Proposed Clarifying Amendments to Registration and Proficiency Requirements

1. Background

Following the implementation of the IIROC Rules on December 31, 2021 and the implementation of the successor IDPC Rules on January 1, 2023, we identified several areas where requirements related to registration and proficiency needed refinement, clarification or correction.1The Proposed Amendments are not intended to impose any operational costs on Investment Dealer Members (Dealers). Rather, the Proposed Amendments should improve the clarity of the registration and proficiency requirements and align these requirements with their intended interpretation and purpose.

We are publishing the Proposed Amendments for comment to clarify differing views on the interpretation of the requirements impacted by the Proposed Amendments.

2. Proposed Amendments

In this section, we describe the three major areas of change reflected in the Proposed Amendments:

• refining amendments to proficiency requirements set out in Rule 2600,
• clarifying amendments, and
• correcting amendments.

The text of the Proposed Amendments is set out in Attachment 1 and a blackline of the changes is set out in Attachment 2. Additionally, a summary table of the Proposed Amendments by IDPC rule reference is set out in Attachment 3.

2.1 Refining amendments to proficiency requirements in Rule 2600

We made specific changes to the proficiency requirements in Rule 2600, as described below and summarized in Attachment 3.

1. Changed definition of “recognized foreign self-regulatory organization” to “recognized foreign regulatory organization”. We have proposed amending this defined term to more accurately reflect the self-regulatory organizations and statutory regulators that offer reciprocal treatment to Canadian applicants that are recognized by CIRO.2
2. Recognized supervisory experience at a Mutual Fund Dealer Member or portfolio manager. This proposal affects the experience requirements for the categories of Supervisors described in clauses 2602(3)(xix) through 2602(3)(xxvi).

3. Aligned the requirements for Supervisors of managed accounts with requirements of other Supervisors. We have aligned the experience requirements for a Supervisor designated to be responsible for the supervision of managed accounts in sub-clauses 2602(3)(xxiii)(e) through 2602(3)(xxiii)(g) with the experience requirements of other Supervisors in subsection 2602(3) by:

   • introducing the requirement to complete the Investment Dealer Supervisor Course as part of the education requirements, and
   • omitting the requirement to have the same Relevant Investment Management Experience as portfolio managers.

   This aligns with our original intention with the implementation of the IIROC Rules.

4. Expanded acceptable qualifications and experience for Supervisors of research reports in sub-clause 2602(3)(xxvii)(a). We have broadened the acceptable qualifications and experience in this category in response to feedback that the education and experience requirements were too restrictive. This position was previously described in guidance only.3
5. Accepted longer transition period of advising representative or associate advising representative in subsection 2630(1). We have proposed changes to permit an individual registered as an advising representative or associate advising representative by a securities regulatory authority registered within the last 90 days, rather than within the last two weeks, to take up to three months to complete the Conduct and Practices Handbook Course. This makes the transition period consistent with the reinstatement period and reflects a more realistic period for the transition of these individuals.

2.2 Clarifying Amendments

We have proposed clarifying amendments throughout the IDPC Rules relating to registration and proficiency. These changes are intended to improve the understanding of the requirements. The proposed clarifying amendments fall into the following categories:

• adding sub-numbering and conjunctions to the tables in Rule 26004to improve pinpoint referencing and to clarify requirements that are meant to be combined or applied as alternatives,
• refining the description of requirements to more accurately reflect the current application of proficiency requirements, and
• eliminating ambiguous or redundant language, such as the repeitive re-statement of baseline proficiency requirements for certain categories of Approved Persons or the inclusion of six months supervisory reporting in Rule 2600 (which is an obligation of the Dealer, rather than an individual seeking approval).

These amendments are listed by IDPC rule reference and described in Attachment 3.

2.3 Correcting Amendments

We have proposed the following correcting amendments that we identified following implementation of the IIROC Rules and its successor, the IDPC Rules. These changes include the following:

• updating cross-references,
• revising outdated language and terminology carried over from the Dealer Member Rules, and
• italicizing defined terms.

3. Impacts of the Proposed Amendments

We do not believe that the Proposed Amendments will have a material impact on investors, the capital market structure, competition generally, the cost of compliance, constraints on innovation or conformity with other rules. No regional effects have been identified.

