A registered firm is subject to ongoing financial requirements, including financial reporting, working capital and insurance requirements.
For further details, refer to Part 12 of National Instrument 31-103 Registration Requirements, Exemptions and Ongoing Registrant Obligations (NI 31-103), and National Instrument 52-107 Acceptable Accounting Principles, Auditing Standards and Reporting Currency (NI 52-107).
In general, each registered firm must submit to the OSC, not more than 90 days after the end of its financial year:
- a copy of its audited annual financial statements for the financial year
- a completed Form 31-103F1 Calculation of Excess Working Capital for the end of the financial year and the immediately preceding financial year
For more information, refer to Part 12 of NI 31-103.
Investment dealers and mutual fund dealers
Investment dealers that are a member of the Investment Industry Regulatory Organization of Canada (IIROC) should refer to the IIROC website to determine the financial reporting requirements that apply to them.
If your firm is a member of a self-regulatory organization (SRO) and is also registered in multiple categories, OSC financial reporting requirements as described above, may also apply.
Registered firms must calculate their excess working capital position using Form 31-103F1. Firms must ensure that their excess working capital is not less than zero for two consecutive days.
If a registered firm is capital deficient, the firm must notify the OSC and correct the deficiency as soon as possible. Under these circumstances, OSC staff will generally recommend imposing terms and conditions on the firm’s registration. For more information, refer to section 12.1 of NI 31-103.
Insurance and bonding
All registered firms must maintain bonding or insurance that contains certain specific clauses and coverage. Sections 12.3 to 12.5 of NI 31-103, and NI 52-107 outline how to calculate the amount of bonding or insurance required for a dealer, adviser or investment fund manager.
A firm must notify the OSC immediately if there are any changes to, claims made under, or cancellation of its bonding or insurance policy.