subject to compliance with the Act, no contract or arrangement or transaction entered into by or on behalf of the Corporation in which any Director shall be in any way directly or indirectly interested shall be void or voidable and no Director shall be liable to account to the Corporation or any of its Members or creditors for any profit realized by or from any such contract or arrangement or transaction by reason of any fiduciary relationship. Notwithstanding the foregoing prohibitions on voting by a Director, such Director may be present at and counted to determine the presence of a quorum at the relevant meeting of Directors. (2) A Director who is a party to, or who is a director, officer or employee of or has a material interest in any person who is a party to, a regulatory matter or regulatory investigation in which the Corporation is involved shall disclose the nature and extent of his or her interest at the time and in the manner required by subsection 6.4(1) for an interest in a contract or transaction. Such Director shall not vote on any such matter or investigation, and shall withdraw from the part of any meeting of the Board at which the matter or investigation is discussed or considered, if such matter or investigation is directed specifically at or otherwise directly relates to the Director or a person of which he or she is an employee, officer or director or in which he or she has a material interest.
ARTICLE 7ARTICLE 7
DIRECTORS’ MEETINGS
Section 7.1 Section 7.1 Place of Meeting
Meetings of the Board may be held at any place to be determined by the Board, inside of Canada.
Section 7.2 Section 7.2 Calling of Meetings
Meetings of the Board shall be held from time to time at such time as the Board, the Chair, the President, or any two Directors may determine.
Section 7.3 Section 7.3 Notice of Meetings
Forty-eight hours written notice of any meeting of the Board shall be given, other than by mail, to each Director. Notice by mail shall be sent at least fourteen days prior to the meeting. There shall be at least one meeting per calendar quarter of the Board. Any notice shall describe the matters to be addressed at the meeting. A meeting of the Board shall be held immediately following an annual meeting without notice, provided a quorum is present.

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Section 7.4 Section 7.4 Adjourned Meeting
Any meeting of directors may be adjourned from time to time by the chair of the meeting, with the consent of the meeting, to a fixed time and place. Notice of any adjourned meeting of directors is not required to be given if the time and place of the adjourned meeting is announced at the original meeting. Any adjourned meeting shall be duly constituted if held in accordance with the terms of the adjournment and a quorum is present thereat. The directors who formed a quorum at the original meeting are not required to form the quorum at the adjourned meeting. If there is no quorum present at the adjourned meeting, the original meeting shall be deemed to have terminated forthwith after its adjournment. Any business may be brought before or dealt with at any adjourned meeting which might have been brought before or dealt with at the original meeting in accordance with the notice calling the same.
Section 7.5 Section 7.5 Regular Meetings
The Board may appoint a day or days in any month or months for regular meetings of the Board at a place and hour to be named. A copy of any resolution of the Board fixing the place and time of such regular meetings shall be sent to each Director forthwith after being passed, but no other notice shall be required for any such regular meeting except where the Act requires the purpose thereof or the business to be transacted thereat to be specified and except where nonroutine business is to be discussed.
Section 7.6 Section 7.6 Chair of Meetings of the Board
The chair of any meeting of the Board shall be the Chair, and if the Chair is not present at the meeting, the Vice-Chair. If the Chair and the Vice-Chair are not present, the Directors present shall choose one of their number to be chair.
Section 7.7 Section 7.7 Voting Rights
Each Director is authorized to exercise one vote at all meetings of the Board, and except as required by the Act, every question shall be decided by a majority of the votes cast on the question and, in case of an equality of votes, the chair of the meeting shall not be entitled to a second or casting vote.
Section 7.8 Section 7.8 Participation in Meetings by Telephonic or Electronic Means
(1) A Director may participate in a meeting of the Board or of a committee of the Board by means of a telephonic, electronic, or other communication facility that permits all persons participating in the meeting to communicate adequately with each other, provided that each Director has consented in advance to meeting by such means, and a Director participating in such a meeting by such means is deemed to be present at the meeting. (2) At the outset of each meeting referred to in the foregoing subsection and whenever votes are required, the chair of the meeting shall establish the existence of a quorum and, unless a majority of the Directors present at such meeting otherwise require, adjourn the meeting to a predetermined date, time and place whenever not satisfied that the proceedings of the meeting may proceed with adequate security and confidentiality.

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Section 7.9 Section 7.9 Quorum
A majority of the Directors in office, including a majority of the Independent Directors in office from time to time, shall constitute a quorum for meetings of the Board. Any meeting of the Board at which a quorum is present shall be competent to exercise all or any of the authorities, powers and discretions by or under the By-laws.
Section 7.10 Section 7.10 Minutes of Meetings
The minutes of the Board shall not be available to the Members but shall be available to the Directors, each of whom shall receive a copy of such minutes.
ARTICLE 8ARTICLE 8
OFFICERS
Section 8.1 Section 8.1 Appointment
The Board may annually or more often as may be required, appoint a Chair, a Vice-Chair, a President, one or more vice-presidents, a secretary and any such other officers as the Board may determine, including one or more assistants to any of the officers so appointed. The Board may specify the duties of and, in accordance with this By-law and subject to the provisions of the Act, delegate to such officers powers to manage the affairs of the Corporation. Except as otherwise provided in this By-law, officers need not be Directors, nor Members.
Section 8.2 Section 8.2 Chair and Vice-Chair of the Board
The Board shall from time to time appoint a Chair of the Board who shall be an Independent Director and may appoint one or more Vice-Chairs of the Board who shall be Directors and may not be President. If appointed, the Board may assign to them any of the powers and duties that are by any provisions of a By•-law assigned to the President, and they shall, subject to the provisions of the Act, have such other powers and duties as the Board may specify. During the absence or disability of the Chair, the Vice-Chair shall perform the duties and exercise the powers of Chair.
Section 8.3 Section 8.3 President and Chief Executive Officer
The Board shall appoint a President, who shall also be appointed as the chief executive officer. The President shall have such powers and duties as the Board may specify.
Section 8.4 Section 8.4 Vice-President
A vice-president shall have such powers and duties as the Board or the President may specify.
Section 8.5 Section 8.5 Secretary
The secretary shall attend and be the secretary of all meetings of the Board (or arrange for another individual to so act), Members and committees of the Board and shall enter or cause to

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be entered in records kept for that purpose minutes of all proceedings thereat; the secretary shall give or cause to be given, as and when instructed, all notices to Members, Directors, officers, auditors and members of committees of the Board; the secretary shall be the custodian of the stamp or mechanical device generally used for affixing the corporate seal of the Corporation and of all books, papers, records, documents, and instruments belonging to the Corporation, except when some other officer or agent has been appointed for that purpose; and the secretary shall have such other powers and duties as the Board or the President may specify.
Section 8.6 Section 8.6 Powers and Duties of Other Officers
The powers and duties of all other officers shall be such as the terms of their engagement call for or as the Board or the President may specify. Any of the powers and duties of an officer to whom an assistant has been appointed may be exercised and performed by such assistant, unless the Board or the President otherwise directs.
Section 8.7 Section 8.7 Variation of Powers and Duties
The Board may from time to time and subject to the provisions of the Act, vary, add to or limit the powers and duties of any officer.
Section 8.8 Section 8.8 Term of Office
The Board, in its discretion, may remove any officer of the Corporation, without prejudice to such officer’s rights under any employment contract. Otherwise, each officer appointed by the Board shall hold office until his or her successor is appointed, or until his or her earlier resignation.
Section 8.9 Section 8.9 Terms of Employment and Remuneration
The terms of employment and the remuneration of an officer appointed by the Board shall be settled by the Board from time to time or by a committee of the Board appointed for that purpose.
Section 8.10 Section 8.10 Conflict of Interest
Section 6.4 of this By-Law shall apply to an officer (i) with any interest in any material
contract or proposed material contract or material transaction or proposed material transaction with the Corporation, or (ii) who is a party to, or who is a director, officer or employee of or has a material interest in any person who is a party to a regulatory matter or regulatory investigation in which the Corporation is involved, as if the officer were a Director.
Section 8.11 Section 8.11 Agents and Attorneys
The Corporation, by or under the authority of the Board, shall have power from time to time to appoint agents or attorneys for the Corporation in or outside Canada with such powers of management, administration or otherwise (including the power to sub-delegate) as may be thought fit, subject to the provisions of the Act.

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ARTICLE 9
ARTICLE 9
PROTECTION OF DIRECTORS AND OTHERS
Section 9.1 Section 9.1 Limitation of Liability
No Protected Party shall be liable for the acts, neglect or defaults of any other Protected Party, or for any other loss, damage or misfortune whatsoever which shall happen in the execution of the duties of his or her office or position or in relation thereto unless the same are occasioned by his or her own wilful neglect or default.
Section 9.2
Section 9.2 Indemnities to Directors and Others
(1) Each Indemnified Party shall, from time to time and at all times, be indemnified and saved harmless out of the funds of the Corporation, from and against:
(a) all costs, charges, fines, damages and penalties and expenses whatsoever that such Indemnified Party reasonably incurs, including an amount paid to settle an action or satisfy a judgment, in respect of any civil, criminal, administrative, investigative, or other proceeding which is threatened, brought, commenced or prosecuted against him or her, or in respect of any act, deed, matter or thing whatsoever, made, done or permitted by him or her, in or about the execution of the duties of his or her office or position or in respect of any such liability including those duties executed, whether in an official capacity or not, for or on behalf of or in relation to any body corporate or entity which he or she serves or served at the request of or on behalf of the Corporation or other entity; and (b) all other costs, charges and expenses which he or she sustains or incurs in or about or in relation to the affairs thereof, including an amount representing the value of time any such Indemnified Party spent in relation thereto and any income or other taxes or assessments incurred in respect of the indemnification provided for in this By-law, until it is conclusively determined that such Indemnified Party shall no longer be entitled to such indemnification, provided that the Indemnified Party:
(c) acted honestly and in good faith with a view to the best interests of the Corporation or, as the case may be, to the best interests of the other entity for which the Indemnified Party acted as director or officer or in a similar capacity at the Corporation’s request; and (d) in the case of a criminal or administrative proceeding that is enforced by a monetary penalty, had reasonable grounds for believing that his/her conduct was lawful.

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(2) The Corporation shall also indemnify such persons in such other circumstances as the Act permits or requires. Nothing in this By-law shall limit the right of any person entitled to indemnity apart from the provisions of this By-law.
Section 9.3 Section 9.3 Insurance
The Corporation shall purchase and maintain insurance for the benefit of any Indemnified Party against such liabilities and in such amounts as the Board may from time to time determine and are permitted by the Act.
ARTICLE 10ARTICLE 10
REGIONAL COUNCILS
Section 10.1 Section 10.1 Designation of Regions
Subject to the terms of the Recognition Orders, the Board may establish a National Council, and the Board may designate any geographic area in Canada as a Region of the Corporation. Subject to the terms of the Recognition Orders, the Board may change or terminate any such designation. The original geographic areas of Canada have been designated as Regions of the Corporation as follows:
(a) Atlantic Region, composed of the Provinces of New Brunswick, Nova Scotia, Prince Edward Island and Newfoundland and Labrador; (b) Quebec Region; (c) Ontario Region; (d) Manitoba Region, composed of the Province of Manitoba and the Territory of Nunavut; (e) Saskatchewan Region; (f) Alberta Region, composed of the Province of Alberta and the Northwest Territories; and (g) Pacific Region, composed of the Province of British Columbia and the Yukon Territory.
Section 10.2 Section 10.2 Composition of Regional Councils
(1) There shall be a Regional Council in each Region. Each Regional Council shall be composed of four to twenty members, as determined from time to time by the Regional Council, including a chair and vice-chair to be elected at the annual meeting of Dealer Members of the Region. (2) In addition to the members of the Regional Council elected at the annual meeting of Dealer Members of the Region, the Board may appoint one or more ex-officio members of a Regional Council.

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Section 10.3 Section 10.3 Duties and Powers
Each Regional Council shall have an advisory role with respect to regional issues, and provide regional perspectives on national issues.
Section 10.4 Section 10.4 Meetings of Regional Members
The Dealer Members of each Region shall meet at least annually for the purpose of electing members of the Regional Council. A meeting of the Dealer Members of any Region may be called by the Regional Council or by the Board and shall be held and conducted in accordance with the By-laws and Rules, and the procedures established by the Board from time to time. Notice of the time and place of any such meeting shall be given to the Dealer Members of the Region. Two Members of the Region entitled to vote, present personally or by a partner, director or officer shall be a quorum for any meeting of the Dealer Members of the Region. Unless otherwise determined by the Board, voting at any meeting of the Dealer Members of a Region may be carried out in the same manner as provided for voting at meetings of the Corporation. Instruments of proxy for such purpose shall be lodged with the Chair of the Regional Council not later than 10:00 a.m. of the day of the meeting or of any adjournment thereof.
ARTICLE 11
DISTRICT HEARING COMMITTEES
Section 10.5 Section 11.1 Designation of Districts
Subject to the terms of the Recognition Orders, the Board may from time to time designate any geographic area in Canada as a District of the Corporation, and may change or terminate any such designation. The original geographic areas of Canada have been designated as Districts of the Corporation as follows:
(a) Newfoundland and Labrador District;
(b) Prince Edward Island District;
(c) Nova Scotia District;
(d) New Brunswick District;
(e) Québec District;
(f) Ontario District;
(g) Manitoba District, composed of the Province of Manitoba and the Territory of Nunavut; (h) Saskatchewan District; (i) Alberta District, composed of the Province of Alberta and the Northwest Territories; and

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(j) Pacific District, composed of the Province of British Columbia and the Yukon Territory.
Section 10.6 Section 11.2 District Hearing Committees
There shall be a hearing committee in each District. Each District Hearing Committee shall have the duties, shall operate in accordance with the procedures and shall exercise its powers as set out in the Rules, including its powers with respect to the conduct of hearings. The appointment of the District Hearing Committees shall be made in accordance with the Rules.
ARTICLE 11ARTICLE 12
COMMITTEES AND ADVISORY BODIES
Section 11.1 Section 12.1 Committees of the Board
The Board may from time to time in its discretion appoint from their number one or more committees of the Board with such powers as the Board may determine including, without limitation, the authority to exercise any of the powers of the Board and to act in all matters for and in the name of the Board under the By-laws and Rules, except in each case where By-laws or Rules specifically require an action by, or approval of, the Board. The members of any committee established by the Board shall be appointed annually at the first meeting of Directors following the annual meeting of Members at which Directors have been elected. Unless otherwise provided in this By-law, any Director shall be entitled to be appointed to any committee and a majority of the members of a committee present in person or by telephone shall constitute a quorum, provided that if Independent Directors must be members of the committee, the quorum must also include a majority of the Independent Directors who are members of the committee.
Section 11.2 Section 12.2 Governance Committee
The Board shall establish a Governance Committee composed of at least five Directors, and may include the Chair. All of the members shall be Independent Directors. The chair of the Governance Committee shall be elected by the Board. The Governance Committee shall perform such duties as the Board may delegate or direct from time to time.
Section 11.3 Section 12.3 Finance, Audit and Risk Committee
The Board shall establish a Finance, Audit and Risk Committee composed of at least five Directors of whom a majority shall be Independent Directors. The chair of the Finance, Audit and Risk Committee shall be an Independent Director elected by the Board. The Finance, Audit and Risk Committee shall review and report to the Board on the annual financial statements of the Corporation and shall perform such other duties as the Board may delegate or direct from time to time.
Section 11.4 Section 12.4 Human Resources and Pension Committee
The Board shall establish a Human Resources and Pension Committee composed of at least five Directors of whom a majority shall be Independent Directors. The chair of the Human

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Resources and Pension Committee shall be an Independent Director elected by the Board. The Human Resources and Pension Committee shall perform such duties as the Board may delegate or direct from time to time.
Section 11.5 Section 12.5 Appointments Committee
The Board shall establish an Appointments Committee which will be responsible for appointing members to the District Hearing Committees and such Appointments Committee shall be composed of at least seven Directors (provided the Appointments Committee shall always be comprised of an uneven number of members), including the President, of whom a majority shall be Independent Directors. The chair of the Appointments Committee shall be an Independent Director elected by the Board. The Appointments Committee shall perform such other duties as the Board may delegate or direct from time to time.
Section 11.6 Section 12.6 Committee Meetings
The Board may prescribe requirements and procedures not inconsistent with the Act and the By-laws relating to the calling of meetings of, and conduct or business by, committees of the Board. Subject to the By-laws and Rules and any resolution of the Board, meetings of any such committee shall be held at any time and place to be determined by the chair of the committee or its members provided that at least 48 hours’ prior written notice of such meetings shall be given, other than by mail, to each member of the committee. Notice by mail shall be sent at least 14 days prior to the meeting.
Section 11.7 Section 12.7 Advisory Bodies
The Board may from time to time appoint such advisory bodies as it may deem advisable, and may delegate such power of appointment to any Director, officer, committee or employee of the Corporation. Membership on such advisory bodies shall be determined by the Board from time to time and if the Board so decides, members of such advisory bodies may be persons other than Directors, Members or directors, officers or employees of a Member.
Section 11.8 Section 12.8 Procedure
Unless otherwise determined by the Board, this By-law or the Rules, each committee and advisory body shall have power to regulate its procedure.
ARTICLE 12ARTICLE 13
NOTICES
Section 12.1 Section 13.1 Method of Giving Notices
Any notice (which term includes any communication or document) to be given (which term includes sent, delivered, or served) pursuant to the Act, the regulations thereunder, the Articles, the By-laws or otherwise to a Member, Director, officer, auditor or member of a committee of the Board shall be sufficiently given if delivered personally to the person to whom it is to be given; or if delivered to the person’s recorded address; or if mailed to the person at the person’s recorded address by prepaid ordinary or air mail; or if sent to the person at the person’s

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recorded address by any means of prepaid transmitted or recorded communication (including any form of electronic communication). A notice so delivered shall be deemed to have been given when it is delivered personally or to the recorded address as aforesaid; a notice so mailed shall be deemed to have been given when deposited in a post office or public letter box and deemed to have been received on the fifth day after mailing; and a notice so sent by any means of transmitted or recorded communication shall be deemed to have been given when dispatched or delivered to the appropriate communication company or agency or its representative for dispatch. The secretary may change or cause to be changed the recorded address of any Member, Director, officer, auditor or member of a committee of the Board in accordance with any information believed by the secretary to be reliable. The foregoing shall not be construed so as to limit the manner or effect of giving notice by any other means of communication otherwise permitted by law or as authorized by this By-law.
Section 12.2 Section 13.2 Undelivered Notices
If any notice given to a Member pursuant to Section 13.1 is returned on three consecutive occasions because the Member cannot be found, the Corporation shall not be required to give any further notices to such Member until the Member informs the Corporation in writing of the Member’s new address.
Section 12.3 Section 13.3 Omissions and Errors
The accidental omission to give any notice to any Member, Director, officer, auditor or member of a committee of the Board or the non-receipt of any notice by any such person or any error in any notice not affecting the substance thereof shall not invalidate any action taken at any meeting held pursuant to such notice or otherwise founded thereon.
Section 12.4 Section 13.4 Waiver of Notice
Any Member, proxyholder, representative, other person entitled to attend a Members’ Meeting, Director, officer, auditor or member of a committee of the Board may at any time waive any notice, or waive or abridge the time for any notice, required to be given to such person under any provision of the Act, the regulations thereunder, the Articles, the Bylaws or otherwise and such waiver or abridgement, whether given before or after the meeting or other event of which notice is required to be given, shall cure any default in the giving or in the time of such notice, as the case may be. Any such waiver or abridgement shall be in writing except a waiver of notice of a meeting of the Board or of a committee of the Board which may be given in any manner.
ARTICLE 14

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ARTICLE 13
RULES AND OTHER INSTRUMENTS
Section 13.1 Section 14.1 Power to Make, Amend or Repeal Rules
The Board may make and from time to time amend or repeal such Rules for the objects of the Corporation as a self-regulatory organization and a regulation services provider. All such Rules for the time being in force, unless expressly otherwise provided, shall be binding upon all Regulated Persons. For the purposes of the discipline of Members in accordance with the Rules, such Rules from time to time are incorporated by reference in this By-law. Rules made or amended may be designated with such style, name or title as approved by the Board. Rules shall be effective without Member approval or approval by any other person, except as expressly otherwise provided therein or pursuant to any applicable legislation, the Recognition Orders or the Information Processor Recognition Orders. Rules may represent the imposition of requirements in addition to or higher than those imposed under the applicable securities legislation.
Section 13.2 Section 14.2 Forms and Other Instruments
Where pursuant to any By-Law or Rule, a Form or other instrument may be prescribed or adopted, any such Form or other instrument (including any instructions, directions or notes in such Forms) so prescribed or adopted shall have the same force and effect as the By-Law or Rule pursuant to which it is prescribed or adopted. Any reference in the By-laws or Rules to compliance with the By-laws or Rules shall be deemed to include a reference to any Forms and other instruments.
Section 13.3 Section 14.3 Use of Restricted Fund
Permissible uses for the Restricted Fund will be subject to the terms of Recognition Orders.
Section 13.4 Section 14.4 Investor Protection Fund
The Corporation is authorized to enter into and perform its obligations under such agreements or other arrangements with thean IPF as may be, in the discretion of the Board, consistent with the objects of the Corporation including, without limitation, thean Industry Agreement. The President, his or her staff or any other person designated by the Board shall be authorized to execute and deliver any such agreements, or make any such arrangements, and to do all acts and things as may be necessary to permit the Corporation to exercise its rights or perform its obligations thereunder. In respect of thean Industry Agreement or other agreements and arrangements entered into by the Corporation from time to time, each Dealer Member:
(a) shall promptly pay to the IPF all regular and special assessments levied or prescribed by the IPF in respect of such Dealer Member;

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(b) shall provide to the IPF such information as is contemplated to be provided by a Dealer Member in connection with the assessment of the financial condition of Dealer Members or risk of loss to the IPF; (c) acknowledges and consents to the exchange between the Corporation and the IPF of information relating to Dealer Members, their partners, directors, officers, shareholders, employees and agents, customers or any other persons permitted by law in accordance with any information sharing agreements or arrangements made by them; (d) shall permit the IPF to conduct reviews of such Dealer Member or designated groups of Dealer Members as contemplated by the Industry Agreement or other arrangements and to fully cooperate with the IPF, and its staff and advisers, in connection with such reviews; and (e) shall comply with such actions as the IPF may direct the Corporation to take with respect to a Dealer Member, or with such actions as the IPF may take on behalf of the Corporation as authorized.
Section 13.5 Section 14.5 Notices, Guidelines, Etc.
The Corporation may develop and issue to Regulated Persons such guidelines, notices, interpretations, procedures, practices and other communications relevant to the By•-laws and Rules or the business and activities of a Regulated Person or any other person subject to the jurisdiction of the Corporation to supplement or assist in the interpretation, application of and compliance with the By-laws and Rules.
Section 13.6 Section 14.6 Continuing Jurisdiction and Discipline and Enforcement under
the Rules
(1) Any Regulated Person, in accordance with the provision of any Rule, shall remain subject to the jurisdiction of the Corporation in respect of any action or matter that occurred while that person was subject to the By-laws and Rules, including for certainty any predecessor by-laws or rules of IIROC or the MFDA in effect at the time of such action or matter, for such period of time and under such additional conditions as may be provided in the Rules. (2) The Rules shall provide the practice and procedure to be followed by the Corporation in connection with the commencement and conduct of a disciplinary hearing and shall establish the penalties or remedies that may be imposed by the Corporation on a Regulated Person for failure to comply with any Rules.
Section 13.7 Section 14.7 Exchange of Information, Agreements
(1) To assist the Recognizing Regulators in carrying out their regulatory mandates, the Corporation must proactively and transparently share information or data and cooperate with the Recognizing Regulators.

