Form 33-109F6 Firm Registration
Who should complete this form?
This form is for firms seeking registration under securities legislation, derivatives legislation or both.
Complete and submit this form to seek initial registration as a dealer, adviser or investment fund manager, or to add one or more jurisdiction of Canada or categories to a firm’s registration.
Definitions
In this form:
Chief compliance officer – see section 2.1 of NI 31-103.
Derivatives – financial instruments, such as futures contracts (including exchange traded contracts), futures options and swaps whose market price, value or payment obligations are derived from or based on one or more underlying interests. Derivatives can be in the form of instruments, agreements or securities.
Firm – the person or company seeking registration.
Foreign jurisdiction – see National Instrument 14-101 Definitions.
Form – Form 33-109F6 Firm Registration.
Jurisdiction or jurisdiction of Canada – see National Instrument 14-101 Definitions.
NI 31-103 – National Instrument 31-103 Registration Requirements, Exemptions and Ongoing Registrant Obligations.
NI 33-109 – National Instrument 33-109 Registration Information.
NI 52-107 – National Instrument 52-107 Acceptable Accounting Principles and Auditing Standards.
NRD – National Registration Database. For more information, visit www.nrd-info.ca.
Parent – a person or company that directly or indirectly has significant control of another person or company.
Permitted individual – see NI 33-109.
Predecessor – any entity listed in question 3.6 of this form.
Principal regulator – see NI 33-109.
Significant control – a person or company has significant control of another person or company if the person or company:
• directly or indirectly holds voting securities representing more than 20 per cent of the outstanding voting rights attached to all outstanding voting securities of the other person or company, or
• directly or indirectly is able to elect or appoint a majority of the directors (or individuals performing similar functions or occupying similar positions) of the other person or company.
Specified affiliate – a person or company that is a parent of the firm, a specified subsidiary of the firm, or a specified subsidiary of the firm’s parent.
Specified subsidiary – a person or company of which another person or company has significant control.
SRO – see National Instrument 14-101 Definitions.
Ultimate designated person – see section 2.1 of NI 31-103.
You – the individual who completes, submits, files and/or signs the form on behalf of the firm.
We and the regulator – the securities regulatory authority or regulator in the jurisdiction(s) of Canada where the firm is seeking registration.
Contents of the form
This form consists of the following:
Part 1 – Registration details
Part 2 – Contact information
Part 3 – Business history and structure
Part 4 – Registration history
Part 5 – Financial condition
Part 6 – Client relationships
Part 7 – Regulatory action
Part 8 – Legal action
Part 9 – Certification
Schedule A – Contact information for notice of collection and use of personal information
Schedule B – Submission to jurisdiction and appointment of agent for service
Schedule C – Form 31-103F1 Calculation of excess working capital
You are also required to submit the following supporting documents with your completed form:
1. Schedule B – Submission to jurisdiction and appointment of agent for service for each jurisdiction where the firm is seeking registration (question 2.4)
2. Business plan, policies and procedures manual, and client agreements (except in Ontario) (question 3.3)
3. Constating documents (question 3.7)
4. Organization chart (question 3.11)
5. Ownership chart (question 3.12)
6. Calculation of excess working capital (question 5.1)
7. Directors’ resolution approving insurance (question 5.7)
8. Audited financial statements (question 5.13)
9. Letter of direction to auditors (question 5.14)
The firm is required to pay a registration fee in each jurisdiction of Canada where it is submitting and filing this form. Refer to the prescribed fees of the applicable jurisdiction for details. |
How to complete and submit the form All dollar values are in Canadian dollars. If a question does not apply to the firm, write “n/a” in the space for the answer.
If the firm is seeking registration in more than one jurisdiction of Canada or category, other than in the category of restricted dealer, you only need to complete and submit one form. If the firm is seeking registration as a restricted dealer, submit and file the form with each jurisdiction of Canada where the firm is seeking that registration.