3.1 Economic Impact Assessment

We need to consider undertaking an economic impact assessment of the anticipated costs and benefits of our rule proposals as part of our regulatory process. We determined it was not necessary to perform an economic impact assessment of the Proposed Amendments as the they are not intended to have any operational impact on Dealers.

3.2 Impact of other policy projects

The Proposed Amendments overlap with sections considered for amendment as part of the Proposed Derivatives Rule Modernization, Stage 1 project (the Derivatives Modernization Project).5The most significant area of overlap is the table in subsection 2602(3). We anticipate the Proposed Amendments will be finalized prior to the completion of the Derivatives Modernization Project. However, whichever set of amendments is finalized first will be reflected in subsequent proposed amendments to the overlapping sections of the IDPC Rules.

4. Implementation

If approved, the Proposed Amendments would be effective at least three months after approval from our Recognizing Regulators.

5. Questions

While comment is requested on all aspects of the Proposed Amendments, comment is specifically requested in identifying any areas where the Proposed Amendments inadvertently result in operational costs to Dealers and a description of those operational costs.

6. Policy development process

6.1 Regulatory purpose

The Proposed Amendments would improve the clarity relating to registration and proficiency requirements set out in the IDPC Rules, thus ensuring compliance with securities laws.

6.2 Regulatory process

The Board of Directors of CIRO (Board) has determined the Proposed Amendments to be in the public interest and approved them for public comment on June 28, 2023.

The following advisory committees of CIRO’s predecessor organization, IIROC, considered this matter:

• Proficiency Committee,
• CCLS Institutional Subcommittee, and
• CCLS Retail Subcommittee.

We took the public interest into account when developing the Proposed Amendments through these consultations. After considering the comments on the Proposed Amendments received in response to this Request for Comments together with any comments of the Recognizing Regulator, CIRO staff may recommend revisions to the Proposed Amendments. If the revisions and comments received are not material in nature, the Board has authorized the President to approve the revisions on CIRO’s behalf and the revised Proposed Amendments will be subject to approval by the Recognizing Regulators. If the revisions or comments are material, CIRO staff will submit the Proposed Amendments, including any revisions, to the Board for approval for republication or implementation, as applicable.

7. Attachments

Attachment 1 - Proposed Amendments to IDPC Rules (Clean)

Attachment 2 - Proposed Amendments to IDPC Rules (Blackline)

Attachment 3 - Summary Table of Proposed Amendments by IDPC Rule Reference

Attachment 1 – Proposed Amendments to IDPC Rules (Clean)

SERIES 1000 | INTERPRETATION AND PRINCIPLES RULES

RULE 1200 | DEFINITIONS

1201. Definitions

…

2. The following terms have the meanings set out when used in the Corporation requirements:

   …

   “designated Supervisor”	A Supervisor that the Dealer Member makes responsible for a supervisory role defined in the Corporation requirements, including a Supervisor responsible for: the supervision of futures contracts and futures contract options trading accounts under Part F of Rule 3900, the supervision of options trading accounts under Part F of Rule 3900, the supervision of discretionary accounts under Part G of Rule 3900, the opening of new accounts and the supervision of account activity under Part B of Rule 3900, the supervision of managed accounts under Part G of Rule 3900, the pre-approval of advertising, sales literature and correspondence under Part A of Rule 3600, and the supervision of research reports under Part B of Rule 3600.
   ..
   “recognized foreign regulatory organization”	A foreign regulatory organization, including a foreign self-regulatory organization, which offers reciprocal treatment to Canadian applicants and which has been recognized by the Corporation as such.

…

SERIES 2000 | DEALER MEMBER ORGANIZATION AND INDIVIDUAL APPROVAL RULES

…

RULE 2500 | DEALER MEMBER DIRECTORS AND EXECUTIVES, AND APPROVAL OF INDIVIDUALS

2501. Introduction

1. Rule 2500 sets out requirements for a Dealer Member’s Approved Persons.

…

PART A - DEALER MEMBER DIRECTORS AND EXECUTIVES

2502. General requirements for Directors

...

2. At least 40% of the Dealer Member’s Directors must:
   1. either:
      1. 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
      2. 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,
   2. satisfy the applicable proficiency requirements of clause 2602(3)(xxix), and
   3. have at least five years of experience in the financial services industry, or such lesser period as may be acceptable to the Corporation.