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(2) To assist other regulatory authorities in carrying out their regulatory mandates, the Corporation will cooperate and may, as appropriate, proactively and transparently share information or data and cooperate with, whether domestic or foreign, exchanges, self-regulatory organizations, clearing agencies, financial intelligence or law enforcement agencies or authorities, banking, financial services or other financial regulatory authorities and investor protection or compensation funds. (3) (1)The Corporation may provide assistance, includingcooperation contemplated by paragraphs (1) and (2) above includes the collection and sharing of information (including information obtained by the Corporation pursuant to the By-Laws or Rules or otherwise in its possession)or data and other forms of assistance for the purpose of registration, market surveillance, investigations, enforcement litigation, investor protection and compensation and for any other regulatory purpose to any exchange, self-regulatory organization, securities regulator, financial intelligence or law enforcement agency or authority, or investor protection or compensation fund, whether domestic or foreignand is subject to applicable laws related to information sharing and protection of personal information. (4) (2)The Corporation may enter into an agreement with any entity described in Section 14.7paragraphs (1) and (12) above to collect and exchange information (including information obtained by the Corporation pursuant to the By-Laws or Rules or otherwise in its possession) and to provide for any other forms of mutual assistance for the purpose of registration, market surveillance, investigation, enforcement litigation, investor protection and compensation and for any other regulatory purpose. (5) ARTICLE 15 The sharing of information and data by the Corporation pursuant to this
Section 14.7 is subject to applicable laws and the terms of the Recognition Orders.
ARTICLE 14
NO ACTIONS
Section 14.1 Section 15.1 No Actions Against the Corporation
No Regulated Person (including in all cases a Member whose rights and privileges have been suspended or terminated and a Member who has been expelled from the Corporation or whose membership has been forfeited) shall be entitled, subject to the rights of appeal granted under the By-laws, Rules or applicable securities legislation, and further subject to any specific contractual rights that a Regulated Person may have in respect of a contract or other agreement to which the Corporation is a party, to commence or carry on any action or other proceedings against the Corporation or against the Board, or any Indemnified Party, against thean IPF, its Boardboard of directors, or any of its committees or its officers, employees and agents of the foregoing, in respect of any penalty imposed or any act or omission done or omitted under the provisions of and in compliance with or intended compliance with the provisions of the Articles, By-laws or Rules and, in the case of thean IPF, done or omitted under the provisions of and in compliance with or intended compliance with the provisions of its letters patent or articles, by-laws and policies, and in any case under any legislation or regulatory directives or agreements thereunder.

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Section 14.2 Section 15.2 No Liabilities Arising in Respect of Entities in which
Corporation Holds an Interest
The Corporation shall not be liable to a Regulated Person (including in all cases a Member whose rights and privileges have been suspended or terminated and a member who has been expelled from the Corporation or whose membership has been forfeited) for any loss, damage, costs, expense, or other liability arising from any act or omission of any corporation or other entity in which the Corporation holds an equity or participating interest, including without limitation FundSERV Inc.
ARTICLE 16
ARTICLE 15
USE OF NAME OR LOGO: LIABILITIES: CLAIMS
Section 15.1 Section 16.1 Use of Name
No Member shall use the name or logo of the Corporation or its predecessors, including IIROC or the MFDA, on letterheads or in any circulars or other advertising or publicity matter, except to the extent and in such form as may be authorized by the Board. The Board may at its sole discretion require a Member to cease using the name or logo of the Corporation. Any use by a Member of the name or logo of the Corporation shall not have the effect of granting to the Member any proprietary interest in the Corporation’s name or logo.
Section 15.2 Section 16.2 Liabilities
No liability shall be incurred in the name of the Corporation by any Member, officer or committee without the authority of the Board.
Section 15.3 Section 16.3 Claims
Whenever the membership of a Member ceases for any reason whatsoever, neither the former Member nor its heirs, executors, administrators, successors, assigns or other legal representatives, shall have any interest in or claim on or against the funds and property of the Corporation.
ARTICLE 17
ARTICLE 16
TRANSITION PERIODS FOR BY-LAWS AND RULES
Section 16.1 Section 17.1 Transition Periods for By-laws and Rules
The Board may suspend or modify the application of any By-law or Rule, or provision thereof, for such period of time as it may determine in its sole discretion in order to facilitate the orderly application of and compliance with such By-law or Rule to or by all or any number or

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class of Regulated Persons. Any suspension or modification may be made either before or after the relevant By-law or Rule has become effective, and notice of the suspension or modification shall be given promptly to all Regulated Persons and to the securities regulatory authority in any jurisdiction where such By-law or Rule would otherwise be in effect. No suspension or modification shall unreasonably discriminate between Members or other persons subject to the jurisdiction of the Corporation and no such modification shall impose on all or any of the Members or other persons subject to the jurisdiction of the Corporation a requirement that is more onerous or strict than the requirements of the By-law or Rule that is subject to the modification.
ARTICLE 18
ARTICLE 17
AMENDMENT, REPEAL, ENACTMENT OF BY-LAWS
Section 17.1 Section 18.1 By-laws
(1) The Board may, by resolution, make, amend, or repeal any By-laws that regulate the activities or affairs of the Corporation and shall submit the By-law, amendment, or repeal to the Members at the next meeting of Members. The Members may, by resolution in accordance with Section 4.7(c), confirm, reject, or amend the By-law, amendment, or repeal. The By-law, amendment, or repeal shall only be effective from the date on which the Members confirm, reject, or amend the By-law, amendment, or repeal. (2) The right of Members to vote to confirm, reject or amend a By-law, or exercise other rights granted to Members under the Act, is subject to the authority, pursuant to applicable securities laws and the Recognition Orders, of the securities commissions and securities regulatory authorities to make any decisions relating to the By-laws of Corporation. In the event of an inconsistency between the By-laws and any direction provided by a securities commission or securities regulatory authority to the Corporation, the direction provided by the securities commission or securities regulatory authority will govern. (3) The By-law shall become effective at the effective time of the Amalgamation and at such time the By-laws of the predecessors of the Corporation shall be repealed. Such repeal shall not affect the previous operation of any By-law or affect the validity of any act done or right or privilege, obligation, or liability acquired or incurred under, or the validity of any contract or agreement made pursuant to any such By-law prior to its repeal. All directors, officers, and person acting under any By-law so repealed shall continue to act as if appointed under the provisions of this By-law and all resolutions of the Members and of the Board with continuing effect passed under any repealed By-law shall continue as good and valid except to the extent inconsistent with this By-law and until amended or repealed.

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ARTICLE 19
PUBLIC
ACCOUNTANT
Section 19.1 Public Accountant
ARTICLE 18AUDITOR
Section 18.1 Auditor
The Members shall, at each annual meeting, appoint a public accountantan auditor to audit the accounts of the Corporation for report to the Members at the next annual meeting. The public accountantauditor shall hold office until the next annual meeting provided that the Directors may fill any casual vacancy in the office of the public accountant. The Corporation’s public accountant may not be a Director, officer or employee of the Corporation or of an affiliated Corporation or associated with that Director, officer or employeeauditor. The remuneration of the public accountantauditor shall be fixed by the Board.
ARTICLE 19ARTICLE 20
BOOKS AND RECORDS
Section 19.1 Section 20.1 Books and Records
The Board shall see that all necessary books and records of the Corporation required by the By-laws of the Corporation or by any applicable statute or law are regularly and properly kept, including maintaining the confidentiality of such books and records when applicable.

New SRO Interim Rules
Investment Dealer and Partially Consolidated Rules The following are the revisions made to the Investment Dealer and Partially Consolidated Rules, primarily to address public comments received on CSA Staff Notice and Request for Comment 25‐305:
Rule 1100, Interpretation
 Subsection 1103(1) ‐ Correction of typographical error  Subsection 1104(1) ‐ Correction of typographical error  Subsections 1105(1) through 1105(5) ‐ Inclusion of transitional rule provisions within Corporation Investment Dealer and Partially Consolidated Rules Rule 1200, Definitions  Subsection 1201(2), Definition of "carrying broker" – Language revision to incorporate new definition for "Mutual Fund Dealer Member"  Subsection 1201(2), Definition of "Corporation requirements" – Language revision to incorporate new definition for "Mutual Fund Dealer Member"  Subsection 1201(2), Definition of "Dealer Member" – Language revision to incorporate new definition for "Mutual Fund Dealer Member"  Subsection 1201(2), Definition of "introducing broker" ‐ Language revision to incorporate new definition for "Mutual Fund Dealer Member"  Subsection 1201(2), Definition of "Mutual Fund Dealer Member" ‐ Inclusion of new definition for "Mutual Fund Dealer Member" to be used in the application of the Investment Dealer and Partially Consolidated Rules  Subsection 1201(2), Definition of "Regulated Persons" ‐ Language revision to incorporate new definition for "Mutual Fund Dealer Member" Rule 2200, Dealer Member Organization  Rule 2200 – Language revisions have been made to the following subsections to include the option that the existing membership disclosure requirements may remain unchanged for a period after New SRO and New IPF commence operations:
o Subsection 2216(9) o Subsection 2284(1) o Subsection 2285(1) Rule 2300, Principal and Agent Relationships  Subsection 2303(4) ‐ Minor language revision  Clause 2304(7)(viii) ‐ Adoption of revisions announced in IIROC Rules Notice 22‐0061 Rule 2400, Acceptable Back Office Arrangements  Subsection 2401(2) ‐ Conforming revisions to introduction section to reflect changes in scope of Parts A and B

 Rule 2400, Part A ‐ Revisions to the following subsections have been made to limit scope of Part A to arrangements between two investment dealers:
o Subsection 2403(1) o Subsection 2404(1) o Subsection 2405(1) o Subsection 2406(1) o Subsection 2407(1) o Subsection 2410(1) o Subsection 2410(14) o Subsection 2415(1) o Subsection 2415(14) o Subsection 2420(1) o Subsection 2420(14) o Subsection 2425(1) o Subsection 2425(14)  Rule 2400, Part B - Revisions to the following subsections have been made to limit scope of arrangements between investment dealers and mutual fund dealers and to adopt more principlesbased rule requirements for such arrangements:
o Subsection 2430(1) o Subsection 2431(1)
 Subsection 2435(1) - Revisions to have been made to refer to arrangements between two investment dealers  Subsection 2480(1) - Conforming revisions have been made to reflect revisions in the scope of Parts A and B Rule 2500, Dealer Member Directors and Executives, and Approval of Individuals  Clause 2551(1)(iii) - Language has been included in this clause that indicates that approval of an individual employed by a dual-registered firm as a Registered Representative mutual funds only is automatic once their registration is approved  Subsection 2551(8) - Inclusion of exception that permits a mutual funds only licensed individual acting as agent on behalf of a dual-registered firm to direct commission under certain circumstances  Subsections 2554(1) and 2554(2) - Adoption of revisions announced in IIROC Rules Notice 22-0061 Rule 2600, Proficiency Requirements and Exemptions from Proficiencies  Clause 2602(3)(vii) - Removal of Conduct and Practices Handbook Course requirement for mutual funds only licensed individuals employed by a dual-registered firm  Clause 2602(3)(x) - Correction of incorrect cross reference  Clause 2602(3)(xi) - Correction of incorrect cross reference  Subsection 2603(1) - Correction of course references  Subsection 2603(2) - Correction of course references  Subsection 2603(3) and 2603(4) - Inclusion of proficiency requirements to trade in alternative mutual funds

 Subsection 2631(1) - Revision of the proficiency transitional provisions to reflect removal of Conduct and Practices Handbook Course requirement for mutual funds only licensed individuals employed by a dual-registered firm Rule 2800, The National Registration Database  Subsection 2801(1) - Adoption of revisions announced in IIROC Rules Notice 22-0061  Subsection 2803(2) - Adoption of revisions announced in IIROC Rules Notice 22-0061  Subsection 2804(2) - Correction of name of rules cross referenced within the mandatory submission text  Subsections 2807(1) through 2807(4) - Adoption of revisions announced in IIROC Rules Notice 22- 0061  Subsection 2808(1) - Adoption of revisions announced in IIROC Rules Notice 22-0061 Rule 3100, Dealings with Clients  Subsection 3115(2) - Adoption of revisions announced in IIROC Rules Notice 22-0061 Rule 3200, Know‐Your‐Client and Client Accounts  Subsection 3212(4) - Inclusion of provision to permit use of affiliate firm client account documents for transferred in accounts under certain conditions Rule 3600, Communications with the Public  Subsection 3623(1) - Adoption of revisions announced in IIROC Rules Notice 22-0061 Rule 4200, General Dealer Member Financial Standards – Disclosure, Internal Controls, Calculations of Pries and Professional Opinions  Clause 4275(1)(viii) - Minor language revision Rule 4900, Other Internal Control Requirements – Derivatives Risk Management  Subsection 4912(4) - Correction of typographical error Rule 5400, Margin Requirements for Other Investment Products  Subsection 5430(1) - Adoption of revisions announced in IIROC Rules Notice 22-0101 Rule 7100, Debt Markets  Subsection 7104(1) - Correction of typographical error Rule 7200, Transaction Reporting for Debt Securities  Subsection 7202(1), Definition of "riskless principal trade" - Correction of typographical error

Corporation Investment Dealer and Partially Consolidated Rules Series 1000 | Interpretation and Principles Rules Rule 1100 RULE 1100 | INTERPRETATION
1101. Introduction
(1) Rule 1100 sets out general rules of interpretation that apply to the Corporation requirements, and certain specific interpretative provisions.
1102. General interpretation
(1) If the context requires, words in the singular may include the plural and words in the plural may include the singular. (2) All times referred to in the Corporation requirements are Eastern Standard Time, or Eastern Daylight Savings Time when in effect, unless stated otherwise. (3) References to:
(i) a Dealer Member include its Approved Persons and employees, if the context is appropriate, (ii) a Dealer Member’s board of directors include a Dealer Member’s equivalent governance body for a Dealer Member that is not a corporation, (iii) a corporation, as a type of entity to which the Corporation requirements apply, includes unincorporated entities if the context is appropriate, and (iv) provinces include all provinces and territories of Canada. (4) In the event of any dispute as to the intent or meaning of any provisions within the Corporation requirements, the interpretation of the Board is final, subject to any appeal procedures that may be available.
1103. Delegation by a Dealer Member
(1) If a Corporation requirement requires an individual at a Dealer Member to perform a function, that individual may delegate the tasks or activities involved in performing the function unless the Corporation requirements specifically prohibit such delegation. (2) An individual who delegates tasks or activities cannot delegate the responsibility for the function.
1104. Electronic signatures
(1) Subject to applicable laws, a Dealer Member may use an electronic or digital signature where a signature is required by Corporation requirements for an agreement, contract or transaction between a Dealer Member and its clients, Approved Persons, the Corporation, other Dealer Members or any other person unless specifically prohibited.
1105. Transitional provision
(1) The Corporation is the corporation continuing from the amalgamation effective January 1, 2023 of the Investment Industry Regulatory Organization of Canada and the Mutual Fund Dealers Association of Canada and as a result, for greater certainty:
(i) any reference in these Rules to the Corporation includes the Investment Industry Regulatory Organization of Canada prior to January 1, 2023, (ii) any person subject to the jurisdiction of the Investment Industry Regulatory Organization of Canada prior to January 1, 2023 remains subject to the jurisdiction of the Corporation in respect of any action or matter that occurred while that person was subject to the

Corporation Investment Dealer and Partially Consolidated Rules Series 1000 | Interpretation and Principles Rules Rule 1100 jurisdiction of the Investment Industry Regulatory Organization of Canada at the time of such action or matter, (iii) any individual that was an Approved Person under the Investment Industry Regulatory Organization of Canada requirements immediately prior to January 1, 2023 continues to be an Approved Person in respect of these Rules if that individual has not ceased to be approved by the Corporation, and (iv) the provisions of the articles, by‐laws, rules, policies and any other instrument or requirement prescribed or adopted by the Investment Industry Regulatory Organization of Canada pursuant to such articles, by‐laws, rules or policies, any approval, ruling or order granted or issued by the Investment Industry Regulatory Organization of Canada, in each case while a person was subject to the jurisdiction of the Investment Industry Regulatory Organization of Canada will continue to be applicable, whether presently effective or effective at a later date, to that person in accordance with their terms and may be enforced by the Corporation. (2) Any exemption from a Rule of the Corporation, including for greater certainty, an exemption granted by the Investment Industry Regulatory Organization of Canada, in effect prior to the coming into effect of these Rules shall remain in effect subsequent to the coming into effect of these Rules:
(i) subject to any condition included in the exemption, and (ii) provided that the applicable prior rule of the Corporation on which the exemption is based, substantially continues in these Rules. (3) The Corporation shall continue the regulation of persons subject to the jurisdiction of the Investment Industry Regulatory Organization of Canada that was formerly conducted by the Investment Industry Regulatory Organization of Canada, including any enforcement or review proceedings, in accordance with the by‐laws, rules and policies of the Investment Industry Regulatory Organization of Canada, and any other instrument or requirement prescribed or adopted by the Investment Industry Regulatory Organization of Canada pursuant to such by‐laws, rules or policies, in each case in effect at the time of any action or matter that occurred while that person was subject to the jurisdiction of the Investment Industry Regulatory Organization of Canada. (4) Each individual who on December 31, 2022 was a member of the Hearing Committee of the Investment Industry Regulatory Organization of Canada shall be automatically deemed to be a member of a District Hearing Committee of the Corporation as of January 1, 2023 and the term of each such individual as a member of a District Hearing Committee of the Corporation shall expire on the date that his or her term as a member of the Hearing Committee of the Investment Industry Regulatory Organization of Canada would have expired or at such other time as the Appointments Committee of the Corporation shall otherwise determine. (5) Any enforcement or review proceedings commenced by the Investment Industry Regulatory Organization of Canada in accordance with its rules prior to January 1, 2023:
(i) in respect of which a hearing panel has been appointed, shall proceed in accordance with the by‐laws, decisions, directions, policies, regulations, rules, rulings and practice and procedure of the Investment Industry Regulatory Organization of Canada in effect and

Corporation Investment Dealer and Partially Consolidated Rules Series 1000 | Interpretation and Principles Rules Rule 1100 applicable to such enforcement or review proceeding at the time it was commenced and shall continue to be heard by the same hearing panel, and (ii) in respect of which a hearing panel has not been appointed, shall proceed in accordance with the by‐laws, decisions, directions, policies, regulations, rules, rulings and practice and procedure of the Investment Industry Regulatory Organization of Canada, in effect and applicable to such enforcement or review proceeding at the time it was commenced, provided that, despite any provision of the by‐laws, decisions, directions, policies, regulations, rules, rulings or practice and procedure of the Investment Industry Regulatory Organization of Canada in effect and applicable to such enforcement or review proceeding, these Rules shall apply to the appointment of the hearing panel.
1106. – 1199. Reserved.

Corporation Investment Dealer and Partially Consolidated Rules Series 1000 | Interpretation and Principles Rules Rule 1200 RULE 1200 | DEFINITIONS
1201. Definitions
(1) Some terms used throughout the Corporation requirements are defined in subsection 1201(2). Additional terms are set out in the Corporation General By‐Law No. 1 and in Form 1. Terms that are used only in a single Rule are defined in that Rule. Any term not defined in subsection 1201(2), in Corporation General By‐Law No. 1, in Form 1 or in a specific Rule, which is defined in securities laws, has the same meaning as provided for in the securities laws. When a prescribed or adopted policy defines a term that the Corporation requirements also defines, the definition contained in the policy prevails to the extent of any inconsistency, when interpreting that policy. (2) The following terms have the meanings set out when used in the Corporation requirements:
“acceptable clearing corporation” The same meaning as set out in Form 1, General Notes and Definitions. “acceptable counterparty” The same meaning as set out in Form 1, General Notes and Definitions. “acceptable exchange” The same meaning as set out in Form 1, General Notes and Definitions “acceptable institutions” The same meaning as set out in Form 1, General Notes and Definitions. “acceptable foreign marketplace” Any entity operating as:
(i) an exchange, or a quotation and trade reporting system, or an alternative trading system for securities or derivatives transactions that is subject to legislation and oversight by a central or regional government authority in the country of operation, or (ii) a quotation and trade reporting system, or an alternative trading system for securities or derivatives transactions that is subject to the rules of a self‐regulatory organization, which is subject to legislation and oversight by a central or regional government authority in the country of operation. The legislation or oversight regime must provide for or recognize the exchange’s, or the quotation and trade reporting system’s, or the alternative trading system’s powers of compliance and enforcement over its members or participants. “acceptable securities locations” The same meaning as set out in Form 1, General Notes and Definitions. “actively engaged in the business of the Dealer Member” Participating in the Dealer Member’s regular business activities, operations or promotion of a Dealer Member’s services. It does not include participating in board or board corporate governance committee meetings or occasional referrals to the Dealer Member that were not solicited on the Dealer Member’s behalf.

Corporation Investment Dealer and Partially Consolidated Rules Series 1000 | Interpretation and Principles Rules Rule 1200 “advertisement” Any commercials, commentaries and any published materials promoting a Dealer Member’s business, including materials disseminated or made available electronically. “advisory account” An account which is subject to a suitability determination where:
(i) the client is responsible for all investment decisions but is able to rely on advice given by a Registered Representative, and (ii) the Dealer Member and the Registered Representative are responsible for all advice given. “advisory capacity” Providing advice to an issuer in return for remuneration other than trading advice or related services. “affiliate” Where used to indicate a relationship between two corporations, means:
(i) one corporation is a subsidiary of the other corporation, (ii) both corporations are subsidiaries of the same corporation, or (iii) both corporations are controlled by the same person. “agent” An individual who is subject to the principal and agent relationship requirements set out in Rule 2300. “applicable laws” All laws, statutes, ordinances, regulations, rules, orders, judgments, decrees or other regulatory directions, applicable to a Regulated Person or its employees, partners, directors or officers, in the conduct of their business. “approved investor” An industry investor (defined in clause 2102(1)) or any other person who requires the approval of the Corporation to invest in a Dealer Member. “Approved Person” An individual approved by the Corporation under these Rules to carry out a function for a Dealer Member, namely, the following individuals:
(i) Associate Portfolio Manager,
(ii) Chief Compliance Officer,
(iii) Chief Financial Officer,
(iv) Director,
(v) Executive,
(vi) Investment Representative,
(vii) Portfolio Manager,
(viii) Registered Representative,
(ix) Supervisor,
(x) Trader, or
(xi) Ultimate Designated Person.
“associate” The same meaning as set out in General By‐law No. 1, section 1.1. “Associate Portfolio Manager” An individual designated by the Dealer Member and approved by the Corporation to provide discretionary portfolio management for managed accounts under the supervision of a Portfolio Manager. “beneficial owner” A person who has beneficial ownership of securities.

