Integrated Fee Model — Frequently Asked Questions (FAQs)

I. Membership Annual Dues

1. Why is the Fee Model being changed?

In alignment with CIRO’s Guiding Principles, the Fee Model is being changed in order to have a consistent and harmonized approach to collecting fees for the newly combined membership. There is a need for an integrated fee model which:

• can be applied consistently to all Members, ID Members and MFD Members, regardless of size or business model,
• is practical to administer in recovering the combined operating costs of CIRO, and
• is sustainable to accommodate future needs.

2. I am a Mutual Fund Dealer. How is the Fee Model changing for my firm?

The methodology for the Annual Member Fee will be changing significantly for MFD Members in the following ways:

• Fees will no longer be based on AUA, but on Revenues and Approved Persons (APs),
• The Revenue component will be based on total revenues reported on Line 13 of Statement D in the December 31 Form 1,
• MFD Members with AUA greater than $1 billion will be subject to additional changes (refer to the Revenue and Approved Person sections below),
• There will be an AP fee calculated as the product of $300 and the 12-month average AP count for the previous calendar year, and
• The Minimum Fee is increasing as follows:
  • from $1,500 to $5,000 for a Level 1, 2 or 3 MFD Member,
  • from $10,000 to $15,000 for a Level 4 MFD Member.

3. I am an Investment Dealer. How is the fee model changing for my firm?

The methodology for the Annual Member Fee will not be changing significantly for ID Members. Here are some of the key changes:

• The AP fee will now be based on the 12-month average of AP count for the previous calendar year, and not as at December 31,
• The Minimum fee will increase from $16,000 to $25,000, and
• There will be 7 tiered rates.

4. I am a dual registered dealer. How is the fee model changing for my firm?

A dual registered dealer is considered an “Investment Dealer” (ID) for the purpose of calculating fees. Throughout this document, references to “IDs” include firms that are dual-registered as well. Instead of receiving two fee letters and invoices for separate ID and MFD Annual Member Fees, you will now be charged one fee as an ID starting in FY26.

5. Why was AUA not used in the Integrated Fee Model?

CIRO was focused on developing a methodology for an Integrated Fee Model that would apply to all Members regardless of size or business model. While AUA was the primary factor in the MFD fee model, it cannot be applied to all ID Members consistently due to their diverse nature of business lines, products and accounts. For example, AUA does not apply to capital markets activity. Revenue and APs provided the most consistent basis of measurement to allocate costs across all Members.

6. Will this impact Integration Cost Recovery Fees?

Separate from the new Fee Model, CIRO’s Board approved the elimination of the Integration Fund, release remaining funds from the Unrestricted Fund. There have been no additional Integration Cost Recovery Fees after FY25.

7. Why are the transitionary measures for MFDs operating in Québec and deemed Members ending, and what are the impacts to Member Annual Dues?

As required by the Québec Recognition Order, MFDs operating in Québec must benefit from reduced fees proportionate to services offered during the transition period of the Integrated Fee Model. Based on the Autorité des marchés financiers (AMF) announcement, by July 4, 2026, CIRO will be performing all regulatory services to MFDs operating in Québec and their dealing representatives. Accordingly, the following changes will take effect starting July 1, 2026:

• As approved by the CSA, CIRO will end the transitionary measures for MFD Members operating in Québec per Appendix C of the CIRO Fee Model. 100% of MFDs Québec revenue will be included in the FY27 Dealer Regulation fee calculation.
• Upon full transition of regulatory services to CIRO for MFDs operating in Québec and their dealing representatives, MFD dealing representatives who are only registered in Québec and Members registered only in Québec (deemed Members) will be included under CIRO’s Fee Model.1

The table below summarizes the measures applicable during FY27 for Dealer Regulation fee calculation before and upon full Québec transition effective July 1, 2026.

Concurrently, CIRO will no longer collect its main activity-based registration-related submission fees through NRD for MFD Members operating in Québec, starting July 1, 2026.

