4133. Early warning related requirements

Or jump to a Series:

    1. When a Dealer Member has been designated as being in early warning level 1 or level 2, because of an early warning test violation under section 4132, the following actions must be taken:
       

      Early warning
      level 1

      Early warning
      level 2

      Notifying IIROC in writing

      The Dealer Member’s Ultimate Designated Person and Chief Financial Officer must immediately deliver a letter to IIROC detailing:

      1. the early warning tests in section 4132 that have been violated,
      2. the identified problems that resulted in the test violation,
      3. the Dealer Member’s proposed plan to rectify the problems identified, and
      4. the Dealer Member’s acknowledgement that it is in early warning level 1 and that the restrictions in section 4135 apply.

      The Dealer Member must send a copy of the notification letter to its auditor and the Canadian Investor Protection Fund.

      The Dealer Member’s Ultimate Designated Person and Chief Financial Officer must immediately deliver a letter to IIROC detailing:

      1. the early warning tests in section 4132 that have been violated,
      2. the identified problems that resulted in the test violation,
      3. the Dealer Member’s proposed plan to rectify the problems identified, and
      4. the Dealer Member’s acknowledgement that it is in early warning level 2 and that the restrictions in section 4135 apply.

      The Dealer Member must send a copy of the notification letter to its auditor and the Canadian Investor Protection Fund.

      Meeting with IIROC

      Not applicable

      The Dealer Member’s Ultimate Designated Person and Chief Financial Officer must meet with IIROC to present the Dealer Member’s plan for rectifying the identified problems.

      Taking required actions

      The Dealer Member must:

      1. file a monthly financial report required under section 4151 within 15 business days after the end of each month or on any earlier day that IIROC considers practicable,
      2. provide any other information that IIROC requests, and
      3. comply with the business restrictions in section 4135.

      The Dealer Member must:

      1. file a weekly capital report with the same information as a monthly financial report within five business days after the end of each week or on any earlier day that IIROC considers practicable,
      2. file a weekly report, in an IIROC prescribed form, of its aged segregation deficiencies and an outline of its plan to correct them according to sections 4321 through 4326,
      3. file a business plan for such period and covering such matters as IIROC specifies,
      4. file its next monthly financial report required under section 4151 within 10 business days after the end of each month or any earlier day that IIROC considers practicable,
      5. provide any other information that IIROC requests, and
      6. comply with the business restrictions in section 4135.

      Responding to IIROC’s letter

      IIROC will send a letter to a Dealer Member in early warning level 1 confirming that the Dealer Member has been designated as being in early warning level 1 and requesting information from the Dealer Member.

      A Dealer Member will respond to IIROC’s early warning letter within five business days:

      1. with the requested information, or
      2. acknowledging it will submit the information promptly, and
      3. with an update on the Dealer Member’s early warning situation if any material circumstances have changed.

      The Dealer Member must send copies of its response letter to its auditor and the Canadian Investor Protection Fund.

      IIROC will send a letter to a Dealer Member in early warning level 2 confirming that the Dealer Member has been designated as being in early warning level 2 and requesting information from the Dealer Member.

      A Dealer Member will respond to IIROC’s early warning letter within five business days:

      1. with the requested information, or
      2. acknowledging it will submit the information promptly, and
      3. with an update on the Dealer Member’s early warning situation if any material circumstances have changed.

      The Dealer Member must send copies of its response letter to its auditor and the Canadian Investor Protection Fund.

      On-site reviewing of the Dealer Member’s procedures

      IIROC will as soon as practicable:

      1. conduct an on-site review of the Dealer Member’s procedures for monitoring capital on daily basis, and
      2. prepare a report as to the results of the review.

      IIROC will as soon as practicable:

      1. conduct an on-site review of the Dealer Member’s procedures for monitoring capital on daily basis, and
      2. prepare a report as to the results of the review.

      Reimbursing IIROC for costs

      IIROC may require a Dealer Member to pay reasonable costs and expenses incurred to administer the Dealer Member’s early warning situation under Rule 4100.

      IIROC may require a Dealer Member to pay reasonable costs and expenses incurred to administer the Dealer Member’s early warning situation under Rule 4100.

    There is no history log for this rule.