Corporation Investment Dealer and Partially Consolidated Rules Series 1000 | Interpretation and Principles Rules Rule 1200 “beneficial ownership” Beneficial ownership of securities includes ownership:
(i) of securities by:
(a) a corporation, or
(b) affiliates of a corporation, that is controlled by a person, or (ii) by a corporation of securities beneficially owned by the affiliates of the corporation. “Board” The same meaning as set out in General By‐law No. 1, section 1.1. “bundled order” Has the same meaning as set out in the Universal Market Integrity Rules. “business day” A day other than Saturday, Sunday and any statutory holiday in the relevant District. “business location” A location where an activity that requires registration or Corporation approval is carried out by or on behalf of a Dealer Member, and includes a residence if regular and ongoing activity that requires registration or approval is carried out from the residence or if records relating to an activity that requires registration or approval are kept at the residence. “carrying broker” A Dealer Member that carries client accounts for another Dealer Member or for a Mutual Fund Dealer Member, which includes the clearing and settlement of trades, the maintenance of records of client transactions and accounts, and the custody of client cash and securities, in accordance with the requirements set out in Rule 2400. “CDS” CDS Clearing and Depository Services Inc. “chartered bank” A bank incorporated under the Bank Act (Canada). “Chief Compliance Officer” An individual approved by the Corporation to act as the chief compliance officer of a Dealer Member. “Chief Financial Officer” An individual approved by the Corporation to act as the chief financial officer of a Dealer Member. “clearing day” Any day CDS or another acceptable clearing corporation is open for business. “control” Where used to indicate control of a corporation, means a person who has beneficial ownership of voting securities in the corporation that carry more than 50% of the votes for election of directors of the corporation and such votes allow the person to elect a majority of the directors; but if a hearing panel orders that a person does or does not control the corporation under the Corporation requirements, that order defines their relationship under the Corporation requirements. “Corporation” The same meaning as set out in General By‐law No. 1, section 1.1. “Corporation Membership Disclosure Policy” The policy setting out the Corporation’s Membership disclosure requirements for Dealer Members, as made available on the Corporation’s website.

Corporation Investment Dealer and Partially Consolidated Rules Series 1000 | Interpretation and Principles Rules Rule 1200 “Corporation requirements” Requirements set out within the Corporation’s articles, by‐laws and rules, along with all other instruments prescribed or adopted within Corporation’s by‐laws and rules, and Corporation rulings, except, for the purposes of these Rules, requirements applicable to Mutual Fund Dealer Members and their Approved Persons and employees are to be excluded. “correspondence” Any advertisement or business related communication, including any written or electronic communication, prepared for distribution to a single current or prospective client, but not for distribution to multiple clients or the general public. “Dealer Member” The same meaning as set out in General By‐law No. 1, section 1.1, except, for the purposes of these Rules, Mutual Fund Dealer Members are to be excluded. “Dealer Member related activities” Acting as a Dealer Member, or carrying on business that is necessary or incidental to being a Dealer Member. The Board may include or exclude any activities from this definition. “Dealer Member’s auditor” An auditor on the Corporation approved list of accounting firms chosen by the Dealer Member to be its auditor. “debt security” Any security that provides the holder with a legal right, in specified circumstances, to demand payment of the amount owing and includes a debtor‐creditor relationship. The term includes securities with short‐term maturities or mandatory tender periods such as commercial paper and floating rate notes as well as traditional notes and bonds. “derivative” A financial instrument whose value is derived from, and reflects changes in, the price of the underlying product. It is designed to facilitate the transfer and isolation of risk and may be used for both risk transference and investment purposes. “designated rating organization” The same meaning as set out in Form 1, General Notes and Definitions. “designated Supervisor” A Supervisor that the Dealer Member makes responsible for a supervisory role defined in the Corporation requirements, including a Supervisor responsible for:
(i) the supervision of futures contracts and futures contract options trading accounts under Part D of Rule 3200, (ii) the supervision of options trading accounts under Part D of Rule 3200, (iii) the supervision of discretionary accounts under Part E of Rule 3200, (iv) the opening of new accounts and the supervision of account activity under Part B of Rule 3900, (v) the supervision of managed accounts under Part G of Rule 3900, (vi) the pre‐approval of advertising, sales literature and correspondence under Part A of Rule 3600, and (vii) the supervision of research reports under Part B of Rule 3600.

Corporation Investment Dealer and Partially Consolidated Rules Series 1000 | Interpretation and Principles Rules Rule 1200 “direct electronic access account” An account which is not subject to suitability determination (other than as required by clauses 3402(3)(i) and 3403(4)(i)) where:
(i) the client has been provided with direct electronic access within the meaning of National Instrument 23‐ 103, (ii) the Dealer Member provides no recommendations to purchase, sell, hold or exchange any security, including any class of security or security of a class of issuer, and (iii) the Dealer Member complies with the Universal Market Integrity Rule requirements applicable to the direct electronic access service offering and the requirements of NI 23‐103. “Director” A member of a Dealer Member’s board of directors or an individual performing similar functions at a Dealer Member that is not a corporation. “discretionary account” An account which is subject to the suitability determination and over which the client has given discretionary authority where:
(i) the Dealer Member has not solicited the discretionary authority, (ii) the discretionary authority is accepted to accommodate a client who is frequently or temporarily unavailable to authorize trades, (iii) the discretionary authority has not been renewed, and (iv) the term of the discretionary authority does not exceed 12 months. “District” The same meaning as set out in General By‐law No. 1, section 1.1. “early warning excess” This is calculated and has the same meaning as set out in Statement C of Form 1. “early warning reserve” This is calculated and has the same meaning as set out in Statement C of Form 1. “equity security” An interest, investment or security in a corporation in respect of which the holder has no legal right to demand payment until the corporation or its board of directors has passed a resolution declaring a dividend or other distribution or a winding up of the corporation. “employee” An employee or agent of a Dealer Member. “Enforcement Staff” Corporation staff who are authorized to conduct enforcement activities on behalf of the Corporation, including conducting investigations and initiating and conducting disciplinary proceedings. “Executive” A Dealer Member’s partner, Director or officer who is involved in the Dealer Member’s senior management, including anyone fulfilling the role of chair or vice‐chair of the board of directors, chief executive officer, president, chief administrative officer, chief operating officer or a person acting in a similar capacity who is head of operations, Chief Financial Officer, Chief Compliance Officer, Ultimate Designated Person, member of an executive management committee or any other position that the Dealer Member designates as an Executive position.

Corporation Investment Dealer and Partially Consolidated Rules Series 1000 | Interpretation and Principles Rules Rule 1200 “free credit balance” Free credit balance means:
(i) for cash and margin accounts, the credit balance less an amount equal to the aggregate of:
(a) the market value of short positions, and (b) margin required on those short positions, and (ii) for futures accounts, the credit balance less an amount equal to the aggregate of:
(a) margin required to carry open futures contracts or futures contract option positions, less (b) any equity in those contracts, plus (c) any deficits in those contracts. However, the aggregate amount must not exceed the dollar amount of the credit balance. “futures contract” A contract to make or take delivery of the underlying interest during a designated future month on terms agreed to when the contract is entered on a futures exchange. “futures contract option” A right to acquire a long or short position in connection with a futures contract on terms agreed to at the time the option is granted and any option that has a futures contract as its underlying interest. “Global Legal Entity Identifier System" Has the same meaning as set out in the Universal Market Integrity Rules. “guarantee” An agreement to be responsible for the liabilities of a person or to provide security for a person; and includes an agreement to:
(i) purchase an investment, property or services, (ii) to supply funds, property or services, or (iii) to make an investment, if the agreement’s main purpose is to allow a person to perform its obligations under a security or investment, or to assure an investor in a security that the person will perform its obligations. “hearing” A hearing in connection with a proceeding, proposed proceeding or other matter under the Corporation requirements, other than a prehearing conference (defined in section 8402). “hearing committee” A hearing committee of a District appointed under Rule 8300. “hearing panel” A panel selected by the National Hearing Officer to conduct a hearing or prehearing conference (defined in section 8402).

Corporation Investment Dealer and Partially Consolidated Rules Series 1000 | Interpretation and Principles Rules Rule 1200 “holding company” Of a corporation means either:
(i) another corporation that owns :
(a) more than 50 per cent of each class or series of the voting securities, and (b) more than 50 per cent of each class or series of the participating securities, either directly in the corporation or in the holding company of that corporation, but does not include:
(ii) an industry investor (defined in clause 2102(1)(i)) that owns the corporation’s securities in the capacity of an industry investor, or (iii) a corporation that the Corporation has ordered is not a holding company of that corporation. “individual” A natural person. “industry member” A current or former director, officer, partner or employee of a Member or Regulated Person, or an individual who is otherwise suitable and qualified for appointment to a hearing committee. “institutional client” (i) An acceptable counterparty, (ii) an acceptable institution, (iii) a regulated entity, (iv) a registrant under securities law, other than an individual registrant, or (v) a non‐individual with total securities under administration or management of more than $10 million. “internal controls” The financial and operational policies and procedures established, maintained and applied by the Dealer Member’s management to provide reasonable assurance of the orderly and efficient conduct of the Dealer Member’s business. “inter‐dealer bond broker” A person that provides information, trading and communications services for domestic debt securities trading among inter‐dealer bond broker clients (defined in section 7302). “introducing broker” A Dealer Member or a Mutual Fund Dealer Member that introduces its client accounts to one or more carrying brokers, in accordance with the requirements set out in Rule 2400. “investigation” The powers of the Corporation to initiate and conduct enforcement investigations as set out in Rule 8100. “Investment Representative” An individual, approved by the Corporation, to trade in, but not advise on, securities, options, futures contracts or futures contract options, on the Dealer Member’s behalf, including where that individual deals only in mutual funds. “IPF” or “Investor Protection Fund” The same meaning as set out for the term IPF in General By‐law No. 1, section 1.1. “IPF Disclosure Policy” The policy setting out the Investor Protection Fund’s membership disclosure requirements, as made available on IPF’s website.

Corporation Investment Dealer and Partially Consolidated Rules Series 1000 | Interpretation and Principles Rules Rule 1200 “Legal Entity Identifier” A unique identification code assigned to a person in accordance with standards set by the Global Legal Entity Identifier System. "Legal Entity Identifier System Regulatory Oversight Committee" Has the same meaning as set out in the Universal Market Integrity Rules. “listed security” Has the same meaning as set out in the Universal Market Integrity Rules. “managed account” An account which is subject to a suitability determination where:
(i) investment decisions are made on a continuing basis by a Portfolio Manager or an Associate Portfolio Manager or a third party hired by the Dealer Member, and (ii) the Dealer Member, or a third party hired by the Dealer Member, and the Portfolio Manager or Associate Portfolio Manager are responsible for all investment decisions made. “manipulative and deceptive activities” Any manipulative or deceptive methods, act or practice in connection with any order or trade on a marketplace, and includes the entry of an order or the execution of a trade that would create or could reasonably be expected to create:
(i) a false or misleading appearance of trading activity in or interest in the purchase or sale of a security, or (ii) an artificial ask price, bid price or sale price for the security or a related security. “Marketplace” The same meaning as set out in General By‐law No. 1, section 1.1. “Marketplace Member” The same meaning as set out in General By‐law No. 1, section 1.1. “market value” The same meaning as set out in Form 1, General Notes and Definitions. “Member” The same meaning as set out in General By‐law No. 1, section 1.1. “Membership” Corporation membership. “Monitor” A person appointed under section 8209 or 8212 to monitor a Regulated Person’s business and affairs and to exercise powers granted by a hearing panel. “multiple client order” Has the same meaning as set out in the Universal Market Integrity Rules. “Mutual Fund Dealer Member” A Member that is registered as a mutual fund dealer in accordance with securities law and is not also registered as an investment dealer. “National Hearing Officer” A person appointed by the Corporation who is responsible for the administration of enforcement and other proceedings under the Corporation requirements and other employees of the Corporation to whom the person delegates the performance of such functions. “non‐client accounts” or “non‐client orders” Accounts or orders in which the Dealer Member or an Approved Person has a direct or indirect interest other than the commission charged.

Corporation Investment Dealer and Partially Consolidated Rules Series 1000 | Interpretation and Principles Rules Rule 1200 “officer” A Dealer Member’s chair or vice‐chair of the board of directors, chief executive officer, president, chief administrative officer, Chief Compliance Officer, Chief Financial Officer, chief operating officer, vice‐president, secretary, any other person designated an officer of a Dealer Member by law or similar authority, or any person acting in a similar capacity on behalf of a Dealer Member. “option” A derivative contract that:
(i) gives the purchaser the right, but not the obligation, to buy or sell an underlying asset at a certain price (exercise price) on or before an agreed upon date, and (ii) imposes on the seller an obligation, if called upon by the purchaser, to buy in the case of puts, or sell in the case of calls, at the exercise price. “order execution only account” An account which is not subject to a suitability determination (other than as required by clauses 3402(3)(i) and 3403(4)(i)) where:
(i) the client is solely responsible for making all investment decisions, and (ii) the Dealer Member provides no recommendation to purchase, sell, hold or exchange any security, including any class of security or security of a class of issuer. “Participant” Has the same meaning as set out in the Universal Market Integrity Rules. “party” A party to a proceeding under the Corporation requirements, including Enforcement Staff and Corporation staff. “person” An individual, a partnership, a corporation, a government or any of its departments or agencies, a trustee, an incorporated or unincorporated organization, an incorporated or unincorporated syndicate or an individual’s heirs, executors, administrators or other legal representatives. “Portfolio Manager” An individual designated by the Dealer Member and approved by the Corporation to provide discretionary portfolio management for managed accounts. “President” The same meaning as set out in General By‐law No. 1, section 1.1. “public member” A public member in relation to a hearing committee means:
(i) a current or retired member of the law society of a province, other than Québec, who is in good standing at the law society, or (ii) in Québec, a current or retired member of the Barreau du Québec, who is in good standing at the Barreau. “recognized foreign self‐ regulatory organization” A foreign self‐regulatory organization which offers reciprocal treatment to Canadian applicants and which has been recognized by the Corporation as such. “records” Books, records, client files and information and other documentation, including electronic documents, related to the Investment Dealer Rule Regulated Person’s business. “Region” The same meaning as set out in General By‐law No. 1, section 1.1. “Regional Council” The same meaning as set out in General By‐law No. 1, section 1.1.

Corporation Investment Dealer and Partially Consolidated Rules Series 1000 | Interpretation and Principles Rules Rule 1200 “Registered Representative” An individual, approved by the Corporation, to trade, or advise on trades, in securities, options, futures contracts, or futures contract options with the public in Canada, on the Dealer Member’s behalf, including where that individual deals only in mutual funds or only with institutional clients. “regulated entity” The same meaning as set out in Form 1, General Notes and Definitions. “Regulated Persons” The same meaning as set out in General By‐law No. 1, section 1.1, except, for the purposes of these Rules, current and former Mutual Fund Dealer Members and their current and former representatives are to be excluded. “related company” A sole proprietorship, partnership or corporation that is a Dealer Member and is related to another Dealer Member because:
(i) it, or its Executives, Directors, officers, shareholders or employees (individually or collectively) have at least a 20% ownership interest in the other Dealer Member, or (ii) the other Dealer Member, or its Executives, Directors, officers, shareholders or employees (individually or collectively) have at least a 20% ownership interest in it, where the ownership interest includes an interest as a partner or shareholder, either directly or indirectly, or an interest through one or more holding companies. But if the Board has ordered that two persons are, or are not, related companies under the Corporation requirements, that order defines their relationship under the Corporation requirements. “remuneration” Any benefit or consideration, including goods and service, monetary or otherwise that could be provided to or received by a person. “repurchase agreement” An agreement to sell and repurchase securities. “research report” Any written or electronic communication for distribution to clients or prospective clients containing an analyst’s recommendation about the purchase, sale or holding of a security, excluding any government debt security or any government guaranteed debt security. “respondent” A person who is the subject of a proceeding or settlement under Corporation requirements. “reverse repurchase agreement” An agreement to purchase and resell securities. “retail client” A client that is not an institutional client. “risk adjusted capital” The capital level maintained by a Dealer Member, calculated in accordance with the Corporation requirements set out in Form 1. “Rules” These Rules made pursuant to General By‐law No.1 and any Forms prescribed thereunder. “Rules of Procedure” The rules of practice and procedure under Rule 8400. “safekeeping” The holding of securities by a Dealer Member for a client in accordance with the requirements set out in Part A of Rule 4400.

Corporation Investment Dealer and Partially Consolidated Rules Series 1000 | Interpretation and Principles Rules Rule 1200 “sales literature” Any written or electronic communication for client use which contains a recommendation relating to a security or trading strategy, but does not include:
(i) any communication that is an advertisement or correspondence, or (ii) preliminary prospectuses and prospectuses. “sanction” A penalty imposed by a hearing panel or a penalty or other measure imposed under a settlement agreement. “securities laws” Any laws about trading, distributing, advising or any other related activities in securities, futures contracts, futures contract options or derivatives in Canada enacted by the government of Canada or any province or territory in Canada and all regulations, rules, orders, judgments and other regulatory directions relating to such laws. “securities regulatory authority” Any commission or person in Canada, or any province or territory in Canada, authorized to administer securities laws and any person approved, recognized or authorized as an SRO by such commission. "securities related business" Any business or activity (whether or not carried on for gain) engaged in, directly or indirectly, which constitutes trading or advising in securities or exchange contracts (including futures contracts and futures contract options) for the purposes of securities laws, including for greater certainty, offers and sales pursuant to exemptions under securities laws. “segregation” A practice whereby a Dealer Member holds in trust client securities that are:
(i) held free and clear of any charge, lien, claim or encumbrance of any kind, (ii) ready for delivery to a client on demand, and (iii) held separate from the Dealer Member’s own security holdings. “settlement agreement” A written agreement between Corporation staff and a respondent to settle a proceeding or proposed proceeding under Rule 8200. “settlement hearing” A hearing relating to a settlement agreement. “shared office premises” Premises a Dealer Member shares with another regulated Canadian financial service entity that is involved in financial activities, such as banking, mutual funds, insurance, deposit taking or mortgage brokerage activities. “significant area of risk” A function, process or an activity within a Dealer Member in which a failure to mitigate or control its risk could lead to material harm to the Dealer Member’s liquidity, solvency, operational capabilities, clients, client assets and other client positions. “SRO” The same meaning as defined in National Instrument 14‐101. “subordinated debt” Debt that does not entitle the holder to be paid in priority to any senior class of debt.

Corporation Investment Dealer and Partially Consolidated Rules Series 1000 | Interpretation and Principles Rules Rule 1200 “subsidiary” Subsidiary of an entity means:
(i) an entity it controls,
(ii) a corporation it controls and one or more corporations controlled by that corporation, or (iii) a corporation controlled by two or more corporations it controls, and includes a corporation that is a subsidiary of another subsidiary of a corporation. “Supervisor” An individual given responsibility and authority by a Dealer Member, and approved by the Corporation, to manage the activities of the Dealer Member or the Dealer Member’s Approved Persons or employees to provide reasonable assurance they comply with the Corporation requirements and securities laws. “temporary hold” means a hold that is placed on the purchase or sale of a security on behalf of a client or on the withdrawal or transfer of cash or securities from a client’s account. “total margin required” The same meaning as set out in Statement B of Form 1. “trade name” A name a Dealer Member or Approved Person uses to conduct business and includes a group name under which a Dealer Member and its affiliates conduct business. “Trader” An individual, approved by the Corporation as a trader, whose activity is restricted to trading through a Marketplace Member’s trading system, and who may not advise the public. “trading strategy” A broad general approach to investments including matters such as the use of specific products, leverage, frequency of trading or a method of selecting particular investments but does not include specific trade or sectoral weighting recommendations. “Ultimate Designated Person” An individual approved by the Corporation to be responsible for the conduct of a designated Dealer Member and the supervision of its employees and to perform the functions for an ultimate designated person described in the Corporation requirements. “written cash and securities loan agreement” A written cash loan agreement or securities loan agreement, other than an overnight cash loan agreement (as defined in section 4602), where the Dealer Member receives or pays cash or, provides or receives securities, that contains the minimum provisions described in Part B of Rule 4600.
1202. – 1299. Reserved.

Corporation Investment Dealer and Partially Consolidated Rules Series 1000 | Interpretation and Principles Rules Rule 1300 RULE 1300 | EXEMPTIVE POWERS OF THE CORPORATION
1301. Introduction
(1) Rule 1300 describes the powers of the Corporation to provide exemptions from Corporation requirements.
1302. Exemptions from the Corporation requirements
(1) Unless otherwise prescribed by the Corporation requirements, the Board may exempt a Dealer Member from any Corporation requirement if satisfied that doing so would not be prejudicial to the interests of the public, Dealer Members or their clients. In granting an exemption, the Board may impose any terms or conditions that it considers necessary.
1303. – 1399. Reserved.

Corporation Investment Dealer and Partially Consolidated Rules Series 1000 | Interpretation and Principles Rules Rule 1400 RULE 1400 | STANDARDS OF CONDUCT
1401. Introduction
Rule 1400 sets out the general standards of conduct that apply to Regulated Persons.
1402. Standards of conduct
(1) A Regulated Person:
(i) in the transaction of business must observe high standards of ethics and conduct and must act openly and fairly and in accordance with just and equitable principles of trade, and (ii) must not engage in any business conduct that is unbecoming or detrimental to the public interest. (2) Without limiting the generality of the foregoing, any business conduct that:
(i) is negligent,
(ii) fails to comply with a legal, regulatory, contractual or other obligation, including the rules, requirements, and policies of a Regulated Person, (iii) displays an unreasonable departure from standards that are expected to be observed by a Regulated Person, or (iv) is likely to diminish investor confidence in the integrity of securities, futures or derivatives markets, may be conduct that contravenes one or more of the standards set forth in subsection 1402(1).
1403. Applicability
(1) For purposes of Corporation requirements:
(i) Dealer Members are responsible for all acts and omissions of their employees, partners, Directors and officers, and (ii) non‐Dealer Member users and subscribers to a Marketplace for which the Corporation is the regulation services provider are responsible for all acts and omissions of their employees, partners, directors, and officers. (2) In addition to complying with all Corporation requirements:
(i) an Approved Person must avoid any act or omission that would cause their Dealer Member to violate any Corporation requirements, and (ii) an employee, partner, director or officer of a non‐Dealer Member user or subscriber of a Marketplace for which the Corporation is the regulation services provider must avoid any act or omission that would cause the user or subscriber to violate any Corporation requirements. (3) For purposes of section 1402, the obligation of Regulated Persons that are non‐Dealer Member users or subscribers of a Marketplace for which the Corporation is the regulation services provider is limited to the obligation to transact business openly and fairly when trading on a Marketplace or otherwise dealing in securities that are eligible to be traded on a Marketplace.

