CIRO CCO flashcards

32 cards. Read the term and the definition here. The deck at the top of this page is optional.

Chief Compliance Officer independence

The CCO must report to the board or a board committee and have direct access to senior management, free from business-line revenue pressure.

Supervision documentation

A member must maintain written supervisory procedures, designate supervisory staff, and retain evidence of monitoring activity for regulatory inspection.

Risk-based compliance testing

Compliance testing follows an annual risk-based plan; deficiencies and remediation steps are documented and tracked until resolved.

Outside business activity review

Registered representatives must disclose outside business activities and personal trading accounts, which are subject to pre-approval and periodic supervisory review.

Escalation of significant violations

Suspected significant violations are escalated promptly to the CCO and senior management, with a written record of the resolution.

Conflicts of interest management

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

Compliance training records

Role-specific training is delivered periodically, and completion records are retained as evidence that the compliance system is functioning.

Recordkeeping for compliance evidence

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

CIRO self-regulatory authority

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

Approved person registration

Individuals 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

Where requirements conflict, the stricter standard governs: securities law first, then CIRO rules and guidance, then member policies.

Material event notification

Members must notify CIRO within prescribed timeframes of material events such as capital deficiencies, significant enforcement actions, and changes in control.

Enforcement and discipline

Investigations may result in settlements or hearings; sanctions include fines, suspension, conditions, and expulsion from membership.

Supervisory procedure mapping

Written supervisory procedures must map to applicable CIRO requirements and be reviewed at least annually for continued adequacy.

Client complaint handling

Members maintain a documented complaint process with timely responses and retained records available for regulatory review.

Membership obligations

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

Minimum regulatory capital

A member must maintain minimum regulatory capital at all times; breaching the early warning threshold requires notification to CIRO and prompt remediation.

Risk-adjusted capital

Capital adequacy is measured against market, credit, and operational risk exposures, not merely absolute capital levels held by the firm.

Monthly financial reporting

Members submit monthly balance sheets, capital calculations, and client asset segregation reports to CIRO; accuracy is a supervisory responsibility.

Client asset segregation

Client assets are held separately from firm assets and reconciled regularly; reconciliation breaks are investigated and documented.

Segregation of duties

Internal controls require separation of functions, dual authorization on cash movements, and independent review of reconciliations.

Business continuity planning

Continuity plans must be documented, tested, and updated to address operational disruptions and technology failures affecting the member.

Financial record retention

Financial records must be retained for prescribed periods, remain readily retrievable, and be protected from alteration or loss.

Material business change approval

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

Manipulative trading prohibition

Wash trades, pre-arranged trades, marking the close, and spoofing are prohibited because they distort prices and mislead market participants.

Insider trading controls

Material non-public information must not be traded on; 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 of execution, and cost.

Suitability of recommendations

Recommendations must suit the client's objectives, risk tolerance, financial circumstances, and time horizon, based on documented KYC information.

Know-your-client and product

Members must document an assessment of both the client profile and the product before making any recommendation to that client.

Client priority and fair dealing

Member proprietary orders must not be front-run or given improper preference over client orders in any trading activity.

Trade reporting and surveillance

Members must report trades accurately and maintain surveillance systems capable of detecting unusual or potentially abusive trading activity.

Fair and balanced marketing

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