Investor Alert:
CIRO is issuing a warning to Canadian investors regarding Canada Token Trade.
Effective Date: December 31, 2021
This Guidance Note includes the following forms:
This Guidance Note provides guidance on:
A Dealer must hold securities that are not under its control or physical possession at prescribed external acceptable securities locations. A foreign institution or securities dealer may be an external acceptable securities location if it meets the applicable criteria and is approved by the IIROC as an acceptable securities location. To obtain IIROC’s approval of a foreign institution or securities dealer as an acceptable securities location, a Dealer must:
In some foreign jurisdictions, it may not be possible for a Dealer to hold securities in an external acceptable securities location. In these cases, the Dealer must obtain a waiver from the client under section 4352.
If a Dealer holds securities in a foreign jurisdiction that does not meet the criteria of an external acceptable securities location specified in IIROC’s requirements, and the Dealer has not obtained a client waiver, then these securities are considered to be held at a non-acceptable securities location.
Appendix B is a client consent and waiver form that may be used if a client agrees to waive the requirement for a Dealer to hold securities at an external acceptable securities location.
See requirements for “Annual approval of foreign institutions and foreign securities dealers as acceptable securities locations” in section 4351.
During the course of an annual audit, a Dealer’s auditor must obtain 100% positive confirmation of all the Dealer’s security positions as at year-end. This includes positions held at:
A Dealer must advise its clients of any securities held under a client waiver that are unconfirmed.
For year-end IIROC Form 1 filings, a Dealer must provide as supplementary disclosure to IIROC:
IIROC Rules this Guidance Note relates to:
This Guidance Note replaces MR-033 – "Other" Foreign Acceptable Securities Locations (June 6, 2000).
This Guidance Note was published under Notice 21-0190 - IIROC Rules, Form 1 and Guidance.
Appendix A – Foreign custodian questionnaire and certificate
Appendix B – Consent and waiver