Rule amendments relating to the proposed adoption of an Incorporated Approved Person compensation option

Comments Due By: November 6, 2026

Currently, certain client-facing Approved Persons sponsored by mutual fund dealers or firms registered as both an investment dealer and a mutual fund dealer are permitted to utilize an approach whereby the compensation they have earned through the performance of activities for their sponsoring Dealer Member is paid to a party other than themselves1. The remaining client-facing Approved Persons, are not permitted to use such an approach.

To respond to Dealer Member and advisor requests for the Canadian Investment Regulatory Organization’s (CIRO’s) rules to give all advisors the ability to be compensated in a manner similar to other professionals and to address a Canadian Securities Administrators (CSA) request for CIRO to harmonize its advisor compensation rules, CIRO has developed a proposed harmonized approach to client-facing Approved Person compensation.

• 1For mutual fund dealing representatives sponsored by:
  • a mutual fund dealer, or
  • a firm registered as both an investment dealer and a mutual fund dealer (dual-registered firm),
  CIRO rules allow for a portion of their compensation to be paid to an unregistered corporation, except in Alberta and subject to certain other conditions. This current permitted arrangement is referred to as a directed commission arrangement.