You can complete this form: • on paper and deliver it to the principal regulator or relevant SRO • on paper, scan it and e-mail it to the principal regulator or SRO
You can find contact information for submitting and filing the form in Appendix B of Companion Policy 33-109CP Registration Information.
It is an offence under securities legislation and derivatives legislation, including commodity futures legislation, to give false or misleading information on this form.
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See Part 3 of NI 33-109. |
Updating the information on the form The firm is required to notify the regulator, within specified times, of any changes to the information on this form by submitting and filing Form 33-109F5 Change of Registration Information.
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Collection and use of personal information We and the SROs (if applicable) require personal information about the people referred to in this form as part of our review to determine whether the firm is suitable for registration. If the firm is approved, we also require this information to assess whether the firm continues to meet the registration requirements.
We may only:
• collect the personal information under the requirements in securities legislation or derivatives legislation or both • use this information to administer and enforce provisions of the securities legislation or derivatives legislation or both
We may collect personal information from police records, records of other regulators or SROs, credit records, employment records, government and private bodies or agencies, individuals, corporations, and other organizations. We may also collect personal information indirectly.
We may provide personal information about the individuals referred to in this form to other regulators, securities or derivatives exchanges, SROs or similar organizations, if required for an investigation or other regulatory issue.
If anyone referred to in this form has any questions about the collection and use of their personal information, they can contact the regulator or SRO, if applicable, in the relevant jurisdiction of Canada. See Schedule A for details. In Québec, they can also contact the Commission d’accès à l’information du Québec at 1-888-528-7741 or visit its website at www.cai.gouv.qc.ca. |
For more information, visit www.nrd-info.ca. |
Part 1 – Registration details
1.1 Firm’s full legal name
Provide the full legal name of the firm as it appears on the firm’s constating documents required under question 3.7. If the firm is a sole proprietorship, provide your first, last and any middle names.
If the firm’s legal name is in English and French, provide both versions.
1.2 Firm’s NRD number
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1.3 Why are you submitting this form? Complete: To seek initial registration as a firm in one or more jurisdictions of Canada The entire form
To add one or more jurisdictions of Canada Questions 1.1, 1.2, 1.4, 1.5, 2.4, 3.9, to the firm’s registration 5.4, 5.6*, and Part 9
To add one or more categories to the firm’s Questions 1.1, 1.2, 1.4, 1.5, 3.1, 5.1, 5.4, registration 5.5, 5.6*, 5.7, 5.8, Part 6 and Part 9
* If the firm is adding Québec as a jurisdiction for registration in the category of mutual fund dealer or scholarship plan dealer, complete question 5.6.
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Abbreviations Alberta (AB) British Columbia (BC) Manitoba (MB) New Brunswick (NB) Newfoundland and Labrador (NL) Northwest Territories (NT) Nova Scotia (NS) Nunavut (NU) Ontario (ON) Prince Edward Island (PE) Québec (QC) Saskatchewan (SK) Yukon (YT)
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1.4 In what category and jurisdiction is the firm seeking registration? Check all that apply.
(a) Categories under securities legislation
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(b) Categories under derivatives legislation (Manitoba and Ontario only)
Category |
Manitoba |
Dealer (merchant) |
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Dealer (futures commission merchant) |
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Dealer (floor broker) |
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Local |
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Adviser |
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Ontario |
Commodity trading adviser |
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Commodity trading counsel |
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Commodity trading manager |
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Futures commission merchant |
(c) Investment dealers and portfolio managers (Québec only)
If the firm is seeking registration in Québec as an investment dealer or a portfolio manager, will the firm also act as a:
Derivatives dealer Yes No
Derivatives portfolio manager Yes No
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1.5 Exemptions
Is the firm applying for any exemptions under securities or derivatives legislation?
Yes No
If yes, provide the following information for each exemption:
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Part 2 – Contact information
Addresses
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A post office box on its own is not acceptable for a head office address. |
2.1 Head office address
If the firm’s head office is in Canada, go to question 2.3.
