CIRO CCO cheat sheet

Supervision requires a documented compliance system: written policies, designated supervisory staff, and evidence of monitoring activity retained for inspection.

The Chief Compliance Officer reports to the board or a board committee and has direct access to senior management; independence from business-line revenue pressure is a core expectation.

A dealer must supervise each registered representative's conduct, including outside business activities and personal trading accounts, through pre-approval and periodic review.

Escalation rule: any suspected significant violation is escalated to the CCO and appropriate senior management promptly, with a written record of the resolution.

Compliance testing follows a risk-based annual plan; results, deficiencies, and remediation steps are documented and tracked to closure.

Training is periodic and role-specific; completion records are retained and tracked as evidence of a functioning compliance system.

Conflicts of interest are identified, disclosed, and managed; personal dealings, gifts, and outside interests require pre-clearance or disclosure per policy.

Recordkeeping: books and records supporting compliance conclusions must be retained in an accessible, retrievable form for the required retention period.

CIRO is the recognized self-regulatory organization for Canadian investment dealers; its rules are enforceable and binding on members and approved persons.

Membership obligations include capital adequacy, conduct standards, supervision, recordkeeping, and cooperation with regulatory examinations and investigations.

Approved persons must be registered in an appropriate category; changes in employment, outside activities, or regulatory status must be reported to the member and CIRO.

Rule interpretation hierarchy: statute and securities law, then CIRO rules and guidance, then member policies; conflicts are resolved in favor of the stricter requirement.

Dealer members must notify CIRO of material events within prescribed timeframes, including capital deficiencies, significant enforcement actions, and changes in control.

Discipline process: investigations may lead to enforcement action, settlements, or hearings; sanctions include fines, suspension, conditions, and expulsion.

Members must maintain written supervisory procedures mapped to applicable CIRO requirements and review them at least annually.

Client complaint handling requires a documented process, timely response, and retention of complaint records for regulatory review.

Minimum regulatory capital must be maintained at all times; a member falling below the early warning threshold must notify CIRO and remediate promptly.

Risk-adjusted capital framework measures capital adequacy against market, credit, and operational risk exposures, not just absolute capital levels.

Monthly financial reporting to CIRO includes the balance sheet, capital calculation, and segregation of client assets; accuracy is a supervisory responsibility.

Client assets must be segregated from firm assets and reconciled regularly; reconciliation breaks are investigated and documented.

Internal controls include segregation of duties, dual authorization on cash movements, and independent review of reconciliations.

Business continuity plans must be documented, tested, and updated to address operational disruptions and technology failures.

Record retention for financial records follows prescribed periods; records must be readily retrievable and protected from alteration.

Material changes in business operations, ownership, or capital structure require prior notification and, where applicable, approval from CIRO.

Prohibition on manipulative and deceptive trading: wash trades, pre-arranged trades, marking the close, and spoofing are prohibited conduct.

Insider trading prohibition covers material non-public information; firms maintain information barriers and restricted lists to prevent misuse.

Best execution obligation: members must use reasonable efforts to obtain the best available price considering price, speed, certainty, and cost.

Suitability rule: recommendations must be suitable for the client's objectives, risk tolerance, financial circumstances, and time horizon.

Know-your-client and know-your-product obligations require documented assessment before any recommendation is made.

Client priority and fair dealing: member proprietary orders must not be front-run or given improper preference over client orders.

Trade reporting and surveillance: members must report trades accurately and maintain surveillance systems to detect unusual activity.

Marketing and communications must be fair, balanced, and not misleading; performance claims require appropriate disclosure of assumptions.