A registered firm is responsible for having a compliance system that promotes compliance by the firm and individuals with securities law. This section provides an overview of ongoing requirements that registered firms must comply with when doing business. It also provides guidance on some of the business conduct requirements.
A registered firm must have a system of controls and supervision that enables it to comply with securities law and manage the risks associated with its business according to prudent business practice.
Each registered firm must have:
- an ultimate designated person who is primarily responsible for promoting a culture of compliance and overseeing the registered firm’s compliance system, and
- a chief compliance officer who is responsible for monitoring and assessing compliance by the firm, and individuals acting on its behalf, with Ontario securities law.
For more information, see Part 11 of National Instrument 31-103 Registration Requirements, Exemptions and Ongoing Registrant Obligations.
A registered firm’s activities and operations are governed by principles-based obligations and specific legal requirements. Principles-based obligations are broad obligations that guide all activities and operations of the firm and its individuals. Examples of these obligations include:
- Dealing with clients – Registered dealers and advisers, and their representatives, are required to deal fairly, honestly and in good faith with their clients.
- Conflicts of interest – Registered firms are responsible for identifying and appropriately responding to any conflicts of interest that exist or may arise.
- Recordkeeping – Registered firms must maintain books and records that accurately reflect their business activities, financial affairs and client transactions.
Specific business conduct requirements apply to each category of firm registration. For more information, see Business Conduct Requirements.
Industry best practices
To help them comply with securities law, registered firms are encouraged to meet or exceed industry best practices. The OSC’s Compliance team makes recommendations for best practices for dealers, advisers and investment fund managers, which are published in the OSC's Annual Summary Report for Dealers, Advisers and Investment Fund Managers.
See OSC Compliance Reports & Staff Notices for further guidance on best practices.
For more information:
- National Instrument 31-103 Registration Requirements, Exemptions and Ongoing Registrant Obligations
- Companion Policy 31-103CP Registration Requirements, Exemptions and Ongoing Registrant Obligations