...

2503. General requirements for Executives

1. A Dealer Member’s Executives must: 
   
   …
   2. satisfy the applicable proficiency requirements of clause 2602(3)(xxviii).
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 lesser 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 considers appropriate.

2505. Chief Financial Officer

1. A Dealer Member must designate a Chief Financial Officer who must:
   1. be designated as an Executive and meet the general requirements for Executives set out in section 2503, and
   2. satisfy the applicable proficiency requirements of clause 2602(3)(xxx).

...

4. When an acting Chief Financial Officer is designated:
   1. that individual must satisfy the applicable proficiency requirements of clause 2602(3)(xxx) and be designated as Chief Financial Officer, or
5. ...

...

2506. Chief Compliance Officer

1. A Dealer Member must designate a Chief Compliance Officer who must:
   1. be designated as an Executive and meet the general requirements for Executives set out in section 2503, and
   2. satisfy the applicable proficiency requirements of clause 2602(3)(xxxi).

...

5. When an acting Chief Compliance Officer is designated:

   1. the individual must satisfy the applicable proficiency requirements of clause 2602(3)(xxxi) and be designated as Chief Compliance Officer, or

      …

...

2507. Ultimate Designated Person

...

2. The Ultimate Designated Person must be:

   1. the chief executive officer of the Dealer Member or, an Executive acting in a capacity similar to a chief executive officer, provided it is acceptable to the Corporation, and applicable relief is granted under the applicable National Instrument,

      ...

...

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 Executive to act as its Ultimate Designated Person or if unable to do so, promptly notify the Corporation of its plan to designate another qualified Executive as its Ultimate Designated Person.

…

PART B - APPROVAL OF INDIVIDUALS

...

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:
   1. the Dealer Member is registered (or exempt from such registration) 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,

   2. the individual, if required to do so under securities laws, is registered (or exempt from such registration) 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

      ...

...

6. If an Approved Person ceases to be approved, the former Approved Person must immediately cease any activity requiring Corporation approval.

…

2552. Compliance with the proficiency requirements or other conditions

1. Each Approved Person must:
   1. meet the applicable proficiency requirements set out in Rule 2600 before Corporation approval is granted, and
   2. complete the applicable post-approval proficiency requirements of subsection 2602(3) after receiving Corporation approval.
2. The Corporation will automatically suspend an Approved Person if they do not complete the applicable post-approval proficiency requirements in the Approved Persons category as set out in Rule 2600.
3. The Corporation will reinstate an Approved Person once they have completed the required post-approval proficiency requirements and the Corporation has been notified.

...

2553. Approval of Registered Representatives, Investment Representatives, Portfolio Managers and Associate Portfolio Managers and their obligations

…

2. An Associate Portfolio Manager must not advise on securities unless, before giving the advice, the advice has been pre-approved by the Portfolio Manager.
3. 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(3)(iv) and deal with a type of customer as set out in clauses 2553(3)(i) and (ii), unless the Dealer Member complies with the following:

...

4. An individual applying for approval as a Registered Representative or Investment Representative dealing in mutual funds only must comply with the applicable proficiency requirements in clauses 2602(3)(vi), 2602(3)(vii) or 2602(3)(xiii).
5. The post-approval proficiency requirements in clauses 2602(3)(vi) or 2602(3)(xiii) do not apply to a Registered Representative or Investment Representative 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. The approval of an individual qualified to deal in mutual funds only is automatically suspended if the individual fails to satisfy the post-approval requirements in clauses 2602(3)(vi) or 2602(3)(xiii) in accordance with subsections 2552(2) and 2552(3).

...

2555. Approval of investors

...

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)(xxxii).
3. Any individual, other than a Dealer Member’s Director, who:
   1. is actively engaged in the business of the Dealer Member, and

   2. 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)(xxxii) applicable to approved investors.

…

RULE 2600 | PROFICIENCY REQUIREMENTS AND EXEMPTIONS FROM PROFICIENCIES

…

PART A - PROFICIENCY REQUIREMENTS

2602. Proficiency requirements for Approved Persons and approved investors

...