Corporation Investment Dealer and Partially Consolidated Rules Series 1000 | Interpretation and Principles Rules Rule 1400
1404. Policies and procedures
(1) A Dealer Member must establish, maintain and apply written policies and procedures regarding the conduct of its business activities and operations. (2) A Dealer Member must establish, maintain and apply written policies and procedures that establish a system of controls and supervision sufficient to provide reasonable assurance the Dealer Member, its employees and Approved Persons comply with Corporation requirements and securities laws. A Dealer Member may establish more stringent policies and procedures than those needed to comply with such requirements. (3) Guidelines and best practices set out in Corporation guidance are generally intended to present acceptable methods that can be used to comply with specific Corporation requirements. Unless otherwise indicated, Dealer Members may use alternate methods, provided that those methods demonstrably achieve the overall objective of the Corporation requirements. (4) The Corporation may require a Dealer Member to adopt additional or different policies and procedures if the existing policies and procedures are insufficient to comply with Corporation requirements.
1405. Evidence of compliance with the Corporation requirements
(1) A Dealer Member must establish a compliance system for monitoring compliance with Corporation requirements and securities laws. The compliance monitoring systems must specifically address preventing and detecting violations and include procedures for reporting the results of compliance monitoring to management. (2) A Dealer Member must keep all records and evidence of its compliance with Corporation requirements that it produces, including supervisory reviews, reports and queries on compliance. (3) The Corporation may require a Dealer Member to provide it with evidence, satisfactory to the Corporation, of the Dealer Member’s compliance with Corporation requirements.
1406. Compliance with all applicable laws
(1) A Dealer Member must comply with all relevant Corporation requirements, securities laws and applicable laws that are applicable to the Dealer Member’s activities. (2) Where there is an inconsistency between any Corporation requirements, securities laws and applicable laws that apply to the Dealer Member’s activities, compliance with the most stringent of the Corporation requirements, securities laws or applicable laws is required.
1407. Training
(1) A Dealer Member must provide training to its Approved Persons on compliance with Corporation requirements, securities laws, and applicable laws including, without limitation, the obligations relating to conflicts of interest, know‐your‐client, account appropriateness, product due diligence, know‐your‐product, and suitability determination.
1408. – 1499. Reserved.

Corporation Investment Dealer and Partially Consolidated Rules Series 1000 | Interpretation and Principles Rules Rule 1500 RULE 1500 | MANAGING SIGNIFICANT AREAS OF RISK
1501. Introduction
(1) As a key element of the Corporation’s regulatory framework, the Corporation expects that, for every significant area of risk within a Dealer Member, an appropriate Executive be responsible for managing such area of risk.
1502. Responsibility for significant areas of risk
(1) For each significant area of risk within a Dealer Member, the Dealer Member must assign responsibility to an appropriate Executive. For certain significant areas of risk, the Corporation has assigned the responsibility to a specific Executive as set out in the Corporation requirements. (2) The Dealer Member must document and maintain a list of Executives and the significant areas of risk each Executive is responsible for managing. (3) Executives are responsible for the review and approval of any policies and procedures relating to their significant area of risk.
1503. – 1999. Reserved.

Corporation Investment Dealer and Partially Consolidated Rules Series 2000 | Dealer Member Organization and Individual Approval Rules Rule 2100 RULE 2100 | OWNERSHIP OF A DEALER MEMBER’S SECURITIES
2101. Introduction
(1) Rule 2100 covers the issuance of securities by a Dealer Member or its holding company and changes in ownership. (2) A Dealer Member must conduct its business with integrity and must maintain adequate financial resources. The Corporation has a responsibility to ensure that persons who have an interest in a Dealer Member are fit and proper. The Corporation also needs to assess whether the obligations incurred by a Dealer Member under the terms of securities it issues pose a risk to the Dealer Member.
2102. Definitions
(1) The following terms have the meaning set out below when used in sections 2103 through 2117:
“industry investor” Any of the following that hold a beneficial ownership interest in a Dealer Member or its holding company:
(i) a full‐time officer or employee of the Dealer Member, or of a related company or affiliate of the Dealer Member, that conducts Dealer Member related activities. (ii) a spouse of an individual referred to in clause (i) of this definition, (iii) an investment corporation, if:
(a) all of the individuals referred to in clause (i) of this definition collectively hold the majority of each class of voting securities of the investment corporation, or (b) all of the beneficial owners of all other equity securities of the investment corporation are:
(I) individuals referred to in clauses (i) or (ii) of this definition, (II) children of individuals referred to in clauses (i) and (ii) of this definition, or (III) individuals and organizations that separately qualify as industry investors of a Dealer Member or its holding company, (iv) a family trust established and maintained for the benefit of individuals referred to in clauses (i) and (ii) of this definition or their children, if:
(a) all of the individuals referred to in clauses (i) or (ii) this definition collectively have full direction and control of the trust, including its investment portfolio and the exercise of voting and other rights of the trust’s investments, and (b) all of the trust’s beneficiaries are:
(I) individuals referred to in clauses (i) or (ii) of this definition, (II) children of individuals referred to in clauses (i) and (ii) of this definition, or (III) individuals and organizations that separately qualify as industry investors of the Dealer Member or its holding company, (v) a registered retirement savings plan, established under the Income Tax Act (Canada), of an individual referred to in clauses (i) or (ii) of this definition if that individual has control of its investment policy and has the only beneficial ownership interest in the registered savings plan,

Corporation Investment Dealer and Partially Consolidated Rules Series 2000 | Dealer Member Organization and Individual Approval Rules Rule 2100 (vi) the Dealer Member’s pension fund if the investment decisions relating to that pension fund are made by the individuals referred to in clause (i) of this definition, (vii) an estate of an individual referred to in clauses (i) or (ii) of this definition for one year after the death of the individual, or such longer period allowed by the Corporation, or (viii) any individual or organization, for a period of 90 days, or such longer period as the Corporation may permit, after:
(a) the date the individual is no longer an employee of the Dealer Member, its related company or affiliate, in the case of an individual that previously qualified as an industry investor under clause (i) of this definition, or (b) the person through whom the individual or organization previously qualified as an industry investor is no longer an employee of the Dealer Member, its related company or affiliate, in the case of individuals and organizations that previously qualified as an industry investor under clauses (ii) through (v) of this definition. An industry investor must be approved by the board of directors of the Dealer Member or its holding company. The industry investor must also be approved by the Corporation if the industry investor has a significant equity interest in the Dealer Member or its holding company. “qualified independent underwriter” For a distribution of a Dealer Member’s securities or its holding company’s securities, it means another Dealer Member:
(i) which has been in the securities business for no less than the five years immediately preceding the date that the prospectus (or other equivalent document) is filed, (ii) where, as of the distribution date, the majority of its board of directors (if a corporation) or the majority of its general partners (if a partnership), have been in the securities business for no less than the five years immediately preceding the distribution date, (iii) which has underwritten public offerings of securities for no less than the five years immediately preceding the distribution date, and (iv) which is not an associate or affiliate of the issuing entity. “significant equity interest” (i) A holding of 10% or more of the voting securities of a Dealer Member or its holding company, (ii) a holding of 10% or more of the outstanding participating securities of a Dealer Member or its holding company, or (iii) an interest of 10% or more of the total equity of the Dealer Member.
2103. Dealer Members must have Corporation approval to issue subordinated debt
(1) A Dealer Member or its holding company must obtain the Corporation’s approval in writing before issuing a security representing subordinated debt. (2) A Dealer Member or its holding company must obtain the Corporation’s approval in writing before signing an agreement to issue subordinated debt in the future.
2104. Repayments and additional subordinated debt
(1) A Dealer Member must obtain the Corporation’s approval in writing before it can issue any additional securities representing subordinated debt or repay any subordinated debt.

Corporation Investment Dealer and Partially Consolidated Rules Series 2000 | Dealer Member Organization and Individual Approval Rules Rule 2100
2105. Agreements with the Corporation
(1) Where the Corporation is a party to a subordinated debt agreement or other debt agreement with the Dealer Member, the Dealer Member must comply with the agreement in making any repayments of the debt subject to the agreement.
2106. Corporation notification of changes of ownership
(1) A Dealer Member must notify the Corporation in writing and file the form specified by the Corporation at least 20 days before issuing or transferring its securities or its holding company’s securities, including any legal or beneficial ownership interest in either. (2) Subsection 2106(1) does not apply to a class of securities if:
(i) there is public ownership of those securities as a result of a distribution made in compliance with securities laws, and (ii) the purchase or transfer will not result in an acquirer of the securities owning a significant equity interest.
2107. Ownership of another Dealer Member
(1) An industry investor is prohibited from purchasing the securities of a Dealer Member or its holding company, other than in the Dealer Member or holding company in which the industry investor is approved, except if:
(i) there is public ownership of the class of securities as a result of a distribution made in compliance with securities laws and the industry investor will not hold a significant equity interest, (ii) the Dealer Member is a related company or an affiliate of the Dealer Member in which the industry investor was approved to invest, or (iii) the following apply:
(a) the investment does not exceed 10% of any class of the issued equity or voting shares, (b) the industry investor notified the Corporation of the investment, (c) where the industry investor is regulated by another securities regulatory authority, the industry investor has provided the Corporation with evidence that the securities regulatory authority does not object to the relationship, and (d) the Dealer Member that the industry investor was approved to invest in does not object to the investment.
2108. Ownership of a significant equity interest and ownership of assets
(1) For the purpose of section 2108, “all or a substantial part of the assets” of a registered firm includes, among other things, a registered firm’s book of business, business line or division of the firm. (2) A Dealer Member must file the form specified by the Corporation and obtain Corporation approval before allowing a person, alone or together with associates and affiliates, to directly or indirectly, own or hold a beneficial ownership interest in:
(i) a significant equity interest in the Dealer Member, or

Corporation Investment Dealer and Partially Consolidated Rules Series 2000 | Dealer Member Organization and Individual Approval Rules Rule 2100 (ii) special warrants or other securities that are convertible into a significant equity interest in the Dealer Member. (3) The written request for approval under subsection 2108(2) must be delivered to the Corporation at least 30 days before the proposed ownership change and must include all relevant facts regarding the ownership change sufficient to enable the Corporation to determine if the ownership change is:
(i) likely to give rise to a conflict of interest, (ii) likely to hinder the Dealer Member in complying with Corporation requirements or securities laws, (iii) inconsistent with an adequate level of investor protection, or (iv) otherwise prejudicial to the public interest. (4) Subsection 2108(2) does not apply to the legal representatives of a deceased person who had been approved by the Corporation as the owner of a significant equity interest. The legal representatives can continue as a registered holder or to hold a significant equity interest for a period as permitted by the Corporation. (5) A Dealer Member must file a written request for approval from the Corporation at least 30 days before the proposed acquisition if it proposes to acquire all or a substantial part of the assets of a registered firm, or if all or a substantial part of the Dealer Member assets are to be acquired, and must include all relevant facts regarding the proposed acquisition sufficient to enable the Corporation to determine if the acquisition is:
(i) likely to give rise to a conflict of interest, (ii) likely to hinder the Dealer Member in complying with Corporation requirements or securities laws, (iii) inconsistent with an adequate level of investor protection, or (iv) otherwise prejudicial to the public interest. (6) A Dealer Member must not complete a proposed acquisition requiring notice under subsection 2108(5) until the Corporation approves the proposed acquisition. (7) Dealer Members acquiring securities or assets of another registered firm for a client in nominee name do not need to provide notice under Rule 2100.
2109. A Dealer Member’s ownership of another Dealer Member
(1) A Dealer Member or its holding company must obtain approval from the Corporation before purchasing, directly or indirectly, any securities of another Dealer Member or its holding company. However, this does not apply if the ownership is a trading position held in the ordinary course of the securities business.
2110. Public ownership
(1) A Dealer Member must obtain approval from the Corporation before allowing public ownership of the Dealer Member’s securities or of its holding company’s securities. (2) When the Corporation considers an application for approval:

Corporation Investment Dealer and Partially Consolidated Rules Series 2000 | Dealer Member Organization and Individual Approval Rules Rule 2100 (i) the Dealer Member must satisfy the Corporation that it complies with, and will continue to meet, Corporation requirements, (ii) the Corporation may require the Dealer Member to provide a legal opinion and any other information it considers necessary, and (iii) the Corporation may impose conditions on and require undertakings from any person it considers necessary to provide reasonable assurance of continuing compliance with Corporation requirements. (3) Regardless of its own governing corporate statute, a (i) Dealer Member, or (ii) holding company of a Dealer Member, that is a reporting issuer or equivalent in any Canadian jurisdiction must set up and maintain an audit committee as the Canada Business Corporations Act requires. (4) The Corporation may exempt a Dealer Member or its holding company from subsection 2110(3).
2111. Public distribution of a Dealer Member’s securities
(1) A Dealer Member or its holding company making a public distribution of its securities must include in the prospectus, or equivalent document, summaries of at least two separate valuations of its securities, if:
(i) the Dealer Member is underwriting more than 25% of the distribution itself, or (ii) the distribution is offered on an agency or best efforts basis. (2) Qualified independent underwriters or chartered accountants must prepare the valuations and summaries. A qualified independent underwriter participating in the distribution may prepare a valuation. (3) Subsection 2111(1) does not apply if securities with identical attributes have been trading on an exchange in Canada for at least six months before the new distribution begins.
2112. Take‐over bids or amalgamations
(1) A Dealer Member or its holding company must obtain at least two separate valuations of its securities if they are distributed through a transaction such as a take‐over bid or amalgamation resulting in a publicly traded market for the securities. (2) Qualified independent underwriters or chartered accountants must prepare the valuations and summaries. A qualified independent underwriter participating in the distribution may prepare the valuations and summaries. (3) Subsection 2112(1) does not apply if:
(i) securities with identical attributes have been trading on an exchange in Canada for at least six months before the transaction, or (ii) the circumstances of the transaction, such as the terms of the transaction, were arrived at through arm’s length negotiations and the Corporation, determines that valuations are not required.

Corporation Investment Dealer and Partially Consolidated Rules Series 2000 | Dealer Member Organization and Individual Approval Rules Rule 2100
2113. Secondary distribution of securities
(1) The requirements of sections 2111 and 2112 apply, with necessary changes, to a secondary distribution of securities of a Dealer Member or its holding company if the securities are distributed from a control position.
2114. Soliciting trades in a Dealer Member’s securities
(1) A Dealer Member may solicit trades in its own securities or those of its holding company when:
(i) making a distribution of its own securities under a prospectus in compliance with Corporation requirements and securities laws, or (ii) making a private placement of its own securities under securities laws. (2) A Dealer Member must not solicit trades in its own securities or its holding company in the secondary market. (3) A Dealer Member may accept unsolicited orders for its own securities or those of its holding company.
2115. Dealer Member’s securities in client accounts
(1) A Dealer Member may accept its own securities or those of its holding company as security for a margin account subject to Corporation requirements including, but not limited to, Schedule 9 of Form 1. (2) A Dealer Member must not allow a discretionary account to hold the Dealer Member’s securities or those of its holding company.
2116. Research reports
(1) A Dealer Member must not issue research reports or opinion letters on its own securities or those of its holding company.
2117. Corporation approvals
(1) A Dealer Member must apply to Corporation to obtain an approval required under Rule 2100. (2) The applicant must pay the prescribed fee. (3) Within 10 days after any event that gives rise to a change in the information submitted pursuant to an application for approval, including any bankruptcy or criminal proceedings, the applicant and the Dealer Member or holding company involved must inform the Corporation of the change in the applicant’s information. (4) The Corporation may refuse an application for approval or may withdraw any approval it has granted.
2118. ‐ 2199. Reserved.

Corporation Investment Dealer and Partially Consolidated Rules Series 2000 | Dealer Member Organization and Individual Approval Rules Rule 2200 RULE 2200 | DEALER MEMBER ORGANIZATION
2201. Introduction
(1) A Dealer Member must take reasonable care to organize and manage its business responsibly and effectively. A Dealer Member’s business must be organized to enable adequate supervision of all of its activities and cannot be organized to avoid Corporation requirements. (2) Rule 2200 is divided into the following parts:
Part A – Dealer Member Structure
Part A.1 – Business locations
[section 2202]
Part A.2 – Holding companies, related companies and order execution only service
providers
[sections 2205 through 2207]
Part A.3 – Non‐securities business and shared premises
[sections 2215 and 2216]
Part B – Dealer Member Membership Changes
[sections 2220 through 2228]
Part C – Business Change Notification Requirements
[sections 2245 through 2248]
Part D – Branch Offices of Dealer Members
[sections 2265 through 2268]
Part E – Trade Names and Disclosures
[sections 2280 through 2285]
PART A – DEALER MEMBER STRUCTURE
PART A.1 ‐ BUSINESS LOCATIONS
2202. Business locations
(1) Under sub‐clause 2803(2)(i)(g), a Dealer Member must notify the Corporation of the opening or closing of a business location.
2203. – 2204. Reserved.
PART A.2 ‐ HOLDING COMPANIES, RELATED COMPANIES AND ORDER EXECUTION ONLY SERVICE PROVIDERS
2205. Holding companies
(1) A Dealer Member must ensure that all its holding companies carrying on business in Canada are legally bound to comply with Corporation requirements applicable to holding companies. (2) A Dealer Member’s holding company may be another Dealer Member’s holding company if:

Corporation Investment Dealer and Partially Consolidated Rules Series 2000 | Dealer Member Organization and Individual Approval Rules Rule 2200 (i) the holding company owns all of the voting securities and participating securities of an Dealer Member, or (ii) the Dealer Member obtains Corporation approval to become the holding company of a second Dealer Member.
2206. Related companies
(1) A Dealer Member, or an employee, Approved Person, or investor of a Dealer Member, must obtain Corporation approval before it sets up, or acquires any interest in, a related company or associate. (2) A Dealer Member must obtain Corporation approval before creating a wholly owned subsidiary whose principal business is a securities broker, dealer or adviser. (3) A Dealer Member must be responsible for and guarantee its related companies’ obligations to clients, and each of its related companies must be responsible for and guarantee the Dealer Member’s obligations to its clients, as follows:
(i) a Dealer Member that holds an interest in a related company must guarantee an amount equal to 100% of the Dealer Member’s financial statement capital, (ii) a Dealer Member that holds an interest in a related company must have the related company guarantee an amount equal to the Dealer Member’s percentage ownership multiplied by the related company’s financial statement capital, and (iii) where two related companies are related because the same person has an ownership interest of at least 20% in each of them, the related companies must guarantee each other for an amount equal to that person’s ownership percentage multiplied by the company’s financial statement capital. (4) A Dealer Member, and each of the Dealer Member’s related companies that are required to guarantee an amount under subsection 2206(3), must sign the current Corporation guarantee form. (5) The Board may exempt a Dealer Member from subsection 2206(3), or may decide that a guarantee for a greater amount is required.
2207. Approval as an order execution only account services provider
(1) The Corporation may approve a Dealer Member or a business unit of a Dealer Member to be an order execution only account service provider if the Dealer Member’s only business is an order execution only account service provider or it provides that service in a separate business unit. (2) A Dealer Member that is offering order execution only account services must comply with all Corporation requirements other than those for which compliance is specifically exempted. (3) A Dealer Member’s policies and procedures must specifically address the operation of its order execution only account services. (4) If operating as a separate business unit within a Dealer Member, an order execution only account services provider must have separate letterhead, accounts and account documentation, and its Registered Representatives and Investment Representatives may not work for any other business unit within the Dealer Member.

Corporation Investment Dealer and Partially Consolidated Rules Series 2000 | Dealer Member Organization and Individual Approval Rules Rule 2200 (5) A Dealer Member must not compensate employees by giving them trade commissions for transactions executed in order execution only accounts.
2208. – 2214. Reserved.
PART A.3 ‐ NON‐SECURITIES BUSINESS AND SHARED PREMISES
2215. Business other than securities
(1) A Dealer Member must obtain Corporation approval before carrying on any business other than Dealer Member related activities. (2) A Dealer Member or a Dealer Member’s holding company may, without Corporation approval, own an interest in a corporation (other than the Dealer Member) that carries on non‐securities business if:
(i) the Dealer Member is not responsible for any of that corporation’s liabilities, and (ii) the Dealer Member and its holding company give the Corporation notice before acquiring an interest in the non‐securities corporation.
2216. Shared office premises
(1) For the purposes of section 2216, a “financial services entity” means an entity regulated by a securities regulatory authority or by another Canadian financial services regulatory regime such as banking, mutual funds, insurance, deposit‐taking, or mortgage brokerage activities. (2) A Dealer Member may share premises with another financial services entity, whether or not they are related companies or affiliate companies, in accordance with section 2216. This section applies to Dealer Members dealing with retail clients. (3) A Dealer Member must ensure that clients clearly understand which legal entity they are dealing with. (4) A Dealer Member’s policies and procedures must specifically address:
(i) supervision of shared office premises,
(ii) representative compliance with Corporation requirements, and (iii) that clients clearly understand which entity they are dealing with. (5) A Dealer Member must have:
(i) adequate supervisory resources to carry out its supervisory procedures, (ii) a system for communicating Corporation requirements to representatives at the shared office premises, and (iii) a process that provides reasonable assurance representatives understand and comply with Corporation requirements. (6) A Dealer Member’s shared office premises must be laid out and operated in a manner that ensures the control and confidentiality of client information and client records by ensuring that client records and account process areas are effectively controlled and physically secure. (7) A Dealer Member must have appropriate signs and disclosure which differentiates the entities sharing the premises.