If the firm’s head office is not in Canada, go to question 2.2.
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2.2 Firms whose head office is not in Canada
(a) Does the firm have any business location addresses in Canada?
Yes No
If yes, provide the firm’s primary Canadian business location address:
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The securities regulatory authority in this jurisdiction of Canada is the firm’s principal regulator in Canada. |
(b) If a firm is not registered in a jurisdiction of Canada, indicate the jurisdiction of Canada in which the firm expects to conduct most of its activities that require registration as at the end of its current financial year or conducted most of its activities that require registration as at the end of its most recently completed financial year.
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A post office box is acceptable for a mailing address. |
2.3 Mailing address
Same as the head office address
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If the firm does not have an office in a jurisdiction of Canada where it is seeking registration, it must appoint an agent for service in that jurisdiction of Canada. |
2.4 Address for service and agent for service
Attach a completed Schedule B Submission to jurisdiction and appointment of agent for service for each jurisdiction of Canada where the firm is seeking registration and does not have an office.
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Contact names
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A registered firm must have an individual registered in the category of ultimate designated person. |
2.5 Ultimate designated person
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A registered firm must have an individual registered in the category of chief compliance officer. |
2.6 Chief compliance officer
Same as ultimate designated person
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Part 3 – Business history and structure
Business activities
3.1 The firm’s business
Provide a description of the firm’s proposed business, including its primary business activities, target market, and the products and services it will provide to clients.
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3.2 Other names
In addition to the firm’s legal name in question 1.1, does the firm use any other names, such as a trade name?
Yes No
If yes, list all other names and indicate if each name has been registered:
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3.3 Business documents
Does the firm have the following documents to support its business activities?
If no, explain why the firm does not have the document:
Attach the firm’s business plan, policies and procedures manual and client agreements, including any investment policy statements and investment management agreements, except if the regulator in Ontario is the principal regulator of the firm seeking registration, unless the regulator in Ontario has requested they be provided.
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History of the firm
3.4 When was the firm created?
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3.5 How was the firm created?
New start-up Go to question 3.7. Merger or amalgamation Go to question 3.6. Reorganization Go to question 3.6. Other statutory arrangement Please specify below and go to question 3.6.
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Part 4 – Registration history
The questions in Part 4 apply to any jurisdiction and any foreign jurisdiction.
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4.1 Securities registration
In the last seven years, has the firm, or any predecessors or specified affiliates of the firm been registered or licensed to trade or advise in securities or derivatives?
Yes No
If yes, provide the following information for each registration:
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4.2 Exemption from securities registration
Is the firm currently relying on any exemptions from registration or licensing to trade or advise in securities or derivatives?
Yes No
If yes, provide the following information for each exemption:
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4.3 Membership in an exchange or SRO
In the last seven years, has the firm, or any predecessors or specified affiliates of the firm been a member of a securities or derivatives exchange, SRO or similar organization?
Yes No
If yes, provide the following information for each membership:
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4.4 Exemption from membership in an exchange or SRO
Is the firm currently relying on any exemptions from membership with a securities or derivatives exchange, SRO or similar organization?
Yes No
If yes, provide the following information for each exemption:
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4.5 Refusal of registration, licensing or membership
Has the firm, or any predecessors or specified affiliates of the firm been refused registration, licensing or membership with a financial services regulator, securities or derivatives exchange, SRO or similar organization?
Yes No
If yes, provide the following information for each refusal:
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Examples of other financial products include financial planning, life insurance and mortgages.
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4.6 Registration for other financial products
In the last seven years, has the firm, or any predecessors or specified affiliates of the firm been registered or licensed under legislation that requires registration or licensing to sell or advise in a financial product other than securities or derivatives?
Yes No
If yes, provide the following information for each registration or licence:
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Part 5 – Financial condition
Capital requirements
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5.1 Calculation of excess working capital
Attach the firm’s calculation of excess working capital.