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 provided in accordance with section 1407, 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 Representative and Investment Representative

   …

   Investment Representative dealing in futures contracts and futures contract options with retail or institutional clients

   …

   Associate Portfolio Manager and Portfolio Manager

   Associate Portfolio Manager providing discretionary portfolio management for managed accounts

   Portfolio Manager providing discretionary portfolio management for managed accounts

   Designated Supervisor

   …

   Supervisor designated to be responsible for the supervision of futures contract and futures contract options accounts

   …

PART B - EXEMPTIONS FROM PROFICIENCY REQUIREMENTS

2625. Specific exemptions

...

1. A Chief Compliance Officer seeking approval as a Supervisor of a producing Supervisor is exempt from the proficiencies required under 2602(3)(xviii) for the purposes of being approved in this capacity, if the producing Supervisor is an Approved Person who is:
   1. a Supervisor of a Registered Representative or Investment Representative and
   2. actively engaged as a Registered Representative dealing with retail clients.

2. An applicant seeking approval as a Supervisor in relation to activities of individuals approved to deal in mutual funds only, including those in subsections 2603(1) and 2603(2), is exempt from the pre-approval course requirements in clauses 2602(3)(xviii) and 2602(3)(xxi) provided the individual:

   ...

3. With the exception of individuals who were required to transition to the Portfolio Manager and Associate Portfolio Manager approval categories, individuals approved prior to December 31, 2021 are exempt from any new proficiency requirements introduced as at December 31, 2021 in subsection 2602(3), provided the Approved Person continues in the same role.

2626. General and discretionary exemptions

1. The Corporation may exempt any person or class of persons from any proficiency requirement, in whole or in part, if the applicant demonstrates acceptable alternative experience, and/or successful completion of alternative courses or examinations to the Corporation.
2. This exemption may be subject to any terms and conditions the Corporation considers appropriate.

...

2627. Exemptions from completing the required courses

1. As set out in the table below, an applicant or Approved Person is exempt from completing a required course if the applicant meets the applicable exemption criteria.

   Required course	Course required for exemption	Exemption criteria
   (i)(a) 90-day Training Program	none	Request approval within three years of being approved or registered in a capacity allowing trading of, or advising in, securities for retail clients either: by a recognized foreign regulatory organization, or as an advising representative or associate advising representative by a Canadian securities regulatory authority
   (ii)(a) 30-day Training Program	none	Request approval within three years of being approved or registered in a capacity allowing trading of, or advising in, securities for retail clients either: by a recognized foreign regulatory organization, or as an advising representative or associate advising representative by a Canadian securities regulatory authority

2628. Course validity and exemptions from rewriting or repeating courses

...

2. An applicant for approval must rewrite or repeat a course if the applicant has not been approved in a category listed in subsection 2602(3) or registered by a Canadian securities regulatory authority in a similar category requiring the course within the last three years.
3. The courses and examinations listed in Rule 2600 includes every prior and successor course or examination, provided that they do not have a significantly reduced scope and content, as determined by the Corporation.
4. For the purposes of determining course validity, an Approved Person is not considered to have been approved during any period in which the Approved Person’s approval was suspended or the individual was otherwise not conducting any activities requiring Corporation approval on behalf of the Dealer Member.

...

6. An individual is exempt from rewriting or repeating the courses as set out in the table below if the individual has met the current status criteria and exemption criteria.

