Guidance for Firm Applications

1. Minimum Requirements for Accepting an Application

An Application is considered incomplete and will not be accepted for review if the submission is missing any of the following:

1.1 Application Form

for new firm applicants, a completed CIRO Membership Application and Form 33-109F6 (“F6”)
for current Members, a completed Notice of Material Business Change or equally robust written notice containing sufficient information and materials for CIRO to commence a meaningful review of the Application, and Form 33-109F5 (“F5”), as applicable

1.2 Audited Form 1

a complete, audited Form 1 prepared by the panel auditor within the last 90 days of the application date, showing that the firm meets CIRO's capital requirements, including maintaining a positive Risk Adjusted Capital amount

1.3 Qualified UDP & CCO

individual(s) who already meet the applicable proficiency and experience requirements of the firm's UDP and CCO, or are committed to meeting those requirements within 60 days of the Application date

1.4 Policies & Procedures Manual(s)

written policies & procedures for the firm's business activities, operations and supervision

1.5 Business Plan with supporting Financial Projections

the firm's 5-year Business Plan that includes, at a minimum:
- a detailed description of the firm's business model and proposed business activities, including the products & services it intends to offer
- a description of the firm's targeted client base and its business strategy for building its business
- financial projections and their underlying assumptions to show how the firm's business plan affects Risk Adjusted Capital and Early Warning Reserve
- a description of the firm's commercial relationships with service providers

2. Material Deficiencies

An Application is considered to have material deficiencies if any of the items listed in 2.1 to 2.10 below are identified and are applicable to the nature of the Application. While CIRO staff are prepared to extend flexibility regarding the acceptance of the Application for review, proceeding with an Application that has material deficiencies will run the risk of extending the review timeframe. A staggered submission of key information and materials creates inefficiencies and often requires CIRO staff to re-review parts of the firm's Application and potentially revise their initial assessment, which adds to the time and resources required for CIRO's review.

In accordance with CIRO's Integrated Fee Model, if the Application remains under compliance review for more than 6 months, CIRO may seek reimbursement for the additional costs. This reimbursement is in addition to the required fee for the Application. Refer to the Fee Model for full details on the applicable fees.

CIRO staff will encourage the firm to consider prioritizing resolution of the identified deficiencies before moving forward with the Application. If the firm still wishes to proceed with the Application, the firm will be asked to:

complete an acknowledgement that the firm (i) wishes to proceed with the Application for which CIRO staff have identified material deficiencies and informed the firm of those deficiencies; and (ii) understands the potential impact of proceeding with a deficient Application, which includes CIRO seeking reimbursement for additional costs and expenses in accordance with CIRO's Fee Model; and
provide an undertaking that the firm will resolve the material deficiencies by a stated date (for each deficiency), which must be within 90 days of the undertaking unless otherwise agreed to by CIRO staff.

2.1 Adherence to Response Deadlines

The firm is not providing substantially complete and accurate responses or requested materials within the deadlines set by CIRO staff during the course of the review.

2.2 Incomplete Business Plan

The firm's 5-year business plan is missing key information or supporting materials. For example:
- key components of the firm's business model have not yet been decided or finalized by the firm
- key components of the firm's systems, controls, and other required infrastructure, have not been fully developed
- the financial projections lack sufficient detail to show how they affect Risk Adjusted Capital and Early Warning Reserve and/or do not clearly explain the underlying assumptions

2.3 Early Warning Test

The firm's Audited Form 1 or financial projections indicate that the firm is reasonably expected to trigger an early warning during the first year of membership or following the proposed business change.

2.4 Lack of Qualified CFO, Supervisor, or Dealing Representative

The firm has not filled one or more of these key positions with individuals who have met all regulatory obligations, or there are concerns identified regarding their fitness for registration or approval.

2.5 Missing an Auditor Comfort Letter

The firm has not provided a Report on Accountants' Procedures & Findings for its systems of books & records.

2.6 Missing Dealer Agreements

The firm has not provided draft versions of Agreements with its intended Service Providers (e.g., outsourcing, carrying broker, custodian, shared service, etc.).

2.7 Insufficient Policies & Procedures

Material deficiencies have been identified in the firm's written policies & procedures.

2.8 Missing or Insufficient Client Reporting or Client Disclosure Documents

The firm has not provided samples of its intended client reporting or client disclosure documents, or the samples provided are wholly non-compliant with CIRO requirements.

2.9 Missing or Insufficient Supervision Framework

The firm has not provided sufficient information about its intended supervisory framework.

2.10 Missing processes for collecting Know-Your-Client Information

The firm has not provided sufficient information about its processes for collecting Know-Your-Client information.

3. “Non-Routine” Applications

An Application is considered “non-routine” if it involves any of the following:

3.1 Novel or Significant Issues

a "novel or significant issue" as defined in the CSA’s relevant registration delegation order(s) or assignment order(s)

3.2 High-Risk or Complex Applications

Applications that are generally assessed as higher-risk or complex due to nature of the proposed business model, activities, products, services, business or operational structure, organizational structure, or impact on multiple entities or business lines
Applications that require material review or approval by another regulator (e.g., CSA, CIPF, FINRA)
Applications that raise new policy issues or require policy interpretation, consideration or consultation

3.3 Exemptive Relief

new or existing exemptive relief from CIRO rules or securities legislation

3.4 New Technology Platform or Process Automation

a new technology platform or back-office system, or one that has not been used by a Dealer Member in the same or substantially similar capacity or for the same purpose that is being proposed
Applications that propose new/novel uses of technology as a replacement for Approved Persons (including Supervisors) under CIRO rules

3.5 New or Significantly Revised Supervisory Infrastructure

a new supervisory infrastructure for the Dealer Member, or a material change to the existing manner by which the Dealer Member currently supervises its activity

Note: “Application” refers to a new firm application (i.e. application for CIRO Membership and Firm Registration) or notice of a material change in business activities.