• Investment dealers must use the capital calculation form required by the Investment Industry Regulatory Organization of Canada (IIROC).
• Mutual fund dealers must use the capital calculation form required by the Mutual Fund Dealers Association of Canada (MFDA), except for mutual fund dealers registered in Québec only.
• Firms that are not members of either IIROC or the MFDA must use Form 31-103F1 Calculation of Excess Working Capital. See Schedule C.
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5.2 Sources of capital
List all cash, cash equivalents, debt and equity sources of the firm’s capital.
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See Schedule C Form 31-103F1 Calculation of Excess Working Capital. |
5.3 Guarantors
In relation to its business, does the firm:
If yes, provide the following information for each guarantee:
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Bonding and insurance
Questions 5.4 to 5.8 apply to the firm’s bonding or insurance coverage or proposed bonding or insurance coverage for securities and derivatives activities only. This in accordance with Part 12, Division 2 of NI 31-103.
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This information is on the financial institution bond. |
5.4 Jurisdictions covered
Where does the firm have bonding or insurance coverage?
AB BC MB NB NL NS NT NU ON PE QC SK YT
If the firm’s bonding or insurance does not cover all jurisdictions of Canada where it is seeking registration, explain why.
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This information is on the binder of insurance or on the financial institution bond.
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5.5 Bonding or insurance details
If the firm’s insurance or proposed insurance is not in the form of a financial institution bond, explain how it provides equivalent coverage to the bond.
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5.6 Professional liability insurance (Québec only)
If the firm is seeking registration in Québec as a mutual fund dealer or a scholarship plan dealer, provide the following information about the firm’s professional liability insurance:
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5.7 Directors’ resolution approving insurance
Attach a directors’ resolution confirming that the firm has sufficient insurance coverage for its securities or derivatives-related activities.
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5.8 Bonding or insurance claims
In the last seven years, has the firm made any claims against a bond or on its insurance?
Yes No
If yes, provide the following information for each claim:
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Solvency
5.9 Bankruptcy
In the last seven years, has the firm or any of its specified affiliates declared bankruptcy, made an assignment or proposal in bankruptcy, or been the subject of a petition in bankruptcy, or the equivalent in any jurisdiction?
Yes No
If yes, provide the following information for each bankruptcy or assignment in bankruptcy:
If applicable, attach a copy of any discharge, release or equivalent document.
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5.10 Appointment of receiver
In the last seven years, has the firm or any of its specified affiliates appointed a receiver or receiver manager, or had one appointed, or the equivalent in any jurisdiction?
Yes No
If yes, provide the following information for each appointment of receiver:
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Financial reporting
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5.11 Financial year-end
If the firm has not established its financial year-end, explain why.
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Provide the name of the individual auditing the financial statements and the name of the firm, if applicable. |
5.12 Auditor
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5.13 Audited financial statements
(a) Attach, for your most recently completed year, either
(i) non-consolidated audited financial statements; or
(ii) audited financial statements prepared in accordance with section 3.2(3) of NI 52-107.
(b) If the audited financial statements attached for item (a) were prepared for a period ending more than 90 days before the date of this application, also attach an interim financial report for a period of not more than 90 days before the date of this application.
If the firm is a start-up company, you can attach an audited opening statement of financial position instead.
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We may request an audit of the firm at any time while the firm is registered.
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5.14 Letter of direction to auditors
Attach a letter of direction from the firm authorizing the auditor to conduct any audit or review of the firm that the regulator may request.
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Part 6 – Client relationships
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See Part 14, Division 3 of NI 31-103 and Companion Policy 31-103CP.
For guidance regarding whether a firm will hold or have access to client assets see section 12.4 of Companion Policy 31-103CP. |
6.1 Client assets
Will the firm hold or have access to client assets?
Yes No
If yes, provide the following information for each financial institution where the trust accounts for client assets are held.
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6.2 Conflicts of interest
Does the firm have or expect to have any relationships that could reasonably result in any significant conflicts of interest in carrying out its registerable activities in accordance with securities or derivatives legislation?