Corporation Investment Dealer and Partially Consolidated Rules Series 2000 | Dealer Member Organization and Individual Approval Rules Rule 2200 (8) The legal names under which the Dealer Member and each of the other financial services entities operate must be clearly displayed in a prominent location, such as the office entrance door or reception area. (9) The logo and brochures required to be used by the investor protection fund in which they are a member must be displayed in a manner that makes it clear that the logo and brochures are applicable only to the Dealer Member and not to any other financial services entity. (10) When doing business in shared office premises, a Dealer Member must comply with Part E of Rule
2200.
(11)   A Dealer Member must keep client records separate from the records of another financial services entity as follows:
(i) the financial services entity must not have access to the client’s hard copy records, and (ii) electronic records must have separate passwords or another similar control to ensure the financial services entity has no access to the electronic client records of the Dealer Member. (12)   When a Dealer Member, operating in a shared office premises opens an account, the Dealer Member must obtain the client’s specific acknowledgement of a written disclosure statement:
(i) outlining the relationship between the Dealer Member and the financial services entity sharing the premises, and (ii) stating that the entities are separate. (13) A Dealer Member must keep client information confidential and can only share the information with other financial services entities in the shared office premises if:
(i)   the client has consented to the disclosure of confidential information in compliance with applicable federal, provincial, and territorial privacy legislation and regulations, and (ii) the client has consented to the disclosure of client information through a specific confirmation such as a signature or initials at a designated place. A Dealer Member must not obtain a client’s consent through a negative consent option. (14)   An employee who works for both the Dealer Member and another financial services entity must not disclose client information from one organization to the other unless performing a relevant service that the client has specifically consented to and the client has consented to the disclosure of the client information. (15)   Non‐registered personnel employed by the Dealer Member or representatives of the financial services entity may not provide the following services on behalf of the Dealer Member:
(i) opening accounts,
(ii) distributing or receiving order forms for securities transactions, (iii) assisting clients to complete order forms for securities transactions, (iv) giving recommendations or any advice on any activity, (v) completing know‐your‐client information on an account application, other than biographical information, and (vi) soliciting securities transactions. (16)   Non‐registered personnel employed by the Dealer Member or representatives of the financial services entity may provide the following services on behalf of the Dealer Member:

Corporation Investment Dealer and Partially Consolidated Rules Series 2000 | Dealer Member Organization and Individual Approval Rules Rule 2200 (i) advertising the Dealer Member’s services and products, (ii) delivering or receiving clients’ securities, (iii) arranging client appointments or informing of deficiencies on completed forms, (iv) providing the status, balances, and holdings of client accounts, (v) providing quotes and other market information, (vi) contacting the public, inviting the public to seminars, and forwarding non‐securities information, (vii) distributing account applications, subject to subsection 2216(17), and (viii) receiving completed account applications to forward to the Dealer Member for approval. (17) At the shared office premises, a manager, assistant manager or credit officer of the financial services entity who has a high degree of knowledge about the client’s financial affairs may help the client to complete the account application, if:
(i) no Approved Person is available,
(ii) the client’s Registered Representative, Portfolio Manager or Associate Portfolio Manager complies with Corporation requirements relating to know‐your‐client and suitability determination by reviewing the account application with the client before any trade is conducted or a recommendation is made to a client, and (iii) a Supervisor has approved the account application before any trade is conducted for a client. (18) A mutual fund sales person may only accept orders for accounts at the dealer which they are registered with and may not:
(i) offer, or advise clients on, equities or other transactions for which specific proficiency is required, or (ii) communicate those client orders to a qualified person.
2217. – 2219. Reserved.
PART B ‐ DEALER MEMBER MEMBERSHIP CHANGES
2220. Introduction
(1) Part B of Rule 2200 sets out how the Corporation deals with changes to the Membership of Dealer Members.
2221. Notice of intention to resign
(1) If a Dealer Member intends to resign, it must notify the Corporation in writing of its intention by filing a letter of resignation. The Corporation will issue a Notice advising of the Dealer Member’s intention to resign within one week of receiving a Dealer Member’s intent to resign.
2222. Letter of resignation and supporting documents
(1) A resigning Dealer Member must state its reasons for resigning in its resignation letter and file the following supporting documents with the Corporation:
(i) audited financial statements indicating the Dealer Member has liquid assets sufficient to meet its outstanding liabilities other than subordinated loans, and

Corporation Investment Dealer and Partially Consolidated Rules Series 2000 | Dealer Member Organization and Individual Approval Rules Rule 2200 (ii) a report from the Dealer Member’s auditor indicating that all client accounts and assets have been transferred to another Dealer Member or returned to the clients.
2223. Acquisition and resignation
(1) If all or a substantial part of the business and assets of a resigning Dealer Member is acquired by another Dealer Member, the resigning Dealer Member must provide the Corporation with:
(i) either, an undertaking from the acquiring Dealer Member accepting responsibility for all outstanding liabilities of the resigning Dealer Member, or the documents required under
section 2222, and
(ii) pro forma financial statements of the acquiring Dealer Member showing compliance with Corporation requirements relating to capital requirements.
2224. Amalgamation of Dealer Members
(1) If two or more Dealer Members are amalgamated, the Dealer Members not continuing due to the amalgamation must surrender their membership. The continuing Dealer Member must provide the Corporation with:
(i) an undertaking that it accepts responsibility for all liabilities of the Dealer Members that are amalgamating, and (ii) pro forma financial statements of the continuing Dealer Member showing compliance with Corporation requirements relating to capital requirements.
2225. Amalgamation with a non‐Dealer Member
(1) A Dealer Member may amalgamate with a non‐Dealer Member if the continuing Dealer Member provides the Corporation with:
(i) information, satisfactory to the Corporation, confirming that the continuing Dealer Member will have policies and procedures sufficient to carry on its business and comply with Corporation requirements, and (ii) pro forma financial statements of the continuing Dealer Member showing compliance with Corporation requirements relating to capital requirements.
2226. Effective date of resignation
(1) Resignation of a Dealer Member is effective on the date following the day on which the following conditions have all been satisfied:
(i) the Corporation has received the documents required to support the resignation, (ii) the Corporation has received payment of any amount owed to it, (iii) the Corporation has confirmed that no complaints or disciplinary actions are outstanding that the Corporation, in its sole discretion, determines must be resolved prior to permitting the Dealer Member to resign, and (iv) the Board has approved the Dealer Member’s resignation. (2) Notwithstanding the above, and without limiting the discretion that the Board may have to exempt a Dealer Member from any Corporation requirement, where circumstances warrant, the Board may exercise discretion to postpone the effective date of a Dealer Member’s resignation.

Corporation Investment Dealer and Partially Consolidated Rules Series 2000 | Dealer Member Organization and Individual Approval Rules Rule 2200 (3) The Corporation will issue a notice within one week of the effective date of a Dealer Member’s resignation advising of the effective date of the Dealer Member’s resignation.
2227. Payment of Corporation fees
(1) A resigning, suspended, terminated or surrendering Dealer Member must make full payment of its annual membership fees for the entire fiscal year in which its resignation, suspension, termination or surrender becomes effective, subject to the exception set out in subsection 2227(2). (2) A resigning, suspended or terminated Dealer Member may make payment of its membership fees until the end of the fiscal quarter in which the following conditions have been met:
(i) the Dealer Member has transferred all customer accounts to another Dealer Member, (ii) the Dealer Member has no remaining Approved Persons other than shareholders, the Ultimate Designated Person, the Chief Compliance Officer and the Chief Financial Officer, and (iii) in the case of a resigning Dealer Member, the Dealer Member has provided written notice of its resignation to the Corporation.
2228. Inactive Dealer Members
(1) A Dealer Member may apply to the Board to have its membership status temporarily changed to inactive. Dealer Members must file their applications in writing and must include reasons for the requested change. (2) The Board must impose a time limit and may impose conditions on a Dealer Member’s inactive status. (3) When a Dealer Member’s status changes to inactive, the Corporation must publish a notice indicating so. (4) A Dealer Member with inactive status may apply in writing to the Board for an extension to the time period of its inactive status if:
(i) the written application is made at least 30 days before the Dealer Member’s inactive status expires, and (ii) the inactive status period has not been extended previously. (5) When a Dealer Member’s inactive status or the extension to the period of time established by the Board for inactive status expires, the Dealer Member’s status will automatically revert to that of a Dealer Member.
2229. – 2244. Reserved.
PART C ‐ BUSINESS CHANGE NOTIFICATION REQUIREMENTS
2245. Introduction
(1) The Corporation may review the changes in a Dealer Member’s business, listed in section 2246, to ensure they meet Corporation requirements.
2246. Dealer Member’s notice of changes to the Corporation
(1) A Dealer Member must notify the Corporation in writing a minimum of 20 days before:

Corporation Investment Dealer and Partially Consolidated Rules Series 2000 | Dealer Member Organization and Individual Approval Rules Rule 2200 (i) changing its name, (ii) changing its constitution in a way that affects voting rights, (iii) taking any steps to dissolve, wind up, surrender its charter, liquidate or dispose of all or substantially all its assets, or (iv) altering its capital structure including, allotting, issuing, repurchasing, redeeming, canceling, subdividing or consolidating of any shares in its capital. (2)   A Dealer Member must notify the Corporation in writing before any material change to its business activities.
2247. Notice of review
(1) A Dealer Member must not make any of the changes listed in section 2246 if, within the 20 day notice period, the Corporation informs the Dealer Member that it will be reviewing the proposed change and the change will require Corporation approval.
2248. – 2264.  Reserved.
PART D ‐ BRANCH OFFICES OF DEALER MEMBERS
2265. Introduction
(1) Part D of Rule 2200 describes how Dealer Members’ branch offices participate in the Corporation and its Regions.
2266. Branch office members
(1) Every Dealer Member’s business location in a Region with a Supervisor, who is normally present at the business location, is a branch office member of the Region.
2267. Branch office member’s representation
(1) A branch office member may participate in governing the Region in which the branch office is located, as follows:
(i) it has the same privileges in its Region as any other branch office member, except that at a Region meeting, a Dealer Member only has one vote in the Region, no matter how many branch office members it has, and (ii) its Region representative is eligible for election as chair, vice‐chair or member of the Regional Council for that Region.
2268. Fees
(1) A Dealer Member does not have to pay an annual fee or entrance fee for its branch office members.
2269. – 2279.  Reserved.
PART E ‐ TRADE NAMES AND DISCLOSURES
2280. Introduction
(1) Part E of Rule 2200 covers a Dealer Member’s use of trade names, Corporation membership disclosure and Investor Protection Fund membership disclosure.

Corporation Investment Dealer and Partially Consolidated Rules Series 2000 | Dealer Member Organization and Individual Approval Rules Rule 2200
2281. Trade names
(1) If a Dealer Member carries on business under a trade name, the trade name must be owned by the Dealer Member, an Approved Person of the Dealer Member or an affiliate of the Dealer Member. (2) An Approved Person must not conduct any business under a trade name that is not owned by the Dealer Member or its affiliate without the Dealer Member’s prior consent. (3) A Dealer Member or Approved Person must not use a trade name that any other Dealer Member uses unless:
(i) the Dealer Members are related companies or affiliate companies, or (ii) the relationship with the other Dealer Member is that of introducing broker and carrying broker. (4) A Dealer Member or Approved Person must not use a deceptive or misleading trade name.
2282. Corporation notification
(1) A Dealer Member must notify the Corporation before it:
(i) uses any trade name other than the Dealer Member’s legal name, or (ii) transfers a trade name to another Dealer Member. (2) The Corporation may prohibit a Dealer Member or Approved Person from using a trade name that is:
(i) contrary to sections 2281, 2282 or2283,
(ii) contrary to the public interest, or
(iii) otherwise objectionable.
2283. Displaying the full legal name
(1) A Dealer Member must include its full legal name on all contracts and materials used to communicate with the public, whether or not it uses a trade name. (2) An Approved Person that uses a trade name different from that of the Dealer Member on materials used to communicate with the public must also include the Dealer Member’s full legal name in size at least equal to that of the Approved Persons’ trade name. (3) Materials used to communicate with the public include, but are not limited to the following:
letterhead, business cards, invoices, trade confirmations, monthly statements, websites, research reports and advertisements.
2284. Investor protection fund membership disclosure requirements for Dealer Members
(1) A Dealer Member must disclose to its clients:
(i) that it is a member of an investor protection fund, (ii) the name of the investor protection fund, and (iii) the investor protection fund coverage available for eligible accounts, in accordance with the IPF Disclosure Policy.

Corporation Investment Dealer and Partially Consolidated Rules Series 2000 | Dealer Member Organization and Individual Approval Rules Rule 2200
2285. Corporation membership disclosure requirements for Dealer Members
(1) A Dealer Member must disclose to its clients:
(i) that it is regulated, and
(ii) the name of its regulator, in accordance with the Corporation Membership Disclosure Policy.
2286. –2299. Reserved.

Corporation Investment Dealer and Partially Consolidated Rules Series 2000 | Dealer Member Organization and Individual Approval Rules Rule 2300 RULE 2300 | PRINCIPAL AND AGENT RELATIONSHIPS
2301. Introduction
(1) Rule 2300 describes the requirements of relationships between Dealer Members and their agents.
2302. Principal and agent relationships
(1) An individual who conducts securities related business on behalf of a Dealer Member must be an employee (which includes an agent) of the Dealer Member. (2) A Dealer Member must not allow a corporation or other non‐individual entity to conduct securities related business on its behalf.
2303. Written agreement between the Dealer Member and the Corporation
(1) Before engaging any agents to conduct securities related business, a Dealer Member must enter into a written agreement with the Corporation. (2) The written agreement must contain terms describing the Dealer Member’s responsibility:
(i) for the agent’s conduct, including the agent’s compliance with Corporation requirements and securities laws, and (ii) to clients for the agent’s acts and omissions relating to the Dealer Member’s business. (3) The Corporation must be satisfied with the form of the written agreement. (4) The written agreement must be in a form similar to the following:
“Agreement between a Dealer Member and the Corporation
1. Recitals
(i) As a Dealer Member of [Name of Corporation], the Dealer Member agrees it is subject to Corporation requirements. (ii) Section 2303 of the Corporation Investment Dealer and Partially Consoldiated Rules, “Written agreement between the Dealer Member and the Corporation”, requires the Dealer Member to make this agreement with the Corporation. (iii) This agreement is in addition to and does not alter Corporation requirements or any other agreement between the Dealer Member and the Corporation.
2. Agreement with the Agent
(i) The Dealer Member must enter into a written agreement with each of its agents as required by section 2304 of the Corporation Investment Dealer and Partially Consoldiated Rules, “Written agreement between the Dealer Member and its agents”, and any successor rules relating to principal and agent relationships. (ii) The agreement must require that the agent complies with all applicable laws and Corporation requirements.
3. Supervision of the Agent
The Dealer Member must treat each of its agents as employees with respect to:
(i) administration of Corporation requirements, (ii) supervision of the agent under Corporation requirements, and

Corporation Investment Dealer and Partially Consolidated Rules Series 2000 | Dealer Member Organization and Individual Approval Rules Rule 2300 (iii) ensuring its agents comply with all applicable laws and Corporation requirements.
4. Written Disclosure of Respective Responsibilities to Clients
The Dealer Member or the agent must disclose to clients at the time of opening an account:
(i) the list of securities related business activities conducted by the agent for which the Dealer Member is responsible, and (ii) that the Dealer Member is not responsible for any other business activity conducted by the agent.
5. Disclosure to Clients
The disclosure to clients must be made using the following language in the account application:
“If your investment advisor is an agent of [the Dealer Member name], [Dealer Member name] is irrevocably liable to you for any acts and omissions of your investment advisor with regard to [Dealer Member name] business as if the investment advisor were an employee of [Dealer Member name]. By continuing to deal with our firm, you accept our offer of indemnity.”
6. Disclosure by Agent
Where the disclosure described in 4(i) and (ii) is made by the agent, the Dealer Member must ensure that the agent has made the disclosure directly to the clients.
7. Regulatory Authority of the Corporation
The Dealer Member acknowledges that the Corporation has the authority to regulate and enforce the provisions set out in the Dealer Member and agent agreement.
8. Governing Laws
This agreement is governed by the laws of [applicable province] and the laws of Canada.
9. Continuing Benefit
The agreement is for the benefit of and binding upon the parties and their successors and assigns. The Dealer Member may not assign the agreement without the Corporation’s prior written consent. DATED as of the __________day of _____________, ______ [DEALER MEMBER] ______________________ [NAME AND TITLE OF SIGNING INDIVIDUAL] ______________________”
2304. Written agreement between the Dealer Member and its agents
(1) The Dealer Member and the agent who conducts securities related business must enter into a written agreement. (2) The written agreement must not contain any terms inconsistent with Corporation requirements or securities laws.

Corporation Investment Dealer and Partially Consolidated Rules Series 2000 | Dealer Member Organization and Individual Approval Rules Rule 2300 (3) The Corporation must be satisfied with the form of the written agreement before the Dealer Member finalizes the agreement with the agent. (4) The Dealer Member must certify to the Corporation that the written agreement complies with Rule 2300 and any other applicable Corporation requirements. (5) The Corporation may request that the Dealer Member obtain a legal opinion confirming subsection 2304(4). (6) The Corporation must be satisfied that the written agreement complies with applicable laws relating to tax matters. (7) The written agreement must contain the following minimum terms:
(i) Compliance with the applicable laws
The agent and the Dealer Member confirm that this agreement does not violate applicable laws. (ii) Confirmation of supremacy of Corporation requirements The agent and the Dealer Member confirm that:
(a) this agreement is made in compliance with Corporation requirements, (b) if there is an inconsistency between this agreement and any applicable Corporation requirements, the Corporation requirements will prevail, (c) any inconsistent terms will be deemed severed and deleted, (d) The Corporation has the authority to regulate and enforce the provisions set out in this agreement, and (e) this agreement will be interpreted and enforced to give full effect to any applicable Corporation requirements. (iii) Compliance by the agent with applicable laws, securities laws, and Corporation requirements (a) The agent warrants to the Dealer Member that it is appropriately registered or licensed, in good standing and in compliance with all applicable laws, securities laws and Corporation requirements. (b) The agent covenants to comply with all applicable laws, securities laws and Corporation requirements. (c) The agent agrees to be bound by and comply with the warranties and covenants above throughout the term of the agreement. (iv) Conduct of the agent’s business (a) The agent agrees to conduct all business in the Dealer Member’s name, subject to sections 2281 through 2283 relating to the use of trade names. (b) The agent agrees to conduct all securities related business activities through the Dealer Member. (v) Supervision of the agent by the Dealer Member The Dealer Member agrees to be:

Corporation Investment Dealer and Partially Consolidated Rules Series 2000 | Dealer Member Organization and Individual Approval Rules Rule 2300 (a) responsible for the supervision of the agent’s conduct to provide reasonable assurance of the agent’s compliance with Corporation requirements and the requirements of any other securities regulatory authority to which the Dealer Member is subject, and (b) liable to clients (and other third parties) for the agent’s conduct as if they were an employee. (vi) Written disclosure to clients If the Dealer Member and the agent have agreed that the agent will advise the clients directly:
(a) the list of securities related business activities conducted by the agent for which the Dealer Member is responsible, and (b) that the Dealer Member is not responsible for any other business activity conducted by the agent, the Dealer Member agrees to be responsible for ensuring that the agent has done so. (vii) Dealer Member assumes responsibility for clients (a) In the event that:
(I) the Corporation or another securities regulatory authority has advised the Dealer Member that it has started an investigation relating to allegations of misconduct by the agent, or (II) the Dealer Member has reasonable grounds to believe that the agent has contravened or may be contravening one or more Corporation requirements or securities laws, the Dealer Member may immediately and without notice to the agent, assume responsibility for the client to the exclusion of the agent. (b) The agent may not have any dealings or communications with the client as long as the Dealer Member has assumed this responsibility. (c) The Dealer Member may designate another qualified person to provide services to the client, and that person may receive any remuneration that would have been paid to the agent. (viii) Outside activities (a) The agent agrees not to conduct any outside activity without disclosing to and obtaining the written consent of the Dealer Member. (b) If the agent is involved in an outside activity, the Dealer Member agrees to monitor and enforce compliance with the terms of this agreement directly and not through another employer or principal of the agent. (c) The agent agrees to ensure that the outside activity will not interfere with the Dealer Member or the Corporation monitoring and enforcing compliance by the agent with this agreement or Corporation requirements.

Corporation Investment Dealer and Partially Consolidated Rules Series 2000 | Dealer Member Organization and Individual Approval Rules Rule 2300 (ix) Access to premises The agent agrees to give the Dealer Member unrestricted access to the premises where the agent conducts securities related business on the Dealer Member’s behalf. (x) Records The agent agrees that the books and records kept by the agent for the Dealer Member’s business:
(a) will conform to Corporation requirements, (b) are the Dealer Member’s property, (c) are available at all times for review by and delivery to the Dealer Member, and (d) shall be delivered to the Dealer Member on termination of the agreement. (xi) Insurance The Dealer Member agrees to maintain financial institution bond and insurance policies that cover the agent’s conduct relating to the securities related business activities they conduct for the Dealer Member. (xii) Assignment of agreement The agent acknowledges that the Dealer Member has the right to assign to the Corporation any or all of the Dealer Member’s rights to enforce the terms of this agreement that relate to Corporation requirements.
2305. –2399. Reserved.

Corporation Investment Dealer and Partially Consolidated Rules Series 2000 | Dealer Member Organization and Individual Approval Rules Rule 2400 RULE 2400 | ACCEPTABLE BACK OFFICE ARRANGEMENTS
2401. Introduction
(1) In order to manage back office expenses, Dealer Members may enter into arrangements that involve back office service sharing with another organization. Services shared may include any combination of: trade execution, trade clearing and settlement, trade financing, trade related cash and security custody and trade related books and records. In some cases, before an arrangement can commence, the parties must agree to specific Corporation arrangement conditions, including obtaining Corporation approval of the arrangement. (2) Sections 2401 through 2480 sets out the specific Corporation requirements for a number of arrangements that a Dealer Member may enter into and is organized as follows:
Part A – Requirements for acceptable arrangements between two Dealer Members including:
Part A.1 – General requirements
[sections 2403 through 2407]
Part A.2 – Specific requirements for Type 1 introducing broker / carrying broker
arrangements
[section 2410]
Part A.3 – Specific requirements for Type 2 introducing broker / carrying broker
arrangements
[section 2415]
Part A.4 – Specific requirements for Type 3 introducing broker / carrying broker
arrangements
[section 2420]
Part A.5 – Specific requirements for Type 4 introducing broker / carrying broker
arrangements
[section 2425]
Part B – Requirements for acceptable arrangements between a Dealer Member and a Mutual
Fund Dealer Member
[sections 2430 and 2431]
Part C – Requirements for acceptable arrangement between a Dealer Member and a foreign
affiliate dealer
[sections 2435 and 2436]
Part D – Permitted arrangements that are not considered to be introducing broker / carrying
broker arrangements
[sections 2460 and 2461]
Part E – Prohibited arrangements
[section 2480]

Corporation Investment Dealer and Partially Consolidated Rules Series 2000 | Dealer Member Organization and Individual Approval Rules Rule 2400
2402. Definitions
(1) The following terms have the meaning set out below when used in sections 2402 through 2480:
“clearing arrangement” An arrangement entered into between two dealers under which all of the following services are provided by one dealer (“clearing broker”) to the other dealer for one or more lines of business:
(i) trade execution,
(ii) trade settlement, and
(iii) client account bookkeeping.
Trade financing or account financing, custody of client cash and custody of client security positions services must not be provided as part of this arrangement. “introducing broker / carrying broker arrangement” An arrangement entered into between two dealers under which all of the following services are provided by one dealer, the carrying broker, to the other dealer, the introducing broker, for one or more lines of business:
(i) trade settlement,
(ii) custody of client cash,
(iii) custody of client security positions, and (iv) client account bookkeeping. Trade execution and trade financing or account financing services may or may not be provided as part of this arrangement.
PART A ‐ ARRANGEMENTS BETWEEN TWO DEALER MEMBERS – GENERAL REQUIREMENTS
PART A.1 ‐ GENERAL REQUIREMENTS
2403. Arrangements that may be executed
(1) A Dealer Member that wants to become an introducing broker may enter into one of the following introducing broker / carrying broker arrangements with another Dealer Member:
(i) a Type 1 or 2 introducing broker/carrying broker arrangement for all of its Dealer Member related activities, (ii) a Type 1 or 2 introducing broker/carrying broker arrangement for all of its Dealer Member related activities other than trading in futures contracts and futures contract options, or (iii) a Type 3 or 4 introducing broker/carrying broker arrangement for one or more of its Dealer Member related activities business lines.
2404. Additional conditions that apply to an introducing broker under a Type 1 introducing broker/carrying
broker arrangement
(1) A Dealer Member that is an introducing broker under a Type 1 introducing broker/carrying broker arrangement with another Dealer Member:
(i) must not enter into any additional introducing broker / carrying broker arrangements with another Dealer Member unless the arrangement is a Type 1 introducing broker/carrying broker arrangement or Type 2 introducing broker/carrying broker arrangement that provides back office services exclusive to trading in futures contracts and futures contract options,