   Course	Individual’s current status	Exemption criteria
   (i)(a) Partners, Directors and Senior Officers Course	has previously been approved as an officer (prior to September 28, 2009) and surrendered registration with the introduction of the Corporation approval category of Executive	applicant for approval who has maintained continuous employment with a Dealer Member in a senior capacity and remained in the corporate registry of a Dealer Member as an officer since September 28, 2009
   (ii)(a) Chief Financial Officers  Qualifying Examination	has never been approved as a Chief Financial Officer	applicant for approval has demonstrated to the Corporation’s satisfaction that the applicant has been working closely with and assisting the Chief Financial Officer since the completion of the Chief Financial Officers Qualifying Examination
   (iii)(a) Derivatives Fundamentals  Course	an applicant for approval or Approved Person who will be dealing with clients in futures contracts, or futures contract options or supervising Approved Persons who deal with such clients	applicant seeking approval or filing a notice within three years of passing the Futures Licensing Course or the Canadian Commodity Supervisors Exam
   (iv)(a) Derivatives Fundamentals  Course	an applicant for approval or an Approved Person dealing with clients, in options, or supervising Approved Persons who deal with such clients	applicant seeking approval or filing a notice within three years of completing the Options Licensing Course or the Options Supervisors Course
   (v)(a) Derivatives Fundamentals and Options Licensing Course	an applicant for approval or an Approved Person dealing with clients, in options, or supervising Approved Persons who deal with such clients	applicant seeking approval or filing a notice within three years of completing the Options Licensing Course
   (vi)(a) Wealth Management Essentials  Course	an applicant for approval or Approved Person who will be dealing with retail clients in securities	applicant seeking approval or filing a notice within three years of completing all three levels of the CFA Program or the CFA Charter administered by the CFA Institute which continues to be in good standing
   (vii)(a) 90-day Training Program	an applicant for approval or Approved Person	applicant seeking approval or filing a notice within three years of being approved or registered in a capacity allowing trading of, or advising in, securities for retail clients either: by a recognized foreign regulatory organization, or as an advising representative or associate advising representative by a securities regulatory authority
   (viii)(a) 30-day Training Program	an applicant for approval or Approved Person	applicant seeking approval or filing a notice within three years of being approved or registered in a capacity allowing trading of, or advising in, securities for retail clients either: by a recognized foreign regulatory organization, or as an advising representative or associate advising representative by a securities regulatory authority

…

2630. Transition of Advising Representatives and Associate Advising Representatives into the Portfolio Manager and Associate Portfolio Manager approval category

1. An individual registered as an advising representative or associate advising representative by a securities regulatory authority within the 90 days prior to the date of application as a Portfolio Manager or Associate Portfolio Manager has three months after the date of approval by the Corporation to complete the Conduct and Practices Handbook Course.

   …

…

RULE 2700 | CONTINUING EDUCATION REQUIREMENTS FOR APPROVED PERSONS

PART A - THE CONTINUING EDUCATION PROGRAM AND CONTINUING EDUCATION REQUIREMENTS

2703. The continuing education program

1. The continuing education program consists of two parts:
   1. a compliance course requirement, which is training covering ethical issues, regulatory developments and rules governing investment dealer conduct, and
   2. a professional development course requirement, which is training that fosters learning and development in areas relevant to investment dealer business.

...

5. A continuing education participant is exempt from the professional development course requirement if he or she:
   1. is approved in the category of Registered Representative, Associate Portfolio Manager, Portfolio Manager or Supervisor, and
   2. has been continuously approved in a retail trading capacity since January 1, 1990 or earlier by either the Corporation, the Toronto Stock Exchange, the Montreal Exchange, or the TSX Venture Exchange including any of their predecessors.
6. A continuing education participant cannot receive continuing education credits for the same continuing education course unless the course has been updated to contain new course content, with the exception of Corporation accredited ethics courses referred to in subsection 2715(3).

2704. Continuing education requirements

1. In each continuing education program cycle, a continuing education participant must meet the continuing education requirements for the applicable Approved Person category, regardless of product type, as set out in the following table.

   Approved Person Category	Client Type	Compliance course requirement	Professional development requirement
   …
   Supervisor designated to be responsible for the supervision of futures contract and futures contract options accounts	retail client or institutional client	Yes	No
   …
   Supervisor designated to be responsible for the opening of new accounts and account supervision and activity related policies and procedures	retail client or institutional client	Yes	No
   …

…

4. All continuing education participants must complete at least 10 hours of compliance courses in each continuing education program cycle in accordance with requirements in section 2715.
5. A continuing education participant that is subject to professional development requirements must complete at least 20 hours of professional development courses in each continuing education program cycle in accordance with requirements in section 2716.

…

PART B – CONTINUING EDUCATION PROGRAM COURSES AND ADMINISTRATION

2715. The compliance course

...

3. The Corporation will accredit ethics courses that a continuing education participant can repeat and count towards fulfillment of the compliance course requirement in two continuing education program cycles.