Yes No
If yes, complete the following questions:
(a) Provide details about each conflict:
(b) Does the firm have policies and procedures to identify and respond to its conflicts of interest?
Yes No
If no, explain why:
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Part 7 – Regulatory action
The questions in Part 7 apply to any jurisdiction and any foreign jurisdiction. The information must be provided in respect of the last 7 years.
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7.1 Settlement agreements
Has the firm, or any predecessors or specified affiliates of the firm entered into a settlement agreement with any financial services regulator, securities or derivatives exchange, SRO or similar organization?
Yes No
If yes, provide the following information for each settlement agreement:
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7.2 Disciplinary history
Has any financial services regulator, securities or derivatives exchange, SRO or similar organization:
If yes, provide the following information for each action:
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7.3 Ongoing investigations
Is the firm aware of any ongoing investigations of which the firm or any of its specified affiliates is the subject?
Yes No
If yes, provide the following information for each investigation:
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Part 8 – Legal action
The firm must disclose offences or legal actions under any statute governing the firm and its business activities in any jurisdiction. The information must be provided in respect of the last 7 years.
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8.1 Criminal convictions
Has the firm, or any predecessors or specified affiliates of the firm been convicted of any criminal or quasi-criminal offence?
Yes No
If yes, provide the following information for each conviction:
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8.2 Outstanding criminal charges
Is the firm or any of its specified affiliates currently the subject of any outstanding criminal or quasi-criminal charges?
Yes No
If yes, provide the following information for each charge:
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8.3 Outstanding legal actions
If yes, provide the following information for each legal action:
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8.4 Judgments
If yes, provide the following information for each judgment:
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It is an offence under securities legislation and derivatives legislation, including commodity futures legislation, to give false or misleading information on this form.
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By signing below, you:
1. Certify to the regulator in each jurisdiction of Canada where the firm is submitting and filing this form, either directly or through the principal regulator, that: • you have read this form, and • to the best of your knowledge and after reasonable inquiry, all of the information provided on this form is true and complete.
2. Certify to each regulator in a non-principal jurisdiction of Canada where the firm is submitting and filing this form, either directly or through the principal regulator, that at the date of this submission: • the firm has submitted and filed all information required to be submitted and filed under the securities legislation or derivatives legislation or both of the principal jurisdiction of Canada in relation to the firm’s registration in that jurisdiction, and • this information is true and complete.
3. Authorize the principal regulator to give each non-principal regulator access to any information the firm has submitted or filed with the principal regulator under securities legislation or derivatives legislation or both of the principal jurisdiction of Canada in relation to the firm’s registration in that jurisdiction.
4. Acknowledge that the regulator may collect and provide personal information about the individuals referred to in this form under Collection and use of personal information.
5. Confirm that the individuals referred to in this form have been notified that their personal information is disclosed on this form, the legal reason for doing so, how it will be used and who to contact for more information.