Corporation Investment Dealer and Partially Consolidated Rules Series 2000 | Dealer Member Organization and Individual Approval Rules Rule 2400 (ii) must not self‐clear any part of its Dealer Member related activities other than self‐clearing trading in futures contracts and futures contracts options, and (iii)   must use its carrying broker’s facilities for its principal trading, settlement, and securities custody.
2405. Additional conditions that apply to an introducing broker under a Type 2 introducing broker/carrying
broker arrangement
(1) A Dealer Member that is an introducing broker under a Type 2 introducing broker/carrying broker arrangement with another Dealer Member:
(i) must not enter into any additional introducing broker / carrying broker arrangements with another Dealer Member unless the arrangement is a Type 1 introducing broker/carrying broker arrangement or Type 2 introducing broker/carrying broker arrangement that provides back office services exclusive to trading in futures contracts and futures contract options, (ii) must not self‐clear any part of its Dealer Member related activities other than self‐clearing trading in futures contracts and futures contracts options, and (iii)   may use brokers other than its carrying broker for its principal trading, settlement, and securities custody.
2406. Additional conditions that apply to an introducing broker under either a Type 3 introducing
broker/carrying broker or a Type 4 introducing broker/carrying broker arrangement (1) A Dealer Member that is an introducing broker under a Type 3 introducing broker/carrying broker arrangement or Type 4 introducing broker/carrying broker arrangement with another Dealer Member:
(i)   must not enter into any Type 1 or Type 2 introducing broker/carrying broker arrangements for one or more of its remaining Dealer Member related activities business lines, (ii) may, where a business case can be made, enter into additional Type 3 introducing broker/carrying broker arrangement or Type 4 introducing broker/carrying broker arrangements for one or more of its remaining Dealer Member related activities business lines, (iii) may self‐clear one or more of its remaining Dealer Member related activities business lines, and (iv) may use brokers other than its carrying broker for its principal trading, settlement, and securities custody.
2407. Requirement for an agreement
(1) A Dealer Member that is an introducing broker may enter into an arrangement permitted within sections 2403 through 2406 with another Dealer Member if both parties enter into a written introducing broker / carrying broker agreement:
(i) in a form acceptable to the Corporation,
(ii) that specifies the type of arrangement being entered into as a Type 1, Type 2, Type 3 or Type 4 introducing broker/carrying broker arrangement,

Corporation Investment Dealer and Partially Consolidated Rules Series 2000 | Dealer Member Organization and Individual Approval Rules Rule 2400 (iii) whose terms comply with the requirements of sections 2401 through 2480 that apply to the type of arrangement being entered into, and (iv) which is approved by the Corporation in advance of it coming into effect.
2408. – 2409.  Reserved.
PART A.2 ‐ SPECIFIC REQUIREMENTS FOR TYPE 1 INTRODUCING BROKER / CARRYING BROKER
ARRANGEMENTS
2410. Type 1 introducing broker/carrying broker arrangement – requirements
The parties to a Type 1 introducing broker / carrying broker arrangement  between two Dealer Members must comply with the following requirements:
(1) Minimum capital requirement
(i) The introducing broker must maintain at all times minimum capital of $75,000 for the purposes of calculating risk adjusted capital. (2) Margin requirements to be provided by the introducing broker (i) The introducing broker must maintain the required margin for principal business it introduces to the carrying broker. (3) Margin requirements to be provided by the carrying broker (i) The carrying broker must maintain the required margin:
(a) for client business it carries for the introducing broker, and (b)   for any settlement date equity deficiency amounts relating to the principal business it carries for the introducing broker in accordance with the margin requirements for an account with another regulated entity, as set out in Note 4 of the Notes and Instructions to Schedule 5 of Form 1. (4) Offsets of carrying broker margin requirements against deposits (i) The carrying broker may reduce any margin it is required to provide under subsection 2410(3) by the least of the following amounts:
(a) the margin requirement,
(b) the loan value of any introducing broker deposits held by the carrying broker, and (c)   the introducing broker’s excess risk adjusted capital. Where a reduction is taken, the carrying broker must promptly notify the introducing broker. (5) Reporting client balances (i) When calculating risk adjusted capital, the carrying broker must report on Statement A and
Schedule 4 of Form 1 and the Monthly Financial Report all client accounts introduced by the
introducing broker. The introducing broker must not report these accounts. (6) Net client balances / funding (i) The carrying broker must meet financing requirements for client accounts introduced by the introducing broker. (7) Deposits provided to the carrying broker by the introducing broker (i)   The carrying broker must:

Corporation Investment Dealer and Partially Consolidated Rules Series 2000 | Dealer Member Organization and Individual Approval Rules Rule 2400 (a) segregate security deposits provided by the introducing broker, (b) hold cash deposits in a separate bank account in trust for the introducing broker, and (c) report all deposits it receives from the introducing broker as a liability on its Form 1 and Monthly Financial Report. (ii) The introducing broker must:
(a) report as a non‐allowable asset on the introducing broker’s Form 1 and Monthly Financial Report:
(I) any portion of a deposit that a carrying broker has used to offset its margin requirements under subsection 2410(4), and (II) any portion of a deposit that is impaired in value because the carrying broker carries client accounts with unsecured debit balances, and, (b) report as an allowable asset on the introducing broker’s Form 1 and Monthly Financial Report any remaining deposits not classified as a non‐allowable asset under sub‐ clause 2410(7)(ii)(a). (8) Concentration calculations (i) When completing the concentration calculations in Schedules 9 and 12 of Form 1, the carrying broker must include, and the introducing broker must not include, all client positions the carrying broker maintains for the introducing broker. (9) Segregating client securities (i) The carrying broker must segregate securities for clients introduced by the introducing broker in accordance with Corporation requirements relating to segregation. (10) Free credit segregation (i) The carrying broker must segregate free credits for client accounts introduced by the introducing broker in accordance with Corporation requirements including, but not limited to, Statement D of Form 1. (11) Insurance coverage requirements of the introducing broker (i) The introducing broker must:
(a) include all accounts introduced to the carrying broker:
(I) when calculating client net equity for the purposes of determining minimum Financial Institution Bond insurance coverage levels under section 4458, and (II) when determining adequate insurance coverage levels for registered mail under
section 4455,
(b) maintain Financial Institution Bond insurance coverage for the types of losses specified under section 4456 and in the amounts that meet the minimum coverage levels specified in section 4458, and (c) maintain adequate insurance for registered mail specified under section 4455. (12) Insurance coverage requirements of the carrying broker (i) The carrying broker must:
(a) include all accounts it carries for the introducing broker:

Corporation Investment Dealer and Partially Consolidated Rules Series 2000 | Dealer Member Organization and Individual Approval Rules Rule 2400 (I) when calculating client net equity for the purposes of determining minimum Financial Institution Bond insurance coverage levels under section 4458, and (II) when determining adequate insurance coverage levels for registered mail under
section 4455,
(b) maintain Financial Institution Bond insurance coverage for the types of losses specified under section 4456 and in the amounts that meet the minimum coverage levels specified in section 4457, and (c) maintain adequate insurance for registered mail specified under section 4455. (13) Client account opening required disclosure (i) At the time of opening a client account, the introducing broker must:
(a) advise the client of:
(I) its relationship to the carrying broker, and (II) the client’s relationship to the carrying broker, and (b) obtain from the client a Corporation approved form acknowledging it has provided the client with the disclosure required by sub‐clause 2410(13)(i)(a). (14) Parties to margin and guarantee documents (i) The introducing broker and the carrying broker must both be parties to any margin agreements and guarantee documents. (15) Disclosure on contracts, statements and correspondence (i) To ensure ongoing disclosure of the introducing broker / carrying broker relationship to clients, the introducing broker and carrying broker must both show their names and roles on all client account contracts, statements, correspondence and other documents. Because of this ongoing disclosure, annual disclosure of the introducing broker / carrying broker relationship is not required. (16) Clients introduced to the carrying broker (i) A client introduced to the carrying broker by the introducing broker must be considered a client of both the introducing broker and the carrying broker for the purposes of compliance with Corporation requirements. (17) Compliance with non‐financial requirements (i) The introducing broker and the carrying broker are jointly and severally responsible for compliance with all non‐financial Corporation requirements for each account the introducing broker introduces to the carrying broker unless stated otherwise in this section. (18) Handling client cash (i) The introducing broker must not accept or handle client funds in the form of money. (ii) With the carrying broker’s advance approval, the introducing broker may accept a cheque in the carrying broker’s name from a client whose account is carried by the carrying broker and:
(a) deliver it to the carrying broker on the day it is received by the introducing broker or the next business day, or

Corporation Investment Dealer and Partially Consolidated Rules Series 2000 | Dealer Member Organization and Individual Approval Rules Rule 2400 (b) arrange for the carrying broker to pick it up on the day it is received by the introducing broker or the next business day. (iii) A client may send a cheque directly to the carrying broker. (19) Reporting of introducing broker principal positions (i) The introducing broker must report all its principal positions carried by a carrying broker as inventory on its Form 1 and Monthly Financial Report. (ii) The carrying broker must report the balance of the principal trading account the introducing broker has with the carrying broker on its Form 1 and Monthly Financial Report.
2411. – 2414.  Reserved.
PART A.3 ‐ SPECIFIC REQUIREMENTS FOR TYPE 2 INTRODUCING BROKER / CARRYING BROKER
ARRANGEMENTS
2415. Type 2 introducing broker/carrying broker arrangement – requirements
The parties to a Type 2 introducing broker / carrying broker arrangement  between two Dealer Members must comply with the following requirements:
(1) Minimum capital requirement
(i) The introducing broker must maintain at all times minimum capital of $250,000 for the purposes of calculating risk adjusted capital. (2) Margin requirements to be provided by the introducing broker (i) The introducing broker must maintain the required margin for principal business it introduces to the carrying broker. (3) Margin requirements to be provided by the carrying broker (i) The carrying broker must maintain the required margin:
(a) for client business it carries for the introducing broker, and (b) for any settlement date equity deficiency amounts relating to the principal business it carries for the introducing broker in accordance with the margin requirements for an account with another regulated entity, as set out in Note 4 of the Notes and Instructions to Schedule 5 of Form 1. (4) Offsets of carrying broker margin requirements against deposits (i) The carrying broker may reduce any margin it is required to provide under subsection 2415(3) by the least of the following amounts:
(a) the margin requirement,
(b) the loan value of any introducing broker deposits held by the carrying broker, and (c)   the introducing broker’s excess risk adjusted capital. Where a reduction is taken, the carrying broker must promptly notify the introducing broker. (5) Reporting client balances (i) When calculating risk adjusted capital, the carrying broker must report on Statement A and
Schedule 4 of Form 1 and the Monthly Financial Report all client accounts introduced by the
introducing broker. The introducing broker must not report these accounts.

Corporation Investment Dealer and Partially Consolidated Rules Series 2000 | Dealer Member Organization and Individual Approval Rules Rule 2400 (6) Net client balances / funding (i) The carrying broker must meet financing requirements for client accounts introduced by the introducing broker. (7) Deposits provided to the carrying broker by the introducing broker (i)   The carrying broker must:
(a) segregate security deposits provided by the introducing broker, (b)   hold cash deposits in a separate bank account in trust for the introducing broker, and (c) report all deposits it receives from the introducing broker as a liability on its Form 1 and Monthly Financial Report. (ii) The introducing broker must:
(a)   report as a non‐allowable asset on the introducing broker’s Form 1 and Monthly Financial Report:
(I) any portion of a deposit that a carrying broker has used to offset its margin requirements under subsection 2415(4), and (II) any portion of a deposit that is impaired in value because the carrying broker carries client accounts with unsecured debit balances, and, (b) report as an allowable asset on the introducing broker’s Form 1 and Monthly Financial Report any remaining deposits not classified as a non‐allowable asset under sub‐ clause 2415(7)(ii)(a). (8) Concentration calculations (i) When completing the concentration calculations in Schedules 9 and 12 of Form 1, the carrying broker must include, and the introducing broker must not include, all client positions the carrying broker maintains for the introducing broker. (9) Segregating client securities (i) The carrying broker must segregate securities for clients introduced by the introducing broker in accordance with Corporation requirements relating to segregation. (10) Free credit segregation (i) The carrying broker must segregate free credits for client accounts introduced by the introducing broker in accordance with Corporation requirements including, but not limited to, Statement D of Form 1. (11) Insurance coverage requirements of the introducing broker (i) The introducing broker must:
(a) include all accounts introduced to the carrying broker:
(I) when calculating client net equity for the purposes of determining minimum Financial Institution Bond insurance coverage levels under section 4458, and (II) when determining adequate insurance coverage levels for registered mail under
section 4455,

Corporation Investment Dealer and Partially Consolidated Rules Series 2000 | Dealer Member Organization and Individual Approval Rules Rule 2400 (b) maintain Financial Institution Bond insurance coverage for the types of losses specified under section 4456 and in the amounts that meet the minimum coverage levels specified in section 4458, and (c) maintain adequate insurance for registered mail specified under section 4455. (12) Insurance coverage requirements of the carrying broker (i) The carrying broker must:
(a) include all accounts it carries for the introducing broker:
(I) when calculating client net equity for the purposes of determining minimum Financial Institution Bond insurance coverage levels under section 4458, and (II) when determining adequate insurance coverage levels for registered mail under
section 4455,
(b) maintain Financial Institution Bond insurance coverage for the types of losses specified under section 4456 and in the amounts that meet the minimum coverage levels specified in section 4457, and (c) maintain adequate insurance for registered mail specified under section 4455. (13) Client account opening required disclosure (i) At the time of opening a client account the introducing broker must:
(a) advise the client of:
(I) its relationship to the carrying broker, and (II) the client’s relationship to the carrying broker, and (b) obtain from the client a Corporation approved form acknowledging it has provided the client with the disclosure required by sub‐clause 2415(13)(i)(a). (14) Parties to margin and guarantee documents (i) The introducing broker and the carrying broker must both be parties to any margin agreements and guarantee documents. (15) Disclosure on contracts, statements and correspondence (i) The introducing broker must provide either ongoing or annual disclosure of its introducing broker / carrying broker relationship to clients as follows:
(a) where the introducing broker elects to provide ongoing relationship disclosure, the introducing broker and carrying broker must both show their names and roles on all client account contracts, statements, correspondence and other documents. Because of this ongoing disclosure, annual disclosure of the introducing broker / carrying broker relationship is not required, or (b) where the introducing broker elects to provide annual relationship disclosure:
(I) the introducing broker must show its name on all client account contracts, statements, correspondence and other documents, and (II) the introducing broker must provide an annual written disclosure to each of its clients whose accounts are carried by a carrying broker outlining the relationship between:
(A) the introducing broker and the carrying broker, and

Corporation Investment Dealer and Partially Consolidated Rules Series 2000 | Dealer Member Organization and Individual Approval Rules Rule 2400 (B) the client and the carrying broker. However, if the name and role of each of the introducing broker and the carrying broker is shown on all contracts, statements, correspondence and other documents, the annual disclosure under paragraph 2415(15)(i)(b)(II) is not required. (16) Clients introduced to the carrying broker (i) A client introduced to the carrying broker by the introducing broker must be considered a client of both the introducing broker and the carrying broker for the purposes of compliance with Corporation requirements. (17) Compliance with non‐financial requirements (i) For each account it introduces to the carrying broker, the introducing broker is responsible for compliance with all non‐financial Corporation requirements unless stated otherwise in this section. (18) Handling client cash (i) The introducing broker must not accept or handle client funds in the form of money. (ii) The introducing broker may accept a cheque from a client in the name of the introducing broker or carrying broker, provided that the cheque is deposited into a bank account in the carrying broker’s name or forwarded on to the carrying broker on the day it is received by the introducing broker or the next business day. (19) Reporting of introducing broker principal positions (i) The introducing broker must report all its principal positions carried by a carrying broker as inventory on its Form 1 and Monthly Financial Report. (ii) The carrying broker must report the balance of the principal trading account the introducing broker has with the carrying broker  on its Form 1 and Monthly Financial Report.
2416. – 2419.  Reserved.
PART A.4 ‐ SPECIFIC REQUIREMENTS FOR TYPE 3 INTRODUCING BROKER / CARRYING BROKER
ARRANGEMENTS
2420. Type 3 introducing broker/carrying arrangement – requirements
The parties to a Type 3 introducing broker / carrying broker arrangement  between two Dealer Members must comply with the following requirements:
(1) Minimum capital requirement
(i) The introducing broker must maintain at all times minimum capital of $250,000 for the purposes of calculating risk adjusted capital. (2) Margin requirements to be provided by the introducing broker (i) The introducing broker must maintain the required margin:
(a) for principal business it introduces to the carrying broker, and (b) for client business it introduces to the carrying broker. (3) Margin requirements to be provided by the carrying broker

Corporation Investment Dealer and Partially Consolidated Rules Series 2000 | Dealer Member Organization and Individual Approval Rules Rule 2400 (i) The carrying broker must maintain the required margin for any settlement date equity deficiency amounts relating to the principal business it carries for the introducing broker in accordance with the margin requirements for an account with another regulated entity, as set out in Note 4 of the Notes and Instructions to Schedule 5 of Form 1. (4) Offsets of carrying broker margin requirements against deposits (i) The carrying broker may reduce any margin it is required to provide under subsection 2420(3) by the lesser of the following amounts:
(a) the margin requirement, and
(b) the loan value of any introducing broker deposits held by the carrying broker. Where a reduction is taken, the carrying broker must promptly notify the introducing broker. (5) Reporting client balances (i)   When calculating risk adjusted capital, the introducing broker must report on Statement A and Schedule 4 of Form 1 and Monthly Financial Report all client accounts introduced to the carrying broker. The carrying broker must not report those accounts. (ii) The carrying broker must report on its Form 1 and Monthly Financial Report one balance owing to or from the introducing broker, representing client accounts it carries for the introducing broker. (iii) Although the carrying broker reports just one balance, its obligations and liabilities to each client whose account it carries for the introducing broker are not released, discharged, limited, or otherwise affected. (6) Net client balances / funding (i) The carrying broker must meet financing requirements for client accounts introduced by the introducing broker. (7) Deposits provided to the carrying broker by the introducing broker (i)   The carrying broker must:
(a) segregate security deposits provided by the introducing broker, (b)   hold cash deposits in a separate bank account in trust for the introducing broker, and (c) report all deposits it receives from the introducing broker as a liability on its Form 1 and Monthly Financial Report. (ii) The introducing broker must:
(a)   report as a non‐allowable asset on the introducing broker’s Form 1 and Monthly Financial Report any portion of a deposit that a carrying broker has used to offset its margin requirements under subsection 2420(4), and (b) report as an allowable asset on the introducing broker’s Form 1 and Monthly Financial Report any remaining deposits not classified as a non‐allowable asset under sub‐clause 2420(7)(ii)(a). (8) Concentration calculations (i) When completing the concentration calculations in Schedules 9 and 12 of Form 1, the introducing broker must include, and the carrying broker must not include, all client positions the carrying broker maintains for the introducing broker.

Corporation Investment Dealer and Partially Consolidated Rules Series 2000 | Dealer Member Organization and Individual Approval Rules Rule 2400 (9) Segregating client securities (i) The carrying broker must segregate securities for clients introduced by the introducing broker in accordance with Corporation requirements relating to segregation. (10) Free credit segregation (i) The carrying broker must segregate free credits for client accounts introduced by the introducing broker in accordance with Corporation requirements including, but not limited to, Statement D of Form 1. (11) Insurance coverage requirements of the introducing broker (i) The introducing broker must:
(a) include all accounts introduced to the carrying broker:
(I) when calculating client net equity for the purposes of determining minimum Financial Institution Bond insurance coverage levels under section 4457 and (II) when determining adequate insurance coverage levels for registered mail under
section 4455,
(b) maintain Financial Institution Bond insurance coverage for the types of losses specified under section 4456 and in the amounts that meet the minimum coverage levels specified in section 4457, and (c) maintain adequate insurance for registered mail specified under section 4455. (12) Insurance coverage requirements of the carrying broker (i) The carrying broker must:
(a) include all accounts it carries for the introducing broker:
(I) when calculating client net equity for the purposes of determining minimum Financial Institution Bond insurance coverage levels under section 4457, and (II) when determining adequate insurance coverage levels for registered mail under
section 4455,
(b) maintain Financial Institution Bond insurance coverage for the types of losses specified under section 4456 and in the amounts that meet the minimum coverage levels specified in section 4457, and (c) maintain adequate insurance for registered mail specified under section 4455. (13) Client account opening required disclosure (i) At the time of opening a client account the introducing broker must advise the client of:
(a) its relationship to the carrying broker, and (b) the client’s relationship to the carrying broker. (14) Parties to margin and guarantee documents (i) The introducing broker and the carrying broker must both be parties to any margin agreements and guarantee documents. (15) Disclosure on contracts, statements and correspondence (i) The introducing broker must provide either ongoing or annual disclosure of its introducing broker / carrying broker relationship to clients as follows:

Corporation Investment Dealer and Partially Consolidated Rules Series 2000 | Dealer Member Organization and Individual Approval Rules Rule 2400 (a) where the introducing broker elects to provide ongoing relationship disclosure, the introducing broker and carrying broker must both show their names and roles on all client account contracts, statements, correspondence and other documents. Because of this ongoing disclosure, annual disclosure of the introducing broker / carrying broker relationship is not required, or (b) where the introducing broker elects to provide annual relationship disclosure:
(I) the introducing broker must show its name on all client account contracts, statements, correspondence and other documents, and (II) the introducing broker must provide an annual written disclosure to each of its clients whose accounts are carried by a carrying broker outline the relationship between:
(A) the introducing broker and the carrying broker, and (B) the client and the carrying broker. However, if the name and role of each of the introducing broker and the carrying broker is shown on all contracts, statements, correspondence and other documents, the annual disclosure under paragraph 2420(15)(i)(b)(II) is not required. (16) Clients introduced to the carrying broker (i) A client introduced to the carrying broker by the introducing broker must be considered a client of both the introducing broker and the carrying broker for the purposes of compliance with Corporation requirements. (17) Compliance with non‐financial requirements (i) For each account it introduces to the carrying broker, the introducing broker is responsible for compliance with all non‐financial Corporation requirements unless stated otherwise in this section. (18) Handling client cash (i) The introducing broker may accept or handle client funds in the form of money. (ii) An introducing broker may facilitate transactions for a client account carried by a carrying broker by accepting client cheques:
(a) in the introducing broker’s name, and depositing those cheques in a bank account in the introducing broker’s name for eventual deposit to an account in the carrying broker’s name, or (b) in the carrying broker’s name for deposit directly into a bank account in the carrying broker’s name. (19) Reporting of introducing broker principal positions (i) The introducing broker must report all its principal positions carried by a carrying broker as inventory on its Form 1 and Monthly Financial Report. (ii) The carrying broker must report the balance of the principal trading account the introducing broker has with the carrying broker on its Form 1 and Monthly Financial Report.
2421. – 2424. Reserved.

