Under securities regulations, to carry on business in Canada, investment dealers and mutual fund dealers are required to become Dealer Members of New SRO. A dealer is eligible for membership in New SRO if:
- it is formed under Canadian federal, provincial or territorial law. A firm outside Canada would need to create a Canadian entity that would apply for New SRO membership;
- it proposes to carry on business in Canada as a dealer;
- it is registered or licensed in each jurisdiction in Canada where the nature of the business requires registration or licensing;
- it is in compliance with applicable securities legislation and the requirements of any securities regulatory authority having jurisdiction over it; and
- it will comply with the By-laws, Rules, and Policies of New SRO, as will its related Members, directors, partners, officers, employees and agents.
How to Apply
To become a member of New SRO, firms must follow the steps listed below.
1. Complete the Membership Application Readiness Questionnaire (PDF) to self-assess the firm’s preparedness for applying for New SRO membership.
The Readiness Questionnaire will assist the firm to determine whether it has the required infrastructure, capital, policies & procedures, systems, and key personnel to begin the process of applying for membership. Membership Applications that are not sufficiently complete will not be accepted for review by New SRO staff.
2. Review the Guidance for Applicants (PDF) and the New Membership Application – Documentation Checklist (PDF) for information on the materials and supporting documents that applicants must prepare for their membership application.
Applications for membership undergo an extensive review by New SRO staff. This includes review and analysis of the information and documents submitted, and discussions with the applicant’s management and technical personnel. The Guidance for Applicants (PDF) describes what New SRO staff will review for a membership application. The New Membership Application – Documentation Checklist (PDF) sets out the additional materials, forms and supporting documents that must be included with the firm’s membership application.
3. Contact the Membership Intake team at [email protected] at New SRO once the firm has reached the level of preparedness needed to apply for membership, based on completion of the Readiness Questionnaire (PDF) and review of the Guidance for Applicants (PDF) and the Documentation Checklist (PDF) referenced above.
New SRO staff will schedule an introductory meeting to guide the firm through the application process and key areas of the firm’s business that will be assessed so that the firm can ensure it is prepared to apply for membership.
Once the applicant is ready to apply for membership, New SRO staff will provide the applicant with a ShareFile link and instructions for uploading its membership application package, along with guidance documents to assist the firm in ensuring a fulsome and complete application.
4. Apply for registration as a Dealer with the securities regulatory authority in the applicable jurisdictions.
In Canada, becoming registered as an investment dealer, a mutual fund dealer or a dual-registered firm, is a two-pronged process. The firm must apply to become a Member of New SRO and at the same time, must apply to the securities regulatory authority in every jurisdiction in which it intends to operate as a dealer. Information on how to apply for dealer registration with the Canadian Securities Administrators can be found on the websites for each jurisdiction. Please refer to the Regulatory Links below.
5. Submit a fully completed Membership Application Form (PDF) and the required supporting materials along with the non-refundable deposit applicable for the type of Dealer.
Applicants must submit their membership application package using the ShareFile link provided by New SRO staff. The membership application package submitted by the firm must contain sufficient information and documentation to allow for a meaningful review of the application. New SRO staff will not accept a membership application for review until it is substantially complete.
Applicants can avoid unnecessary delays in the review and processing of their membership application by:
Once a membership application is accepted for review, the applicant will be required to submit a non-refundable application review deposit. The amount of the non-refundable deposit is specific to the type of Dealer:
- $1,500 non-refundable deposit for a Level 1 Mutual Fund Dealer
- $3,000 non-refundable deposit for a Level 2 or Level 3 Mutual Fund Dealer
- $5,000 non-refundable deposit for a Level 4 Mutual Fund Dealer
- $25,000 one-time entrance fee for an Investment Dealer or Dual-Registered Dealer ($10,000 of this is a non-refundable deposit required at the time the application is made).
Refer to the Fee Model Guidelines for Investment Dealers (PDF) and Mutual Fund Dealer Membership Fees (PDF) for further information on membership fees.
6. Respond to follow-up information requests from New SRO staff during the review and approval process.
Applicants should be prepared to respond to follow-up requests for information from New SRO staff during the course of the review. Applicants can avoid unnecessary delays in the review and processing of their membership application by responding to information requests from New SRO staff in a timely manner.
All membership applications undergo an extensive review with respect to financial & operations compliance, business conduct compliance, trading conduct compliance and registration requirements. Applicants will not be admitted to membership until these requirements have been met. Generally, the time for review and approval of a membership application is a minimum of six months. Applications for firms with complex or novel business models can take much longer than this minimum time period. The completeness of the applicant’s membership application package and the applicant’s responsiveness to information requests from New SRO staff directly impact the time it will take for review and approval of the application.
When New SRO staff are satisfied that the application meets membership requirements, the application will be submitted to New SRO’s Board of Directors for consideration. The Board will decide whether to: (i) approve the membership application, (ii) approve the membership application with terms and conditions, or (iii) reject the application.
The New SRO will notify the applicant in writing of the Board’s decision. Upon approval by the Board, the applicant will be admitted to membership once administrative requirements, such as payment of any remaining fees, have been finalized.
7. Ongoing Membership Requirements
Once accepted into membership, the Member will be subject to ongoing requirements, which include regulatory or financial reporting. Many of these reporting requirements have filing deadlines and, in some cases, New SRO can charge late filing fees.
Dealer Members are also required to inform the New SRO of any material changes to information that was originally submitted to the New SRO in the firm’s membership application or for individual application materials. Examples of material changes with respect to the Member include:
- change of name or address for service;
- change in registration or licensing with the relevant securities commission;
- changes in ownership and control;
- reorganizations, mergers, amalgamations;
- civil proceedings;
- change in, or refusal of, insurance bond; and
- change in business activities
Many of these changes require prior notification to the New SRO or prior approval from New SRO staff or the Board of Directors. Members should refer to the New SRO By-laws and the Investment Dealer and Partially Consolidated Rules or the Mutual Fund Dealer Rules, as applicable, to determine the reporting requirements applicable to their firm.