Investor Alert:
CIRO is issuing a warning to Canadian investors regarding Canada Token Trade.
Effective Date: December 31, 2021
IIROC Rules outline our proficiency requirements. Under certain circumstances, IIROC may grant a discretionary exemption1 from these requirements.
This Guidance Note explains the following:
An exemption from a proficiency requirement excuses an individual from completing a mandatory licensing course or fulfilling an experience requirement.
IIROC is of the view that high proficiency standards play a key role in investor protection and the integrity and efficiency of capital markets. We are committed to high standards of proficiency, professionalism and ethics.
If an individual applies for an exemption from an education component of the proficiency requirements, with the exception of circumstances discussed in section 1.4, the individual must demonstrate that he or she has gained the competencies and knowledge covered in the proficiency course from other courses and/or experience.
If an individual applies for an exemption from an experience component of the proficiency requirements, the individual must demonstrate that the alternative experience is at least equivalent to and for a greater length of time than, the experience required under IIROC Rules.
Generally, experience may compensate for a lack of education but education may not offset a lack of experience.
An individual may apply to IIROC for a discretionary exemption by filing an “Apply for Exemption” submission and paying the relevant fee through the National Registration Database (NRD).
The application needs to include information and details of the following, in order for IIROC to review the request and determine whether they can support the exemption:
The information provided in the submission should clearly demonstrate how:
Once IIROC reviews the information submitted, we may also request additional supporting documents such as the following:
Dealers should keep in mind that if a course has gone through significant change since the individual wrote it initially, it might be more appropriate to rewrite the course. Furthermore, in many cases, the Dealer and individual may find it beneficial, in terms of timing, to have the individual write or rewrite a required course.
Once the Dealer has provided all required information and Staff have completed their review, Staff would forward the request, their recommendation, and relevant supporting documents to the decision maker for a decision.3
Generally, exemption requests from writing or rewriting a course should include a comparative analysis of the individual’s education and experience against the course requested for an exemption.
The decision maker cannot approve an application where the Dealer simply provides a list of courses the individual has taken, a resume, or standard job description without providing analysis as to how the individual’s courses or experiences specifically relate to the topics covered in the required course. It is important to provide a detailed comparative analysis including:
The comparative discussion and analysis against the topics covered in the required course could be in the form of:
There are special situations when a comparative analysis may not be required. An individual who has extensive experience in the securities industry with another Canadian or equivalent foreign dealer in a comparable role, to what the individual is applying for, would not need to provide a comparative analysis. Other circumstances may be a result of changes in policy or upcoming rules. Below is an example of when a comparative analysis is not required.
Chief Compliance Officers are required to complete the Chief Compliance Officers Qualifying Examination (CCO) course and the Partners, Directors and Senior Officers (PDO) course. An individual with extensive experience as a Chief Compliance Officer in the securities industry with another Canadian or equivalent foreign dealer, who applies for an exemption from the CCO course, would not need to provide a comparative analysis. The individual and Dealer should include details of the individual’s experience, duties, and responsibilities in the previous CCO role(s) and provide information on any relevant training, courses, seminars, and industry events that the individual completed/attended in the past few years.
IIROC reviews each exemption application on a case-by-case basis, taking into consideration the information provided in the submission. An exemption application is deficient if additional information is still required from the Dealer or individual. IIROC Staff will contact the Dealer’s Authorized Firm Representative (AFR) with a request for any missing information.
It is the responsibility of the AFR to obtain this information from the Dealer and/or individual in a timely manner.
In order to avoid stale dated information, requests for any missing information will include a due date, typically four weeks. IIROC expects responses from the Dealer by this due date and absent reasonable grounds, IIROC will abandon any reviews that are still deficient or outstanding past this date. After this time, the individual or Dealer will be required to file a new submission on NRD and pay the requisite fee to pursue the exemption.
Some of the proficiency requirements provide an alternative to satisfying the experience requirements. For example, the experience requirement for Supervisors of Approved Persons dealing with retail clients are as follows:
Two years of relevant experience working for a Dealer Member or such equivalent experience as may be acceptable to the District Council.
If the Dealer would like IIROC to consider the alternative experience as equivalent, then the Dealer needs to provide information and analysis on why or how the experience is equivalent as part of the application for registration submission. In these cases, a separate exemption application is not required. Staff would forward the request from the registration submission to the decision maker, with Staff’s recommendation, to decide on whether the experience is acceptable.
However, if in the above example, the individual wishes to be exempt from the two years of relevant experience generally, then an exemption request is required and the Dealer should follow the normal process of applying for a discretionary exemption.
IIROC Staff endeavour to complete the review of an exemption application on a timely basis. As each application is unique to the individual’s fact situation, the review time may vary with each application and may take more time in the event of the following:
A course that has expired recently versus one that has expired over 10 years ago is still an expired course under IIROC Rules. IIROC Registration Staff do not have the discretion to waive or reduce the filing requirements for recently expired courses.
IIROC has arranged a 50% enrolment price discount for eligible individuals rewriting courses within 10 years of previously writing a required course through the Canadian Securities Institute. For more information, please visit CSI’s applicable course enrolment page.
IIROC Rules this Guidance Note relates to:
This Guidance Note replaces Notice 18-0236 – IIROC Registration – Proficiency Exemption Requests.
This Guidance Note was published under Notice 21-0190 - IIROC Rules, Form 1 and Guidance.