Revenue Component

1. Why did CIRO implement a normalization factor? And why does it only apply to mutual fund dealers with AUA greater than $1 billion?

Some MFD Members reported lower Form 1 revenues compared to other MFD Members even though they had proportionately larger AUA than other MFD Members. These MFD Members are typically part of cost-sharing or transfer pricing arrangements amongst a corporate group, (i.e. where the fund manufacturer is affiliated and therefore, pays a lower fee to the MFD Member to distribute their products than they would typically pay to a third-party MFD Member). The change to a revenue-based fee model would see such Members experience material fee decreases relative to their peers which does not meet the principle of fair and proportionate allocation. Therefore, the normalization factor maintains equity to the allocation of costs.

Members that have more than $1 billion of average AUA represent medium and large size MFD Members, and therefore this threshold avoids capturing smaller MFD Members that may have lower Form 1 revenues compared to AUA for other reasons, such as being a relatively new Member. Of the Members with more than $1 billion of average AUA, only a small number of Members have a revenue to AUA ratio low enough for the normalization factor calculation to apply.

2. Why is the normalization factor not considered for ID Members?

ID Members typically have a diverse range of revenues, business lines, products and accounts. The normalization factor would be significantly more complex to determine for ID Members and would require additional reporting from ID Members to separate revenues. The cost of this effort outweighs the benefits.

3. How do I calculate the normalization factor to determine the revenue for fee purposes if my firm is an MFD Member with more than $1 billion of average AUA?

Here is a hypothetical example of the calculation:

Approved Person (AP) Fee Component

1 Why is the AP count based on a 12-month average instead of the number as at December 31?

MFD Members tend to experience material fluctuations in their AP counts from month to month. Therefore, using a 12-month average for the year tempers volatility in the determination of fees for all Members.

Minimum Fee Component

1. Why were the minimum fees increased?

To ensure a more proportionate distribution of costs across the membership, the fee model is increasing the minimum fees marginally over the pre-integration levels.

For information, the minimum fees for ID Members prior to the Interim Fee Model were:

• $25,000 from 2002-2011
• $15,000 (for Dealers whose allocated costs are less than $20,000) and $27,500 (for Dealers whose allocated costs are more than $20,000) for 2012-2017,
• $22,500 in 2018.

For information, the minimum fees for MFD Members prior to the Interim Fee Model were:

• $10,000 for Level 4, and $3,000 for Level 1, 2, 3 since 2001.

2. Why were the minimum fees reduced under the interim fee model from the legacy IIROC and MFDA fee structures?

It was important for both legacy SROs to retain and support the smaller dealer community through the transition to the new regulatory model. Accordingly, the Interim Fee Model reduced minimum fees and rebalanced downward the fee rates per Revenue Tier for ID Member fees and rates per AUA for MFD Member fees applicable to the small dealer group. This modification, as noted in the Information Circular to all Members in August 2022, was to apply only on an interim basis starting in fiscal year 2024 and for a minimum of two years or until the final integrated fee model was determined.

II. Membership Application and Business Change Fees

1. Why are the membership application fees being increased?

The membership application fees have not changed in over 20 years and are far below CIRO’s costs of reviewing these applications. The new fee amounts improve recovery of CIRO’s costs associated with providing these regulatory services.

2. Why is there a specific application fee for Crypto Dealers?

Membership applications for Crypto Dealers require a much more extensive review by CIRO due to the novel nature of their business models in comparison to other ID applicants that trade traditional securities. For example, Crypto Dealer applications generally include exemptive relief requests from CIRO requirements, which require additional review, assessment and approval by CIRO. For other types of membership applications, requests for exemptive relief from CIRO requirements are rare. The higher entrance fee for Crypto Dealer applications reflects the increased costs incurred by CIRO in comparison to other types of ID applications.

3. Why am I being charged for material changes in business?

The fees are intended to recover CIRO’s incremental costs associated with the review of material changes in business from those Dealer Members that utilize this regulatory service.