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The witness must be a lawyer, notary public or commissioner of oaths. |
Witness
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Notice of collection and use of personal information
Alberta Alberta Securities Commission, Suite 600, 250–5th St. SW Calgary, AB T2P 0R4 Attention: Information Officer Telephone: (403) 297-6454 |
Nunavut Government of Nunavut Department of Justice P.O. Box 1000 Station 570 Iqaluit, NU X0A 0H0 Attention: Deputy Registrar of Securities Telephone: (867) 975-6590 |
British Columbia British Columbia Securities Commission P.O. Box 10142, Pacific Centre 701 West Georgia Street Vancouver, BC V7Y 1L2 Attention: Freedom of Information Officer Telephone: (604) 899-6500 or (800) 373-6393 (in Canada) |
Ontario Ontario Securities Commission 22nd Floor 20 Queen Street West Toronto, ON M5H 3S8 Attention: Compliance and Registrant Regulation Telephone: (416) 593-8314 e-mail: registration@osc.gov.on.ca |
Manitoba The Manitoba Securities Commission 500 - 400 St. Mary Avenue Winnipeg, MB R3C 4K5 Attention: Director of Registrations Telephone: (204) 945-2548 Fax (204) 945-0330 |
Prince Edward Island Securities Office Department of Community Affairs and Attorney P.O. Box 2000 Charlottetown, PE C1A 7N8 Attention: Deputy Registrar of Securities Telephone: (902) 368-6288 |
New Brunswick Financial and Consumer Services Commission of New Brunswick / Commission des services financiers et des services aux consommateurs du Nouveau-Brunswick Suite 300, 85 Charlotte Street Saint John, NB E2L 2J2 Attention: Director of Securities Telephone: (506) 658-3060 |
Québec Autorité des marchés financiers 800, square Victoria, 22e étage C.P. 246, tour de la Bourse Montréal (Québec) H4Z 1G3 Attention: Responsable de l’accès à l’information Telephone: (514) 395-0337 or (877) 525-0337 |
Newfoundland and Labrador Superintendent of Securities, Service NL Government of Newfoundland and Labrador P.O. Box 8700 2nd Floor, West Block Confederation Building St. John's, NL A1B 4J6 Attention: Manager of Registrations
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Saskatchewan Financial and Consumer Affairs Authority of Saskatchewan Suite 601, 1919 Saskatchewan Drive Regina, SK S4P 4H2 Attention: Deputy Director, Capital Markets Telephone: (306) 787-5871 |
Nova Scotia Nova Scotia Securities Commission Suite 400, 5251 Duke Street Halifax, NS B3J 1P3 Attention: Deputy Director, Capital Markets Telephone: (902) 424-7768 |
Yukon Government of Yukon Superintendent of Securities Department of Community Services P.O. Box 2703 C-6 Whitehorse, YT Y1A 2C6 Attention: Superintendent of Securities Telephone: (867) 667-5314 |
Northwest Territories Government of the Northwest Territories Department of Justice 1st Floor Stuart M. Hodgson Building 5009 – 49th Street Yellowknife, NWT X1A 2L9 Attention: Deputy Superintendent of Securities Telephone: (867) 920-8984 |
Self-regulatory organization Investment Industry Regulatory Organization of Canada 121 King Street West, Suite 2000 Toronto, Ontario M5H 3T9 Attention: Privacy Officer Telephone: (416) 364-6133 E-mail: PrivacyOfficer@iiroc.ca |
Submission to jurisdiction and appointment of agent for service
1. Name of person or company (the “Firm”): _____________________________________________________
2. Jurisdiction of incorporation of the person or company: __________________________________________
3. Name of agent for service of process (the "Agent for Service"): ___________________________________
4. Address for service of process on the Agent for Service: _________________________________________
______________________________________________________________________________________
______________________________________________________________________________________
Phone number of the Agent for Service: ___________________________________________________
5. The Firm designates and appoints the Agent for Service at the address stated above as its agent upon whom may be served a notice, pleading, subpoena, summons or other process in any action, investigation or administrative, criminal, quasi-criminal or other proceeding (a "Proceeding") arising out of or relating to or concerning the Firm's activities in the local jurisdiction and irrevocably waives any right to raise as a defense in any such proceeding any alleged lack of jurisdiction to bring such Proceeding.
6. The Firm irrevocably and unconditionally submits to the non-exclusive jurisdiction of the judicial, quasi-judicial and administrative tribunals of the local jurisdiction and any administrative proceeding in the local jurisdiction, in any proceeding arising out of or related to or concerning the Firm's activities in the local jurisdiction.
7. Until six years after the Firm ceases to be registered, the Firm must file
a. a new Submission to jurisdiction and appointment of agent for service in this form no later than the 10th day after the date this Submission to jurisdiction and appointment of agent for service is terminated; and
b. an amended Submission to jurisdiction and appointment of agent for service no later than the 10th day after any change in the name or above address of the Agent for Service.