2716. The professional development course

1. A continuing education participant subject to the professional development requirement:
   1. may, upon satisfying professional development requirements in the current cycle, carry forward a maximum of 10 hours of a single professional development course of at least 20 hours and completed in the last six months of the current continuing education program cycle to satisfy a portion of his or her professional development course requirement in the following continuing education program cycle,
   2. may receive continuing education credit for successful completion of the Wealth Management Essentials Course, where completed to satisfy the post-approval proficiency requirement for Registered Representatives dealing with retail clients, in the continuing education program cycle in which the course is completed, and

...

2717. Dealer Member’s administration of the continuing education program

1. A Dealer Member must:
   1. verify the continuing education participant’s compliance with the requirements at the end of the continuing education program cycle,
   2. keep evidence of a continuing education participant’s completion of the continuing education course, which may be a certificate issued by the course provider, an attendance sheet, or bulk notice of completion,
   3. keep continuing education program records, including course related materials, for each continuing education program cycle for a minimum of seven years following the end of the continuing education program cycle,
   4. designate an individual responsible for supervising training and approving a continuing education participant’s chosen continuing education course,
   5. ensure that a continuing education participant’s chosen continuing education course satisfies the content criteria described in subsection 2703(1),
   6. where the continuing education course is delivered by the Dealer Member, evaluate a continuing education participant’s knowledge and understanding of the course,
   7. ensure that each continuing education participant meets the continuing education requirements during each continuing education program cycle, and

   8. update the continuing education reporting system and notify the Corporation within 10 business days after the end of the continuing education program cycle of all continuing education participants that have met their continuing education requirements within the prescribed cycle.

      ...

…

PART C – PARTICIPATION IN THE CONTINUING EDUCATION PROGRAM

2725. Participation of recently Approved Persons

1. An individual enters the continuing education program cycle upon initial approval in an Approved Person category listed in subsection 2704(1).
2. Notwithstanding subsection 2725(1), an individual that receives initial approval in an Approved Person category listed in subsection 2704(1) during the last six months of the current continuing education program cycle will become subject to the applicable continuing education requirements starting at the beginning of the next continuing education program cycle.

…

PART D - CHANGES DURING A CONTINUING EDUCATION PROGRAM CYCLE

2735. Changes to Approved Persons category during a continuing education program cycle

...

3. A continuing education participant may not change to an Approved Person category with less onerous continuing education requirements to avoid completing the more onerous continuing education requirements of a former Approved Person category, or penalties for non-completion of continuing education requirements. Any change to the Approved Person category during the last six months of the continuing education program cycle which results in less onerous continuing education requirements must be accompanied by an explanation from the sponsoring Dealer Member to satisfy the Corporation that the category change is not an avoidance measure.

…

PART F - PENALTIES APPLICABLE TO THE CONTINUING EDUCATION REQUIREMENTS FOR APPROVED PERSONS

2755. Penalties for late filing or not completing continuing education requirements in a continuing education program cycle

1. On the last business day of the first month of a continuing education program cycle, the Corporation will automatically suspend the approval of the continuing education participant if:

   1. a continuing education participant fails to complete the continuing education requirements for the previous continuing education program cycle within the prescribed cycle, or

      …

   …

…

RULE 3900 | SUPERVISION

…

PART C – SUPERVISION OF RETAIL CLIENT ACCOUNTS

…

3947. Supervision of new Registered Representatives and Investment Representatives

…

2. Subsection 3947(1) does not apply if:
   1. the Registered Representative was previously approved, for six months or more, to advise on trades for retail clients for a securities firm that is a member of a SRO or a recognized foreign regulatory organization, or

   2. the Investment Representative was previously approved for six months or more to advise on trades or to trade for retail clients for a securities firm that is a member of a SRO or a recognized foreign regulatory organization.

      …

…

Attachment 3 – Summary Table of Proposed Amendments by IDPC Rule Reference

• 1The Proposed Amendments affect Rules 1200, 2500, 2600, 2700 and 3900.
• 2Currently, CIRO recognizes the U.S. Financial Industry Regulatory Authority, the U.K. Financial Conduct Authority and the Hong Kong Securities and Futures Commission.
• 3See GN-2600-21-001 at footnote 11.
• 4Specifically subsections 2602(3), 2627(1) and 2628(6).
• 5See Notice 22-0055.