Effective Date: December 31, 2021

1. Purpose and scope

IIROC Rule 4300 Part C1 and the Notes to Statement D (Statement of Free Credit Segregation Amount) of Form 1 set out the client free credit segregation requirements. Specifically, section 4384 requires Dealer Members (Dealers) to hold excess free credit balances “in cash segregated in trust for clients in a separate account or accounts with an acceptable institution and this trust property must be clearly identified as such at the acceptable institution”.

This Guidance sets out IIROC ’s views on acceptable practices for the account agreement governing a separate account(s) referred to in section 4384 between an acceptable institution and a Dealer.

1. Account agreement

2. The account agreement should provide:

   1. the account name and account number of each account used for this purpose,
   2. that each account is designated as a trust account on the acceptable institution’s internal systems,
   3. that funds held in the account are protected from shortfalls in any other accounts and are held in segregation from all operating funds of the Dealer,
   4. that, except for normal bank fees incurred in respect of the account, the acceptable institution will not assert any claim, set-off, right of combination, lien or encumbrance of any kind against the held funds, and
   5.  the signatures of both the Dealer and acceptable institution entering into the agreement.

3. Applicable rules

IIROC Rules this Guidance Note relates to:

• section 4384, and
• Notes to Statement D of Form 1.

1. Previous Guidance Note

This Guidance Note replaces Notice 19-0213 – Cash Segregated in Trust for Clients with an Acceptable Institution.

1. Related documents

This Guidance Note was published under Notice 21-0190 - IIROC Rules, Form 1 and Guidance.

• 1In this guidance, all rule references are to the IIROC Rules unless otherwise specified