Suspending, reinstating and revoking registration

The Ontario Securities Commission (OSC) has the authority to automatically suspend or revoke a registered firm or individual sponsored by a registered firm for violations of securities law. Registrations may also be suspended or revoked when the OSC has serious concerns about a firm or individual’s suitability for ongoing registration and when the OSC determines that it is no longer in the public interest for a firm or individual to be registered.

Notification of suspension or revocation

When OSC staff recommend that a firm’s or individual’s registration be suspended or revoked, OSC staff will send the firm or individual a letter, with a copy to the sponsoring firm if applicable, providing written notice of its recommendation and brief reasons for it. This is referred to as a Letter of Brief Reasons. Section 31 of Ontario’s Securities Act and Section 23(3) of Ontario’s Commodity Futures Act then gives the individual or firm an opportunity to be heard by the OSC Director before a decision is made concerning staff’s recommendation.

Suspending registration

A suspended firm or individual is still registered but may not engage in the activity for which they are registered.

Firms that are a member of the Investment Industry Regulatory Organization of Canada (IIROC) should consult IIROC guidelines on revoking or suspending memberships.

Similarly, firms that are a member of the Mutual Fund Dealers Association of Canada (MFDA) should refer to MFDA guidelines.

Automatic suspension for firms

A firm’s registration is automatically suspended when either of the following occurs:

  • the firm does not pay its annual participation fees in full and on time
  • IIROC or the MFDA revokes or suspends the firm’s membership and the membership is a requirement of the category of the firm’s registration

For more information, please refer to part 10 of National Instrument 31-103 Registration Requirements, Exemptions and Ongoing Registrant Obligations (NI 31-103).

Automatic suspension for individuals

An individual’s registration is automatically suspended when any of the following occur:

  • the individual ceases to have authority to act as a registered individual on behalf of the sponsoring firm because their employment, partnership or agency relationship with the firm has changed or ended
  • IIROC or the MFDA revokes or suspends the individual’s approval to conduct securities related business on behalf of any IIROC or MFDA member firm
  • the sponsoring firm has been suspended in that category of registration and as a result, the registration of each dealing, advising or associate advising representative acting on behalf of the firm in that category is also suspended

For more information, please refer to part 6 of NI 31-103.

Reinstating registration

Firms and individuals whose registration has been suspended must apply to the OSC to have their registration reinstated. This includes permitted individuals. Once their registration has been reinstated, the firm or individual may resume the activities they are registered for.

A firm or individual who does not apply to have their registration reinstated within two years of the suspension may have their registration revoked.

Firms

Submit a request in writing to the OSC to reinstate registration. A fee applies.

Individuals

To reinstate registration with the same sponsoring firm, individuals must complete Form 33-109F4 Registration of Individuals and Review of Permitted Individuals. The sponsoring firm must then submit the form through the National Registration Database (NRD) and pay the applicable fee.

To reinstate registration with another sponsoring firm, individuals must complete Form 33-109F4, unless they meet the requirements for an automatic transfer. The sponsoring firm must then submit the form through NRD. For reinstating registration under Ontario’s Commodity Futures Act, individuals must complete Form 33-506F4 Registration of Individuals and Review of Permitted Individuals and the sponsoring firm must submit the form through NRD.

For more information, refer to National Instrument 31-103 Registration Requirements, Exemptions and Ongoing Registrant Obligations (NI 31-103) and OSC Rule 33-506 Registration Information.

For individuals whose authority to conduct securities related business on behalf of any MFDA member has been suspended, revoked or prohibited, refer to MFDA Discipline: What it Means For Your Registration for information specific to applying to reinstate registration once their period of suspension, revocation or prohibition is over.

Revoking registration

A revocation differs from a suspension in that the OSC has terminated the registration. If registration is revoked, the firm or individual will have to submit to the OSC a new application if they want to be registered again.

Automatic revocation

If a suspended registration has not been reinstated subsequently, it will be revoked on the second anniversary of the suspension.