8. This Submission to jurisdiction and appointment of agent for service is governed by and construed in accordance with the laws of the local jurisdiction.
Dated: ____________________________________
__________________________________________
(Signature of the Firm or authorized signatory)
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(Name and Title of authorized signatory)
The undersigned accepts the appointment as Agent for Service of (Insert name of the Firm) under the terms and conditions of the foregoing Submission to jurisdiction and appointment of agent for service.
Dated: ____________________________________
__________________________________________
(Signature of Agent for Service or authorized signatory)
__________________________________________
(Name and Title of authorized signatory)
FORM 31-103F1 CALCULATION OF EXCESS WORKING CAPITAL
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(as at ________________ with comparative figures as at ______________)
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Current period |
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Current assets
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2. |
Less current assets not readily convertible into cash (e.g., prepaid expenses)
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3. |
Adjusted current assets Line 1 minus line 2 =
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4. |
Current liabilities
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5. |
Add 100% of non-current related party debt unless the firm and the lender have executed a subordination agreement in the form set out in Appendix B of National Instrument 31-103 Registration Requirements, Exemptions and Ongoing Registrant Obligations and the firm has delivered a copy of the agreement to the regulator or, in Québec, the securities regulatory authority. See section 12.2 of National Instrument 31-103 Registration Requirements, Exemptions and Ongoing Registrant Obligations.
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6. |
Adjusted current liabilities Line 4 plus line 5 =
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7. |
Adjusted working capital Line 3 minus line 6 =
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8. |
Less minimum capital
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9. |
Less market risk
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10. |
Less any deductible under the bonding or insurance policy required under Part 12 of National Instrument 31-103 Registration Requirements, Exemptions and Ongoing Registrant Obligations
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11. |
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12. |
Less unresolved differences
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13. |
Excess working capital |
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Form 31-103F1 Calculation of Excess Working Capital must be prepared using the accounting principles that you use to prepare your financial statements in accordance with National Instrument 52-107 Acceptable Accounting Principles and Auditing Standards. Section 12.1 of Companion Policy 31-103CP Registration Requirements, Exemptions and Ongoing Registrant Obligations provides further guidance in respect of these accounting principles.
Line 5. Related-party debt – Refer to the CICA Handbook for the definition of “related party” for publicly accountable enterprises. The firm is required to deliver a copy of the executed subordination agreement to the regulator or, in Québec, the securities regulatory authority on the earlier of a) 10 days after the date the agreement is executed or b) the date an amount subordinated by the agreement is excluded from its calculation of excess working capital on Form 31-103F1 Calculation of Excess Working Capital. The firm must notify the regulator or, in Québec, the securities regulatory authority, 10 days before it repays the loan (in whole or in part), or terminates the subordination agreement. See section 12.2 of National Instrument 31-103 Registration Requirements, Exemptions and Ongoing Registrant Obligations.
Line 8. Minimum Capital – The amount on this line must be not less than (a) $25,000 for an adviser and (b) $50,000 for a dealer. For an investment fund manager, the amount must be not less than $100,000 unless subsection 12.1(4) of National Instrument 31-103 Registration Requirements, Exemptions and Ongoing Registrant Obligations applies.
Line 9. Market Risk – The amount on this line must be calculated according to the instructions set out in Schedule 1 to Form 31-103F1 Calculation of Excess Working Capital. A schedule supporting the calculation of any amounts included in Line 9 as market risk should be provided to the regulator or, in Québec, the securities regulatory authority in conjunction with the submission of Form 31-103F1 Calculation of Excess Working Capital.
Line 11. Guarantees – If the registered firm is guaranteeing the liability of another party, the total amount of the guarantee must be included in the capital calculation. If the amount of a guarantee is included in the firm’s statement of financial position as a current liability and is reflected in line 4, do not include the amount of the guarantee on line 11.
