4456. Financial institution bond

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    1. A Dealer Member must have and maintain insurance against losses, using a financial institution bond with a discovery rider attached or discovery provisions incorporated in the financial institution bond. The five types of losses the insurance must cover are:

      1. Fidelity - Any loss, including loss of property, from a dishonest or fraudulent act of a Dealer Member’s employees:

        1. committed anywhere, and

        2. committed alone or with others.

      2. On premises - Any loss of money, securities, or other property through robbery, burglary, theft, hold‑up or other fraudulent means, mysterious disappearance, damage, or destruction while in any of:

        1. the insured’s offices,

        2. a banking institution’s offices,

        3. a clearing house, or

        4. a recognized place of safe-deposit,

      3. all as defined in the standard form financial institution bond.

      4. In transit - Any loss of money and negotiable or non-negotiable securities or other property, while in transit. The value of securities in transit in an employee’s or agent’s custody must not exceed the protection under this clause. In transit coverage must be calculated on a dollar for dollar basis. A Dealer Member must provide, for IIROC approval, a list of exceptions to the money, securities, or other property protected under this clause.

      5. Forgery or alterations - Any loss through forgery or alteration of any:

        1. cheques,

        2. drafts,

        3. promissory notes, or

        4. other written orders or directions to pay sums in money,

      6. excluding securities, as defined in the standard form financial institution bond.

      7. Securities - Any loss:

        1. through the purchase, acquisition, sale, delivery, extension of credit, or action on securities or other written instruments which prove to have been:

          1. forged,

          2. counterfeited,

          3. raised or altered, or

          4. lost or stolen,

        2. or

        3. due to having guaranteed in writing or having witnessed any signatures on any transfers, assignments or other documents or written instruments, as defined in the standard form financial institution bond.

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