4. Will MFD Members be charged for material changes in business?

MFD Members will pay a fee for reorganization, amalgamation, or other similar business combination, captured under CIRO By-law No.1, section 3.10. MFD Members will also pay a fee if they apply to become an ID Member. However, MFD Members will not be charged a fee for other types of material changes to business activities. If the harmonized Rulebook requires MFD Members to submit “material changes to business activities" for CIRO review, as currently required for ID Members under IDPC Rules, subsection 2246(2), then we expect to propose corresponding fees at that time.

5. What is the application fee for an MFD Member that wants to become an ID Member?

The MFD Member would pay a reduced application fee since it is already a CIRO Member. The required fee would be $20,000. This fee is the difference in the ID Member application fee ($30,000) and the MFD Member application fee ($10,000).

6. What is the fee for an ID Member to become a Dual-Registered Member?

An ID Member becoming dual-registered is “a material change to business activities” under IDPC Rules, section 2246(2). The fee for an ID Member’s material change to business activities is $5,000.

7. Why is CIRO implementing an “extraordinary costs and expenses” reimbursement for applications and business changes that take more than 6 months to review?

This reimbursement framework is intended to recover costs for excessive attention, time and resources spent on an application or change in business. The fees associated with membership applications and material business changes are based on CIRO’s review keeping within 6 months. We often find that delays in advancing applications are generally due to a lack of preparedness and/or responsiveness by the firm.

CIRO has several ways to ensure that firms are prepared before sending an application, including:

• Providing firms with guidance on what is needed to apply for membership or for a change in business,
• Asking firms to complete a Readiness Questionnaire so they can self-assess their level of preparedness for the membership application process,
• Conducting a preliminary review, during the intake process of the application, addressing any significant deficiencies in advance of formally accepting the application any applicable fees, and
• Operating under CIRO service standards, ensuring that responses are provided to Member submissions within certain timelines.

8. If an application or business change is still being reviewed by CIRO after 6 months, are applicants/members automatically charged for “extraordinary costs and expenses”?

No, the extraordinary costs reimbursement is not automatically applied after 6 months. Instead, if after 6 months, the compliance review has not yet been completed, CIRO staff will assess whether it is appropriate to recommend seeking reimbursement of extraordinary costs and expenses. In that assessment, staff will consider the factors that contributed to the lengthy review. Common reasons for an extended compliance review that may be assessed for extraordinary costs include delays by the applicant or member providing comprehensive responses to information requests from CIRO staff, and delays by the applicant or member to resolve outstanding issues. CIRO staff will provide firms with advance warning that their application may be subject to the extraordinary costs and expenses reimbursement.

Any recommendation by CIRO staff to charge a firm for “extraordinary costs and expenses” would be assessed at the discretion of CIRO’s Board.

9. Are there circumstances where the fee could be waived?

As described above, the “extraordinary costs and expenses” charge is not automatic. Instead, at the 6-month mark, CIRO staff can make the assessment of whether it’s appropriate to recommend seeking reimbursement of “extraordinary costs and expenses.” Staff can determine based on the circumstances that it may not be appropriate to seek reimbursement, and in that case would not move forward with a recommendation to charge the firm.

III. Market Maker discount

1. Will this change impact my firm?

The removal of the discount for Qualified Market Makers will only impact fees for investment dealers that directly execute trades in equity securities or ETFs on Canadian marketplaces. Meaning, only investment dealers that are also Participants (meaning, a member or subscriber of a marketplace).

2. How will this change impact my firm?

If your firm is a Participant and NOT a Qualified Market Maker, the fee that is applied on a per trade basis will decrease. If your firm is a Participant and IS a Qualified Market Maker, the impact will depend on how many trades your firm executes as a Qualified Market Maker.

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  The AMF has approved full transition of regulatory services to CIRO for MFDs operating in Québec and their dealing representatives on March 23, 2026.