Annual Risk Questionnaire

Overview

As mentioned in the CIRO Compliance Priorities Report for 2024, and as part of our goal of moving forward as one strong and integrated SRO, mutual fund dealers along with investment dealers, will soon be required to complete an Annual Risk Questionnaire (ARQ).

The ARQ was introduced in 2021 to investment dealers to create efficiencies and eliminate duplication of information requested by Business Conduct, Trading Conduct and Financial and Operations Compliance (the Compliance teams). The information requested is used:

• to assess the compliance risk of the firm
• as part of our regular examination planning process.

The ARQ seeks to capture material changes that have occurred at each firm in the past year including changes to business lines, governance, operational and supervisory controls relating to the financial and operations, business and trading conduct (where applicable) activities. CIRO may also use the ARQ as a tool to assess how our dealers have addressed new or recent amendments to CIRO and/or CSA rules and reforms.

The information requested will:

• enhance our risk-based approach by obtaining current and consistent information annually from each firm regardless of examination cycle
• streamline regulatory requests for information to firms and eliminate duplicative processes across the Compliance teams, and
• ensure greater consistency in risk assessments for all firms and across Compliance teams.

What’s new

We are introducing a new and enhanced ARQ application (“ARQ Portal”) for an improved user experience. For investment dealers, this will be a change in the way we deliver the questionnaire to you and the application you use to complete the questionnaire. This year, all investment and mutual fund dealers will receive a registration invitation to the new ARQ Portal and be able to:

• access the User Guide to navigate the ARQ Portal
• manage and add users
• complete the questionnaire
• retain a copy
• upload requested supporting documents directly onto the ARQ Portal.

What to expect – general process

In October 2024, Dealer Members will receive an email invitation with instructions on how to access the ARQ Portal. A link to the ARQ Portal will also be sent annually thereafter. Dealer Members will be:

• asked to answer a series of questions and submit requested supporting documents (e.g. CCO Report to the Board, corporate structure (ownership) chart, etc.)
• given one month to complete the ARQ
• required to certify that the UDP has reviewed the information in the ARQ to ensure it is complete and accurate before submitting it to CIRO.

We will review the submitted ARQ responses and if we require additional information or clarification on any responses, the applicable Compliance Manager will contact the firm. The responses to the ARQ will be used in the firm’s risk assessment as at December 31^st.

Questions?

If you have any questions, please send an email to [email protected].