Corporation Investment Dealer and Partially Consolidated Rules Series 2000 | Dealer Member Organization and Individual Approval Rules Rule 2400
PART A.5 ‐ SPECIFIC REQUIREMENTS FOR TYPE 4 INTRODUCING BROKER / CARRYING BROKER
ARRANGEMENTS
2425. Type 4 introducing broker/carrying broker arrangement – requirements
The parties to a Type 4 introducing broker / carrying broker arrangement  between two Dealer Members must comply with the following requirements:
(1) Minimum capital requirement
(i) The introducing broker must maintain at all times minimum capital of $250,000 for the purposes of calculating risk adjusted capital. (2) Margin requirements to be provided by the introducing broker (i) The introducing broker must maintain the required margin:
(a)   for principal business it introduces to the carrying broker, and (b) for client business it introduces to the carrying broker. (3) Margin requirements to be provided by the carrying broker (i) The carrying broker must maintain the required margin for any settlement date equity deficiency amounts relating to the principal business it carries for the introducing broker in accordance with the margin requirements for an account with another regulated entity, as set out in Note 4 of the Notes and Instructions to Schedule 5 of Form 1. (4) Offsets of carrying broker margin requirements against deposits (i) The carrying broker may reduce any margin it is required to provide under subsection 2425(3) by the lesser of the following amounts:
(a) the margin requirement, and
(b) the loan value of any introducing broker deposits held by the carrying broker. Where a reduction is taken, the carrying broker must promptly notify the introducing broker. (5) Reporting client balances (i)   When calculating risk adjusted capital, the introducing broker must report on Statement A and Schedule 4 of Form 1 and the Monthly Financial Report all client accounts introduced to the carrying broker. The carrying broker must not report those accounts. (ii) The carrying broker must report on its Form 1 and Monthly Financial Report one balance owing to or from the introducing broker, representing client accounts it carries for the introducing broker. (iii) Although the carrying broker reports just one balance, its obligations and liabilities to each client whose account it carries for the introducing broker are not released, discharged, limited, or otherwise affected. (6) Net client balances / funding (i) The introducing broker must meet financing requirements for client accounts it introduces to the carrying broker. (7) Deposits provided to the carrying broker by the introducing broker (i)   The carrying broker must:
(a) segregate security deposits provided by the introducing broker,

Corporation Investment Dealer and Partially Consolidated Rules Series 2000 | Dealer Member Organization and Individual Approval Rules Rule 2400 (b) hold cash deposits in a separate bank account in trust for the introducing broker, and (c) report all deposits it receives from the introducing broker as a liability on its Form 1 and Monthly Financial Report. (ii) The introducing broker must:
(a) report as a non‐allowable asset on the introducing broker’s Form 1 and Monthly Financial Report any portion of a deposit that a carrying broker has used to offset its margin requirements under subsection 2425(4), and (b) report as an allowable asset on the introducing broker’s Form 1 and Monthly Financial Report any remaining deposits not classified as a non‐allowable asset under sub‐ clause 2425(7)(ii)(a). (8) Concentration calculations (i) When completing the concentration calculations in Schedules 9 and 12 of Form 1, the introducing broker must include, and the carrying broker must not include, all client positions the carrying broker maintains for the introducing broker. (9) Segregating client securities (i) The carrying broker must segregate securities for clients introduced by the introducing broker in accordance with Corporation requirements relating to segregation. (10) Free credit segregation (i) The introducing broker must segregate free credits for client accounts it introduces to the carrying broker in accordance with Corporation requirements including, but not limited to, Statement D of Form 1. (11) Insurance coverage requirements of the introducing broker (i) The introducing broker must:
(a) include all accounts introduced to the carrying broker:
(I) when calculating client net equity for the purposes of determining minimum Financial Institution Bond insurance coverage levels under section 4457, and (II) when determining adequate insurance coverage levels for registered mail under
section 4455,
(b) maintain Financial Institution Bond insurance coverage for the types of losses specified under section 4456 and in the amounts that meet the minimum coverage levels specified in section 4457, and (c) maintain adequate insurance for registered mail specified under section 4455. (12) Insurance coverage requirements of the carrying broker (i) The carrying broker must:
(a) include all accounts it carries for the introducing broker:
(I) when calculating client net equity for the purposes of determining minimum Financial Institution Bond insurance coverage levels under section 4457, and (II) when determining adequate insurance coverage levels for registered mail under
section 4455,

Corporation Investment Dealer and Partially Consolidated Rules Series 2000 | Dealer Member Organization and Individual Approval Rules Rule 2400 (b) maintain Financial Institution Bond insurance coverage for the types of losses specified under section 4456 and in the amounts that meet the minimum coverage levels specified in section 4457, and (c) maintain adequate insurance for registered mail specified under section 4455. (13) Client account opening required disclosure (i) At the time of opening a client account the introducing broker must advise the client of:
(a) its relationship to the carrying broker, and (b) the client’s relationship to the carrying broker. (14) Parties to margin and guarantee documents (i) The introducing broker and the carrying broker or the introducing broker itself, may be party to any margin agreements and guarantee documents. (ii) Where the margin agreements or guarantee documents are only executed between the introducing broker and the client, the introducing broker / carrying broker agreement must provide that the carrying broker may protect its interest in unpaid securities of the introducing broker when the introducing broker becomes insolvent, bankrupt, or ceases to be a Dealer Member. (15) Disclosure on contracts, statements and correspondence (i) The introducing broker must provide either ongoing or annual disclosure of its introducing broker / carrying broker relationship to clients as follows:
(a) where the introducing broker elects to provide ongoing relationship disclosure, the introducing broker and carrying broker must both show their names and roles on all client account contracts, statements, correspondence and other documents. Because of this ongoing disclosure, annual disclosure of the introducing broker / carrying broker relationship is not required, or (b) where the introducing broker elects to provide annual relationship disclosure:
(I) the introducing broker must show its name on all client account contracts, statements, correspondence and other documents, (II) the introducing broker must provide an annual written disclosure to each of its clients whose accounts are carried by a carrying broker outlining the relationship between:
(A) the introducing broker and the carrying broker, and (B) the client and the carrying broker. However, if the name and role of each of the introducing broker and the carrying broker is shown on all contracts, statements, correspondence and other documents, the annual disclosure under paragraph 2425(15)(i)(b)(II) is not required. (16) Clients introduced to the carrying broker (i) A client introduced to the carrying broker by the introducing broker must be considered a client of both the introducing broker and the carrying broker for the purposes of compliance with Corporation requirements.

Corporation Investment Dealer and Partially Consolidated Rules Series 2000 | Dealer Member Organization and Individual Approval Rules Rule 2400 (17) Compliance with non‐financial requirements (i) For each account it introduces to the carrying broker, the introducing broker is responsible for compliance with all non‐financial Corporation requirements unless stated otherwise in this section. (18) Handling client cash (i) The introducing broker may accept or handle client funds in the form of money. (ii) An introducing broker may facilitate transactions for a client account carried by a carrying broker by accepting client cheques:
(a) in the introducing broker’s name, and depositing those cheques in a bank account in the introducing broker’s name for eventual deposit to an account in the carrying broker’s name, or (b) in the carrying broker’s name for deposit directly into a bank account in the carrying broker’s name. (19) Reporting of introducing broker principal positions (i) The introducing broker must report all its principal positions carried by a carrying broker as inventory on its Form 1 and Monthly Financial Report. (ii) The carrying broker must report the balance of the principal trading account the introducing broker has with the carrying broker on its Form 1 and Monthly Financial Report.
2426. – 2429. Reserved.
PART B – REQUIREMENTS FOR ACCEPTABLE ARRANGEMENTS BETWEEN A DEALER MEMBER AND A MUTUAL
FUND DEALER
2430. Arrangements between investment dealers and mutual fund dealers
(1) A Dealer Member may carry accounts for a Mutual Fund Dealer Member provided that:
(i) the Dealer Member and the Mutual Fund Dealer Member shall enter into a written introducing broker / carrying broker agreement evidencing the arrangement and reflecting the requirements of section 2431 and such other matters as may be required by the Corporation, (ii) the arrangement (including the form of agreement referred to in section 2431) and any amendment to or termination of the arrangement or agreement, shall have been approved by the Corporation before it is to become effective; and (iii) the arrangement shall be in compliance with the Corporation’s Investment Dealer and Partially Consolidated Rules, Mutual Fund Dealer Rules and Universal Market Integrity Rules and securities laws applicable to the introducing and carrying dealer or, where for a particular activity the introducing broker or carrying broker cannot comply with the requirements applicable to them, the introducing broker and carrying broker must request exemptive relief from the Corporation that specifies the manner in which the activity must be performed.

Corporation Investment Dealer and Partially Consolidated Rules Series 2000 | Dealer Member Organization and Individual Approval Rules Rule 2400
2431. Requirements that apply to each party involved in the arangement
(1) A Dealer Member may enter into an agreement with a Mutual Fund Dealer Member in accordance with section 2430 if it satisfies the following requirements:
(i) For activities performed by the carrying broker on the introducing broker’s behalf:
(a) the carrying broker will be subject to and must comply with the applicable rule requirements within the Corporation’s Investment Dealer and Partially Consolidated Rules and Universal Market Integrity Rules, (b) the carrying broker must perform these activities in a manner that does not interfere with the introducing broker’s ability to meet its compliance obligations under sub‐ clause 2431(1)(ii)(a), and (c) both the introducing broker and the carrying broker retain joint responsibility for:
(I) the proper performance of the activities, and (II) compliance with the applicable rules. (ii) For activities other than those performed by the carrying broker on the introducing broker’s behalf:
(a) the introducing broker will be subject to and must comply with the Corporation’s Mutual Fund Dealer Rules, (b) the introducing broker must perform these activities in a manner that does not interfere with the carrying broker’s ability to meet its compliance obligations under sub‐clause 2431(1)(i)(a), and (c) the introducing broker retains sole responsibility for:
(I) the proper performance of the activities, and (II) compliance with the applicable rules.
2432. ‐ 2434. Reserved.
PART C ‐ ARRANGEMENTS BETWEEN A DEALER MEMBER AND A FOREIGN AFFILIATE DEALER
2435. Arrangements that may be executed with a foreign affiliate
(1) A Dealer Member may carry the client accounts of its foreign affiliate dealer if:
(i) the Dealer Member enters into an introducing broker / carrying broker agreement type that is permissible pursuant to sections 2403 through 2425 to be entered into between two Dealer Members, (ii) the Dealer Member complies with the applicable conditions and requirements that apply to introducing broker / carrying broker agreement type set out in sections 2403 through 2425, including the requirement to enter into a written agreement, (iii) the written agreement is:
(a) in a form acceptable to the Corporation,
(b) specifies the type of arrangement being entered into is a Type 1, Type 2, Type 3 or Type 4 introducing broker/carrying broker arrangement, (c) includes terms that comply with the requirements of sections 2401 through 2480 that apply to the type of arrangement being entered into, and

Corporation Investment Dealer and Partially Consolidated Rules Series 2000 | Dealer Member Organization and Individual Approval Rules Rule 2400 (d) approved by the Corporation in advance of it coming into effect, and, (iv) the Dealer Member complies with the additional conditions set out in section 2436.
2436. Additional conditions that apply to an introducing broker / carrying broker arrangement involving a
foreign affiliate dealer
The parties to an introducing broker / carrying broker arrangement between a Dealer Member and its foreign affiliate dealer must comply with the following conditions and requirements:
(1) Annual disclosure requirement
(i) The foreign affiliate, at least annually, must provide written disclosure in a form satisfactory to the Corporation, to each of its clients whose accounts are carried by the Dealer Member outlining:
(a) the relationship between the Dealer Member and its foreign affiliate, (b) the relationship between the Dealer Member and the foreign affiliate’s client, and (c) any Investor Protection Fund coverage limitations on those client accounts. (2) Foreign jurisdiction approval (i) The Dealer Member must provide written approval of the arrangement between the Dealer Member and its foreign affiliate from the foreign affiliate’s regulatory authority. (3) Responsibility for compliance (i) The Dealer Member’s foreign affiliate is not required to comply with Corporation requirements solely because of the arrangement. (4) Reporting balances (i) When calculating risk adjusted capital the Dealer Member must report on Statement A and
Schedule 4 of Form 1 and the Monthly Financial Report one balance owing to or from its
foreign affiliate representing the accounts of the clients it carries on behalf of its foreign affiliate. (5) Segregating securities (i) The Dealer Member must segregate securities it holds for its foreign affiliate’s clients in accordance with Corporation requirements relating to segregation. (6) Insurance (i) The Dealer Member must include all accounts introduced to it by its foreign affiliate when calculating client net equity for minimum Financial Institution Bond coverage under section 4457 and 4458.
2437. – 2459. Reserved.
PART D ‐ PERMITTED ARRANGEMENTS THAT ARE NOT CONSIDERED TO BE INTRODUCING BROKER/CARRYING
BROKER ARRANGEMENTS
2460. Certain arrangements executed with a Canadian financial institution affiliate
(1) A Dealer Member’s arrangement under which employees of its affiliate handle securities clearing and settlement, maintain records, or perform operational functions is not considered an

Corporation Investment Dealer and Partially Consolidated Rules Series 2000 | Dealer Member Organization and Individual Approval Rules Rule 2400 introducing / carrying broker arrangement for the purposes of sections 2401  through 2480 provided the custodial functions are handled on a segregated basis according to Corporation requirements and the affiliate is:
(i)   a chartered bank,
(ii) an insurance company governed by federal or provincial insurance legislation, or (iii) a loan or trust company governed by federal or provincial loan and trust company legislation.
2461. Certain arrangements with other dealers
(1)   A Dealer Member’s clearing arrangement under which it acts as the clearing broker for another dealer is permitted and is not considered an introducing broker / carrying broker arrangement for the purposes of sections 2401  through 2480, provided that the arrangement also qualifies as a clearing arrangement under the rules of the relevant exchange or self‐regulatory organization in the jurisdiction of the other dealer.
2462. – 2479.  Reserved.
PART E ‐ PROHIBITED BACK OFFICE SHARING ARRANGEMENTS
2480. Prohibited introducing broker / carrying broker arrangements
(1) A Dealer Member must not enter into an introducing broker / carrying broker arrangement with any person except with:
(i) another Dealer Member, in accordance with the requirements in sections 2403 through 2425, (ii) a Mutual Fund Dealer Member, in accordance with the requirements in sections 2430 and 2431, or (ii) a foreign affiliate dealer, in accordance with the requirements in sections 2435 and 2436.
2481. – 2499.  Reserved.

Corporation Investment Dealer and Partially Consolidated Rules Series 2000 | Dealer Member Organization and Individual Approval Rules Rule 2500 RULE 2500 | DEALER MEMBER DIRECTORS AND EXECUTIVES, AND APPROVAL OF INDIVIDUALS
2501. Introduction
(1) Rule 2500 sets out requirements for a Dealer Member’s Directors and Executives including, its Chief Financial Officer, Chief Compliance Officer, and Ultimate Designated Person. (2) Rule 2500 is divided into the following parts:
Part A – Dealer Member Directors and Executives
[sections 2502 through 2507]
Part B – Approval of individuals
[sections 2550 through 2555]
PART A ‐ DEALER MEMBER DIRECTORS AND EXECUTIVES
2502. General requirements for Directors
(1) No individual may become a member of the board of directors of a Dealer Member unless that individual has been approved as a Director by the Corporation. (2) At least 40% of the Dealer Member’s Directors must:
(i) either:
(a) be actively engaged in the business of the Dealer Member and spend the majority of their time in the securities industry, except those on active government service, or who for health reasons are prevented from such active engagement, or (b) occupy a position equivalent to an Executive or a Director at a related or affiliated firm registered with a securities regulatory authority, an affiliated foreign securities dealer or advisor, or an affiliated Canadian financial institution, (ii) satisfy the applicable proficiency requirements of clause 2602(3)(xxviii), and (iii) have at least five years’ experience in the financial services industry, or such lessor period as may be acceptable to the Corporation. (3) The remaining Directors who do not meet subsection 2502(2) must, if actively engaged in the business of the Dealer Member or its related company, meet the requirements of sub‐clause 2502(2)(i)(b) and clause 2502(2)(ii).
2503. General requirements for Executives
(1) A Dealer Member’s Executives must:
(i) be either:
(a) actively engaged in the business of the Dealer Member and spend the majority of their time in the securities industry, except those on active government service, or who for health reasons are prevented from such active engagement, or (b) occupy a position equivalent to an Executive or Director at a related or affiliated firm registered with a securities regulatory authority, affiliated foreign securities dealer or advisor, or an affiliated Canadian financial institution, and

Corporation Investment Dealer and Partially Consolidated Rules Series 2000 | Dealer Member Organization and Individual Approval Rules Rule 2500 (ii) satisfy the applicable proficiency requirements of clause 2602(3)(xxvii). (2) At least 60% of the Dealer Member’s Executives must have at least five years of experience in the financial services industry, or such lessor period as may be acceptable to the Corporation.
2504. Exemption
(1) The Corporation may grant an exemption from any requirement or part of a requirement in sections 2502 or 2503 if it is satisfied that it would not harm the interests of the Dealer Member, its clients, the public or the Corporation. The exemption may be on any terms and conditions that the Corporation believes are necessary.
2505. Chief Financial Officer
(1) A Dealer Member must designate a Chief Financial Officer who must:
(i) be designated as an Executive and meet the general requirements for Executives set out in section 2503, and (ii) satisfy the applicable proficiency and experience requirements set out in clause 2602(3)(xxix). (2) The Chief Financial Officer need not be actively engaged in the business of the Dealer Member on a full‐time basis if appropriate for the Dealer Member’s business. (3) When a Chief Financial Officer ceases to be approved in the applicable category, the Dealer Member must either immediately:
(i) designate a qualified individual as Chief Financial Officer, or (ii) with the Corporation’s prior approval, designate an Executive as acting Chief Financial Officer. (4) When an acting Chief Financial Officer is designated:
(i) that individual must satisfy the applicable proficiency requirements of clause 2602(3)(xxix) and be designated as Chief Financial Officer, or (ii) the Dealer Member must designate another qualified individual as Chief Financial Officer, within 90 days of the previous Chief Financial Officer’s cessation date. (5) Any Dealer Member that fails to have a qualified Chief Financial Officer within 90 days of the cessation date of the previous Chief Financial Officer, or such other dates as the Corporation may specify, will be liable for and pay to the Corporation such fees as the Board may prescribe from time to time.
2506. Chief Compliance Officer
(1) A Dealer Member must designate a Chief Compliance Officer who must:
(i) be designated as an Executive and meet the general requirements for Executives set out in
section 2503, and
(ii) satisfy the applicable proficiency and experience requirements set out in clause 2602(3)(xxx). (2) The Chief Compliance Officer may be the Ultimate Designated Person, if approved by the Corporation.

Corporation Investment Dealer and Partially Consolidated Rules Series 2000 | Dealer Member Organization and Individual Approval Rules Rule 2500 (3) A Dealer Member may designate additional Chief Compliance Officers to be responsible for separate business units of the Dealer Member, if the Dealer Member has obtained the prior approval of the Corporation and any other applicable securities regulatory authority. (4) When a Chief Compliance Officer ceases to be approved in the applicable category, the Dealer Member must either immediately:
(i) designate a qualified individual as Chief Compliance Officer, or (ii) with the Corporation’s prior approval, designate an Executive as acting Chief Compliance Officer. (5) When an acting Chief Compliance Officer is designated:
(i) the individual must satisfy the applicable proficiency requirements of clause 2602(3)(xxx) and be designated as Chief Compliance Officer, or (ii) the Dealer Member must designate another qualified individual as Chief Compliance Officer, within 90 days of the previous Chief Compliance Officer’s cessation date. (6) Any Dealer Member that fails to have a qualified Chief Compliance Officer within 90 days of the cessation date of the previous Chief Compliance Officer, or such other dates as the Corporation may specify, will be liable for and pay to the Corporation such fees as the Board may prescribe from time to time.
2507. Ultimate Designated Person
(1) A Dealer Member must designate an Ultimate Designated Person who must be designated as an Executive and meet the general requirements for Executives set out in section 2503. (2) The Ultimate Designated Person must be:
(i) the chief executive officer of the Dealer Member or, if the Dealer Member does not have a chief executive officer, an individual acting in a capacity similar to a chief executive officer, (ii) the sole proprietor of the Dealer Member, or (iii) the Executive in charge of a division of the Dealer Member, if the activity that requires the Dealer Member to register occurs only within the division and the Dealer Member has significant other business activities. (3) A Dealer Member may designate additional Ultimate Designated Persons to be responsible for separate business units, with the prior approval of the Corporation and any other applicable securities regulatory authority. (4) If an individual who is approved as a Dealer Member’s Ultimate Designated Person ceases to meet any of the conditions listed in subsections 2507(1) and 2507(2), the Dealer Member must immediately designate another qualified individual to act as its Ultimate Designated Person or if unable to do so, promptly notify the Corporation of its plan to designate another qualified individual as its Ultimate Designated Person.

Corporation Investment Dealer and Partially Consolidated Rules Series 2000 | Dealer Member Organization and Individual Approval Rules Rule 2500
2508. – 2549.  Reserved.
PART B ‐ APPROVAL OF INDIVIDUALS
2550. Introduction
(1) Part B of Rule 2500 sets out the approval criteria for Approved Persons. (2)   Part B of Rule 2500 requirements are complementary to section 9204, which discuss individual approval applications.
2551. Individual approval
(1) An individual is not permitted to act as an Approved Person and a Dealer Member is not permitted to allow an individual to act as an Approved Person unless:
(i) the Dealer Member is registered or licensed (or exempt from such registration or licensing) in the appropriate category under securities laws in each jurisdiction in which clients of the Dealer Member reside or in which the Dealer Member carries on securities related business, (ii) the individual, if required to do so under securities laws, is registered or licensed (or exempt from such registration or licensing) in the appropriate category under securities laws in each jurisdiction in which clients of the individual reside or in which the individual carries on securities related business, and (iii)   the individual is approved by the Corporation in the appropriate Approved Person category, before the individual begins working in that role. In the case of a Registered Representative dealing in mutual funds only who is an employee of a firm registered as both an investment dealer and a mutual fund dealer, such approval will be automatic upon the individual’s registration as a Mutual Fund Dealer ‐ Dealing Representative. (2) Only a Dealer Member’s director, partner, officer or employee can be an Approved Person. (3) A Dealer Member must ensure that each Approved Person at the Dealer Member complies with Corporation requirements applicable to that individual’s Approved Person category. (4) All Approved Persons are subject to Corporation jurisdiction and must comply with Corporation requirements. (5) A Dealer Member must ensure that, when dealing with the public, its Approved Persons use titles and designations that accurately indicate:
(i) the type of business that they have been approved by the Corporation to conduct, and (ii) the role that they carry out or has been approved by the Corporation to carry out. (6) If an Approved Person ceases to be approved by the Corporation, the former Approved Person must immediately cease any activity requiring Corporation approval. (7) Except as set out in subsection 2551(8), an Approved Person must not accept, nor allow an associate to accept, directly or indirectly, any remuneration, gratuity, benefit or other consideration from any person other than the Dealer Member, its related companies, or affiliates for any Dealer Member related activities carried out by the Approved Person. (8) Where an individual:

Corporation Investment Dealer and Partially Consolidated Rules Series 2000 | Dealer Member Organization and Individual Approval Rules Rule 2500 (i) is approved as a Registered Representative dealing in mutual funds only pursuant to clause 2602(3)(vii), and (ii) acts as an agent of a Dealer Member in compliance with the requirements set out in Rule 2300, any remuneration, gratuity, benefit or other consideration in respect of business conducted by the individual on behalf of the Dealer Member may be paid by the Dealer Member to a corporation that is not registered under securities laws provided:
(iii) the arrangement is not prohibited or otherwise limited by the relevant securities laws or securities regulatory authorities, (iv) the corporation is incorporated under the laws of Canada or a province or territory of Canada, and (v) the individual, Dealer Member and the unregistered corporation have entered into a written agreement, in a form prescribed by the Corporation, the terms of which provide that:
(a) the individual and Dealer Member have the same:
(I) obligations to comply with applicable Corporation requirements and securities laws, and (ii) liabilities to third parties, including clients irrespective of the method by which any remuneration, gratuity, benefit or other consideration is disbursed, (b) the Dealer Member shall engage in appropriate supervision with respect to the conduct of the individual and the unregistered corporation to ensure compliance with the requirements in sub‐clause 2551(8)(v)(a) and all other appliable Corporation requirements, and (c) the individual and the unregistered corporation shall provide the Dealer Member, the Corporation and the applicable securities regulatory authorities with access to all books and records maintained by or on behalf of either of them for the purpose of ensuring compliance with the Corporation requirements and securities laws. (9) Subsection 2551(8) does not apply in respect of any remuneration, gratuity, benefit or other consideration derived from a client in Alberta.
2552. Compliance with the proficiency requirements or other conditions
(1) Each Approved Person must:
(i) meet the applicable proficiency requirements set out in Rule 2600 before Corporation approval is granted, and (ii) complete the applicable post‐approval course requirements of subsection 2602(3) after receiving Corporation approval. (2) The Corporation will automatically suspend an Approved Person if they do not complete all required post‐approval courses in the Approved Persons category as set out in Rule 2600. (3) The Corporation will reinstate an Approved Person once they have passed the required post‐ approval courses and the Corporation has been notified.

