A registered firm is responsible for having an effective system of controls and supervision that promotes compliance by the firm and individuals and 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
- a chief compliance officer who is responsible for monitoring and assessing compliance with Ontario securities law by the firm and by individuals acting on its behalf
For full details, refer to Part 11 of National Instrument 31-103 Registration Requirements, Exemptions and Ongoing Registrant Obligations and Companion Policy 31-103CP.
Compliance requirements of a registered firm
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. These obligations require, among other things, that:
- registered dealers and advisers, and their representatives, deal with their clients fairly, honestly and in good faith
- registered firms identify and appropriately respond to any conflicts of interest that exist or may arise
- registered firms maintain accurate books and records that reflect their business activities, financial affairs and client transactions
- registered firms apply specific business conduct requirements to each category that the firm is registered under
Industry best practices
To assist registered firms in their efforts to comply with securities law, the Ontario Securities Commission develops and publishes a Summary Report for Dealers, Advisers and Investment Fund Managers on an annual basis. The report makes recommendations for industry best practices and summarizes:
- new and proposed rules and initiatives impacting registrants
- current trends in deficiencies from compliance reviews of registrants
- current trends in registration issues