Corporation Investment Dealer and Partially Consolidated Rules Series 2000 | Dealer Member Organization and Individual Approval Rules Rule 2500 (4) A Dealer Member must file a report specified by the Corporation on the conditions imposed on an Approved Person under Rule 8200 or Rule 9200 within 10 business days of the end of each month. (5) If a Dealer Member does not file the report specified in subsection 2552(4) or files the report late, it must pay the Corporation the applicable late filing fee.
2553. Approval of Registered Representatives, Investment Representatives, Portfolio Managers and
Associate Portfolio Managers and their obligations (1) A Portfolio Manager and Associate Portfolio Manager is also permitted to conduct activities carried on by a Registered Representative in accordance with Corporation requirements applicable to Registered Representatives. (2) A Registered Representative, Investment Representative, Portfolio Manager or Associate Portfolio Manager may not conduct on behalf of a Dealer Member, and a Dealer Member may not permit the Approved Person to conduct on its behalf, the type of business as set out in clause 2553(2)(iv) and deal with a type of customer as set out in clauses 2553(2)(i) and (ii), unless the Dealer Member complies with the following:
(i) The Dealer Member must notify the Corporation, and seek the Corporation’s prior approval on whether the Registered Representative, Investment Representative, Portfolio Manager or Associate Portfolio Manager will deal with either retail clients or institutional clients. (ii) A Registered Representative dealing with:
(a) retail clients, may take orders from, or give advice to, all types of clients, or (b) institutional clients, may take orders from, or give advice to, institutional clients only. (iii) An Investment Representative dealing with:
(a) retail clients, may take orders from all types of clients, or (b) institutional clients, may take orders from institutional clients only. (iv) The Dealer Member must notify the Corporation which of its individuals approved as a Registered Representative, Investment Representative, Portfolio Manager or Associate Portfolio Manager will deal in or advise in:
(a) only mutual funds, government or government‐guaranteed debt instruments, and deposit instruments issued by a federally regulated bank, trust company, credit union or caisse populaire, except those for which all or part of the interest or return is indexed to the performance of another financial instrument or index, (b) options, (c) futures contracts and futures contract options, other than in any province where approval is required, and (d) general securities business; including equities, fixed income and other investment products not listed above. (3) An individual applying for approval as a Registered Representative or Investment Representative dealing with mutual fund business only must comply with the proficiency requirements in clauses 2602(3)(vi), 2602(3)(vii) or 2602(3)(xiii).

Corporation Investment Dealer and Partially Consolidated Rules Series 2000 | Dealer Member Organization and Individual Approval Rules Rule 2500 (4) A Registered Representative or Investment Representative approved to deal with mutual funds only must comply with the following:
(i) within 270 days of initial approval, successfully complete the Canadian Securities Course and the Conduct and Practices Handbook Course, and (ii) complete the applicable training program required before approval for a Registered Representative in clause 2602(3)(i) or an Investment Representative in clause 2602(3)(viii) and the Dealer Member must notify the Corporation that the restriction to mutual funds only has been removed. (5) Clause 2553(4)(ii) does not apply to a Registered Representative or Investment Representative qualified to deal in mutual funds only who was approved prior to September 28, 2009 and registered in provinces or territories which allowed the individual to be restricted to mutual funds only, provided they remain in the same restricted category of approval in the same provinces/territories. (6) Subsection 2553(4) does not apply to a Registered Representative qualified to deal in mutual funds only who is an employee of a firm that is registered as both an investment dealer and a mutual fund dealer. (7) The approval of an individual qualified to conduct only mutual fund business is automatically suspended if the individual fails to satisfy the requirement in subsection 2553(4) until the individual has satisfied the requirements and notifies the Corporation. (8) An Associate Portfolio Manager must not advise on securities unless, before giving the advice, the advice has been pre‐approved by the Portfolio Manager.
2554. The Approved Person’s activities outside of the Dealer Member
(1) An Approved Person may have, and continue in, an activity outside of the Dealer Member, if the outside activity:
(i) is not contrary to securities laws or Corporation requirements, and (ii) does not bring the securities industry into disrepute. (2) An Approved Person may have, and continue in, an outside activity, if:
(i) the Approved Person informs the Dealer Member of the outside activity, (ii) the Approved Person obtains the Dealer Member’s prior approval to engage in the outside activity, (iii) the Dealer Member’s policies and procedures specifically address:
(a) continuous service to clients, and
(b) potential conflicts of interest, and,
(iv) the Dealer Member notifies the Corporation of the outside activity within the time period and manner required by National Instrument 33‐109. (3) An individual must not act, and a Dealer Member must not permit an individual to act, as a Registered Representative, Investment Representative, Portfolio Manager, Associate Portfolio Manager or Trader in a manner that is contrary to section 4.1 of National Instrument 31‐103,

Corporation Investment Dealer and Partially Consolidated Rules Series 2000 | Dealer Member Organization and Individual Approval Rules Rule 2500 unless an exemption is granted by the applicable securities regulatory authority and such similar exemption request is also filed with and approved by the Corporation.
2555. Approval of investors
(1) Any investor who owns or holds a beneficial ownership interest in a significant equity interest in the Dealer Member or special warrants or other securities that are convertible into a significant equity interest in the Dealer Member must:
(i) be approved by the Corporation, and
(ii) if applicable, meet the proficiency requirements of subsections 2555(2) and 2555(3). (2) A Dealer Member’s Director who, directly or indirectly, owns or controls a voting interest of a Dealer Member of 10% or more must satisfy the proficiency requirements of clause 2602(3)(xxxi). (3) Any individual, other than a Dealer Member’s Director, who:
(i) is actively engaged in the business of the Dealer Member, and (ii) directly or indirectly owns or controls a voting interest in a Dealer Member of 10% or more, must satisfy the proficiency requirements of clause 2602(3)(xxxi) applicable to approved investors.
2556. – 2599. Reserved.

Corporation Investment Dealer and Partially Consolidated Rules Series 2000 | Dealer Member Organization and Individual Approval Rules Rule 2600 RULE 2600 | PROFICIENCY REQUIREMENTS AND EXEMPTIONS FROM PROFICIENCIES
2601. Introduction
(1) Rule 2600 sets out the minimum proficiency requirements for individuals requiring Corporation approval. The requirements are designed to ensure that Approved Persons are qualified to perform their job functions competently in order to meet their regulatory obligations and that a Dealer Member’s business is conducted with integrity. (2) Rule 2600 is divided into the following parts:
Part A –   Proficiency requirements
[sections 2602 and 2603]
Part B –   Exemptions from proficiency requirements
[sections 2625 through 2628]
Part C –   Transition provisions
[sections 2630 and 2631]
PART A ‐ PROFICIENCY REQUIREMENTS
2602. Proficiency requirements for Approved Persons and approved investors
(1) An Approved Person must not perform an activity that requires approval unless the Approved Person has the education, training and experience that a reasonable person would consider necessary to perform the activity competently, including understanding the structure, features and risks of each security the Approved Person recommends. (2)   The Dealer Member must ensure that an individual does not perform an activity that requires Corporation approval unless the individual has the education, training and experience that a reasonable person would consider necessary to perform the activity competently, including understanding the structure, features and risks of each security the individual recommends. (3) Each applicant in an Approved Person category or approved investor category must meet the proficiency requirements set out below for that category unless an exemption has been granted from the applicable proficiency requirements before the Corporation will grant approval. Unless otherwise stated, the Canadian Securities Institute administers the courses and examinations noted below. Registered Representatives and Investment Representatives  Registered Representative dealing with retail clients (other than Registered Representatives dealing in options, futures contracts and  futures contract options or dealing in mutual funds only)  Registered Representative dealing with institutional clients (other than Registered Representative dealing in options, futures contracts and futures contract options or dealing in mutual funds only)  Registered Representative dealing in options with retail clients  Registered Representative dealing in options with institutional clients  Registered Representative dealing in futures contracts and futures contract options with retail or institutional clients

Corporation Investment Dealer and Partially Consolidated Rules Series 2000 | Dealer Member Organization and Individual Approval Rules Rule 2600  Registered Representative dealing in mutual funds only who is an employee of a firm registered as an investment dealer and not registered as a mutual fund dealer  Registered Representative dealing in mutual funds only who is an employee of a firm registered as both an investment dealer and a mutual fund dealer  Investment Representative dealing with retail clients (other than Investment Representative dealing in options, futures contracts and futures contract options or dealing in mutual funds only)  Investment Representative dealing with institutional clients (other than Investment Representative dealing in options, futures contracts and futures contract options or dealing in mutual funds only)  Investment Representative dealing in options with retail clients  Investment Representative dealing in options with institutional clients  Investment Representative dealing in futures contracts or futures contract options with retail or institutional clients  Investment Representative dealing in mutual funds only who is an employee of a firm registered as an investment dealer and not registered as a mutual fund dealer Associate Portfolio Managers and Portfolio Managers  Associate Portfolio Managers providing discretionary portfolio management for managed accounts  Portfolio Managers providing discretionary portfolio management for managed accounts Traders  Trader  Trader on the Montréal Exchange Supervisors – Retail or Institutional  Supervisor of Registered Representatives or Investment Representatives (other than supervising options or futures contracts and futures contract options)  Supervisor of Registered Representatives or Investment Representatives dealing with clients in options  Supervisor of Registered Representatives or Investment Representatives dealing with clients in futures contracts and futures contract options Designated Supervisors  Supervisor designated to be responsible for the opening of new accounts and supervision of account activity  Supervisor designated to be responsible for the supervision of discretionary accounts  Supervisor designated to be responsible for the supervision of managed accounts  Supervisor designated to be responsible for the supervision of options accounts  Supervisor designated to be responsible for the supervision of futures contract /futures contract options accounts  Supervisor designated to be responsible for the pre‐approval of advertising, sales literature and correspondence  Supervisor designated to be responsible for the supervision of research reports Executives and Directors  Executive (including Ultimate Designated Person)  Director

Corporation Investment Dealer and Partially Consolidated Rules Series 2000 | Dealer Member Organization and Individual Approval Rules Rule 2600  Chief Financial Officer  Chief Compliance Officer Approved investors  approved investor Approved Persons category Courses completed before approval Courses to be completed after approval Experience and other requirements Registered Representatives and Investment Representatives (i) Registered Representative dealing with retail clients (other than Registered Representatives dealing in options, futures contracts and futures contract options or dealing in mutual funds only)  Canadian Securities Course or, Level I or any higher level of the CFA Program administered by the CFA Institute, and Conduct and Practices Handbook Course and  90‐day training program after completion of the Canadian Securities Course or CFA Program Level I or any higher level. The Dealer Member must employ the applicant full time during this program. OR New Entrants Course, if previously registered with a recognized foreign self‐ regulatory organization in a similar capacity within three years before requesting approval  Wealth Management Essentials Course within 30 months after approval date as a Registered Representative  Six months of supervision and supervisory reporting from initial approval date as a Registered Representative (ii) Registered Representative dealing with institutional clients (other than Registered Representatives dealing in options, futures contracts and futures contract options or dealing in mutual funds only)  Canadian Securities Course or, Level I or any higher level of the CFA Program administered by the CFA Institute, and Conduct and Practices Handbook Course OR  New Entrants Course, if previously registered with a recognized foreign self‐ regulatory organization in a similar capacity within three years before requesting approval

(iv) Registered
Representative dealing in options with institutional clients  The proficiency requirements of a Registered Representative dealing with institutional clients under clause 2602(3) (ii), AND  Both the Derivatives Fundamentals Course and the Options Licensing Course or Derivatives Fundamentals and Options Licensing Course or New Entrants Course, if previously registered with the Financial Industry Regulatory Authority in a similar capacity and dealing in options within three years

(vi) Registered
Representative dealing in mutual funds only who is an employee of a firm registered as an investment dealer and not registered as a mutual fund dealer  Canadian Securities Course or Canadian Investment Funds Course administered by the Investment Funds Institute of Canada or Investment Funds in Canada Course  Canadian Securities Course and Conduct and Practices Handbook Course within 270 days of initial approval, and  90‐day training program within 18 months of initial approval  The individual must upgrade to Registered Representative within 18 months of initial approval (vii) Registered Representative dealing in mutual funds only who is an employee of a firm registered as both an investment dealer and a mutual fund dealer  Canadian Securities Course or Canadian Investment Funds Course administered by the Investment Funds Institute of Canada or Investment Funds in Canada Course  Six months of supervision and supervisory reporting from initial approval date as Registered Representative

Corporation Investment Dealer and Partially Consolidated Rules Series 2000 | Dealer Member Organization and Individual Approval Rules Rule 2600 Approved Persons category Courses completed before approval Courses to be completed after approval Experience and other requirements AND  90‐day training program after completion of the Canadian Securities Course or Canadian Investment Funds Course or Investment Funds in Canada Course (viii) Investment Representative dealing with retail clients (other than Investment Representatives dealing in options, futures contracts and futures contract options or dealing in mutual funds only)  Canadian Securities Course, or Level I or any higher level of the CFA Program administered by the CFA Institute, and Conduct and Practices Handbook Course and 30‐day training program after completing the Canadian Securities Course or Level I or any higher level of the CFA Program. The Dealer Member must employ the applicant full‐time during this program OR  New Entrants Course, if previously registered with a recognized foreign self‐ regulatory organization in a similar capacity within three years before requesting approval  Six months of supervision and supervisory reporting from initial approval date as an Investment Representative (ix) Investment Representative dealing with institutional clients (other than Investment Representatives dealing in options, futures contracts and futures contract options or dealing in mutual funds only)  Canadian Securities Course, or Level I or any higher level of the CFA Program administered by the CFA Institute, and Conduct and Practices Handbook Course OR New Entrants Course, if previously registered with a recognized foreign self‐ regulatory organization in a similar capacity within three years before requesting approval

(xi) Investment
Representative dealing in options with institutional clients  The proficiency requirements for an Investment Representative dealing with institutional clients under clause 2602(3)(ix), AND  Both the Derivatives Fundamentals Course and the Options Licensing Course or Derivatives Fundamentals and Options Licensing Course or New Entrants Course, if previously registered with the Financial Industry Regulatory Authority in a similar capacity and dealing in options within three years

(xiii) Investment
Representative dealing in mutual funds only who is an employee of a firm registered as an investment dealer and not registered as a mutual fund dealer  Canadian Securities Course or Canadian Investment Funds Course administered by the Investment Funds Institute of Canada or Investment Funds in Canada Course  Canadian Securities Course and Conduct and Practices Handbook Course within 270 days of initial approval, and  30‐day training program within 18 months of initial approval  The individual must upgrade to Investment Representative within 18 months of initial approval Associate Portfolio Managers and Portfolio Managers (xiv) Associate Portfolio Managers providing discretionary portfolio management for managed accounts  Conduct and Practices Handbook Course, AND Canadian Investment Manager Designation or Chartered Investment Manager Designation  Two years of relevant investment management experience acceptable to the Corporation within three years before requesting approval

Corporation Investment Dealer and Partially Consolidated Rules Series 2000 | Dealer Member Organization and Individual Approval Rules Rule 2600 Approved Persons category Courses completed before approval Courses to be completed after approval Experience and other requirements Association in a similar capacity and dealing in futures within three years before requesting approval (xv) Portfolio Managers providing discretionary portfolio management for managed accounts  Conduct and Practices Handbook Course, AND Canadian Investment Manager Designation or Chartered Investment Manager Designation or CFA Charter administered by the CFA Institute AND If managing accounts in options:
 Both the Derivatives
Fundamentals Course and the Options Licensing Course or Derivatives Fundamentals and Options Licensing Course or New Entrants Course, if previously registered with the Financial Industry Regulatory Authority in a similar capacity and dealing in options within three years before requesting approval, and Securities Industry Essentials Examination and Series 7 Examination administered by the Financial Industry Regulatory Authority AND If managing accounts in futures contracts/futures contract options:
 Futures Licensing Course
AND
 Derivatives Fundamentals
Course
If Canadian Investment
Manager Designation or
Chartered Investment
Manager Designation is completed:
 at least four years of relevant investment management experience; one year of which was gained within the three years before requesting approval acceptable to the Corporation or If CFA Charter is completed, at least one year of relevant investment management experience within the three years before requesting approval acceptable to the Corporation

(xvii) Trader on the Montréal
Exchange
 Proficiency requirements determined to be acceptable by the Montréal Exchange

Supervisors – Retail or Institutional
(xviii) Supervisor of Registered
Representatives or
Investment
Representatives (other than supervising options or futures contracts and futures contract options)  Investment Dealer Supervisors Course AND  Canadian Securities Course or CFA Level I or any higher level of the CFA Program administered by the CFA Institute and  Conduct and Practices Handbook Course or New Entrants Course, if previously registered with a recognized foreign self‐ regulatory organization or an investment dealer within three years before requesting approval  Two years of relevant experience working for an investment dealer or Two years of relevant experience working for a Mutual Fund Dealer, portfolio manager or entity governed by a recognized foreign self‐regulatory organization or Such other equivalent experience acceptable to the Corporation (xix) Supervisor of Registered Representatives or  Options Supervisors Course, and  Two years of relevant experience working

Corporation Investment Dealer and Partially Consolidated Rules Series 2000 | Dealer Member Organization and Individual Approval Rules Rule 2600 Approved Persons category Courses completed before approval Courses to be completed after approval Experience and other requirements Investment Representatives dealing with clients in options Conduct and Practices Handbook Course AND  Both the Derivatives Fundamentals Course and the Options Licensing Course or Derivatives Fundamentals and Options Licensing Course, or New Entrants Course, if previously registered with the Financial Industry Regulatory Authority or an investment dealer and dealing in options within three years before requesting approval, and Securities Industry Essentials Examination and Series 7 Examination administered by the Financial Industry Regulatory Authority for an investment dealer or Two years of relevant experience working for an entity governed by a recognized foreign self‐regulatory organization or Such other equivalent experience acceptable to the Corporation (xx) Supervisor of Registered Representatives or Investment Representatives dealing with clients in futures contracts and futures contract options  Canadian Commodity Supervisors Exam and Futures Licensing Course and Conduct and Practices Handbook Course AND  Derivatives Fundamentals Course or Derivatives Fundamentals and Options Licensing Course or Series 3 Examination administered by the Financial Industry Regulatory Authority (on behalf of the National Futures Association), if previously registered with National Futures Association or an investment dealer and  Two years of relevant experience working for an investment dealer or Two years of relevant experience working for an entity governed by a recognized foreign self‐regulatory organization or Such other equivalent experience acceptable to the Corporation

Corporation Investment Dealer and Partially Consolidated Rules Series 2000 | Dealer Member Organization and Individual Approval Rules Rule 2600 Approved Persons category Courses completed before approval Courses to be completed after approval Experience and other requirements CFA Charter administered by the CFA Institute AND  If supervising accounts in options, the applicable proficiency requirements to trade and supervise options, as specified under clause 2602(3)(xix) AND  If supervising accounts in futures contracts/futures contract options, the applicable proficiencies to trade and supervise futures, as specified under clause 2602(3)(xx) at least four years of relevant investment management experience; one year of which was gained within the three years before requesting approval or If completed CFA Charter:
at least one year of relevant investment management experience within the three years before requesting approval (xxiv) Supervisor designated to be responsible for the supervision of options accounts  Options Supervisors Course, and Both the Derivatives Fundamentals Course and the Options Licensing Course or Derivatives Fundamentals and Options Licensing Course or New Entrants Course, if previously registered with the Financial Industry Regulatory Authority or an investment dealer and dealing in options within three years before requesting approval, and Securities Industry Essentials Examination and Series 7 Examination administered by the Financial Industry Regulatory Authority  Two years of relevant experience working for an investment dealer or Two years of relevant experience working for an entity governed by a recognized foreign self‐regulatory organization or Such other equivalent experience acceptable to the Corporation (xxv) Supervisor designated to be responsible for the supervision of futures contract/futures contract options accounts  Canadian Commodity Supervisors Exam and Futures Licensing Course, AND  Derivatives Fundamentals Course or  Two years of relevant experience working for an investment dealer or Two years of relevant supervisory or compliance

Corporation Investment Dealer and Partially Consolidated Rules Series 2000 | Dealer Member Organization and Individual Approval Rules Rule 2600 Approved Persons category Courses completed before approval Courses to be completed after approval Experience and other requirements Derivatives Fundamentals and Options Licensing Course or Series 3 Examination administered by the Financial Industry Regulatory Authority (on behalf of the National Futures Association) if previously registered with the National Futures Association or an investment dealer and dealing in futures within three years before requesting approval experience working for an entity governed by a recognized foreign self‐regulatory organization or Such other equivalent experience acceptable to the Corporation (xxvi) Supervisor designated to be responsible for the pre‐approval of advertising, sales literature and correspondence  Investment Dealer Supervisors Course  Two years of relevant experience working for an investment dealer or Two years of relevant experience working for an entity governed by a recognized foreign self‐regulatory organization or Such other equivalent experience acceptable to the Corporation (xxvii) Supervisor designated to be responsible for the supervision of research reports  Three levels of the CFA or CFA Charter administered by the CFA Institute or Other appropriate qualifications acceptable to the Corporation  Two years of relevant experience working for an investment dealer or Two years of relevant experience working for an entity governed by a recognized foreign self‐regulatory organization or Such other equivalent experience

(xxix) Director An industry Director must complete:
 Partners, Directors and
Senior Officers Course,
AND
 If seeking approval in a trading or advising category, the applicable proficiency requirements in that category, AND  If seeking approval as a Supervisor, the applicable proficiency requirements in that category A non‐industry Director that owns or controls a voting interest of 10% or more, directly or indirectly, must complete:
 The Partners, Directors and
Senior Officers Course

(xxx) Chief Financial Officer  Partners, Directors and Senior Officers Course and Chief Financial Officers Qualifying Examination AND  A financial accounting designation, finance related university degree or diploma or equivalent work experience as may be

2603. Permitted activities of mutual funds only Registered Representatives and Investment Representatives
(1) An applicant for approval, or an individual approved, as a Registered Representative dealing in mutual funds only, or an Investment Representative dealing in mutual funds only, will be also permitted to trade in exchange‐traded funds that meet the definition of a mutual fund provided the individual:
(i) was permitted to trade in exchange‐traded funds within the 90 days prior to these Rules coming into effect, or (ii) complies with the relevant proficiency requirements in clauses 2602(3)(vi), 2602(3)(vii) and 2602(3)(xiii), and has successfully completed one of the following within the timeline prescribed in subsection 2628(1):

Lineage: No known changes

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