Line 12. Unresolved differences – Any unresolved differences that could result in a loss from either firm or client assets must be included in the capital calculation. The examples below provide guidance as to how to calculate unresolved differences:
(i) If there is an unresolved difference relating to client securities, the amount to be reported on Line 12 will be equal to the fair value of the client securities that are short, plus the applicable margin rate for those securities.
(ii) If there is an unresolved difference relating to the registrant's investments, the amount to be reported on Line 12 will be equal to the fair value of the investments (securities) that are short.
(iii) If there is an unresolved difference relating to cash, the amount to be reported on Line 12 will be equal to the amount of the shortfall in cash.
Please refer to section 12.1 of Companion Policy 31-103CP Registration Requirements, Exemptions and Ongoing Registrant Obligations for further guidance on how to prepare and file Form 31-103F1 Calculation of Excess Working Capital.
Management Certification
Registered Firm Name: ___________________________________________
We have examined the attached capital calculation and certify that the firm is in compliance with the capital requirements as at
______________________________.
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Schedule 1 of Form 31-103F1 Calculation of Excess Working Capital
(calculating line 9 [market risk])
For purposes of completing this form:
(1) “Fair value” means the value of a security determined in accordance with Canadian GAAP applicable to publicly accountable enterprises.
(2) For each security whose value is included in line 1, Current Assets, multiply the fair value of the security by the margin rate for that security set out below. Add up the resulting amounts for all of the securities you hold. The total is the "market risk" to be entered on line 9.
(a) Bonds, Debentures, Treasury Bills and Notes
(i) Bonds, debentures, treasury bills and other securities of or guaranteed by the Government of Canada, of the United Kingdom, of the United States of America or of any other national foreign government (provided those foreign government securities have a current credit rating described in subparagraph (i.1)) maturing (or called for redemption):
within 1 year: |
1% of fair value multiplied by the fraction determined by dividing the number of days to maturing by 365 |
over 1 year to 3 years: |
1% of fair value |
over 3 years to 7 years: |
2% of fair value |
over 7 years to 11 years: |
4% of fair value |
over 11 years |
4% of fair value |
(i.1) A credit rating from a designated rating organization listed below, from a DRO affiliate of an organization listed below, from a designated rating organization that is a successor credit rating organization of an organization listed below or from a DRO affiliate of such successor credit rating organization, that is the same as one of the following corresponding rating categories or that is the same as a category that replaces one of the following corresponding rating categories:
Designated Rating Organization |
Long Term Debt |
Short Term Debt |
DBRS Limited |
AAA
|
R-1(high) |
Fitch Ratings, Inc. |
AAA |
F1+ |
Moody’s Canada Inc. |
Aaa |
Prime-1 |
S&P Global Ratings Canada |
AAA |
A-1+ |
(ii) Bonds, debentures, treasury bills and other securities of or guaranteed by any jurisdiction of Canada and obligations of the International Bank for Reconstruction and Development, maturing (or called for redemption):
within 1 year: |
2% of fair value multiplied by the fraction determined by dividing the number of days to maturity by 365 |
over 1 year to 3 years: |
3 % of fair value |
over 3 years to 7 years: |
4% of fair value |
over 7 years to 11 years: |
5% of fair value |
over 11 years: |
5% of fair value |
(iii) Bonds, debentures or notes (not in default) of or guaranteed by any municipal corporation in Canada or the United Kingdom maturing:
within 1 year: |
3% of fair value multiplied by the fraction determined by dividing the number of days to maturity by 365 |
over 1 year to 3 years: |
5 % of fair value |
over 3 years to 7 years: |
5% of fair value |
over 7 years to 11 years: |
5% of fair value |
over 11 years: |
5% of fair value |
(iv) Other non-commercial bonds and debentures, (not in default): 10% of fair value
(v) Commercial and corporate bonds, debentures and notes (not in default) and non-negotiable and non-transferable trust company and mortgage loan company obligations registered in the registered firm’s name maturing:
within 1 year: |
3% of fair value |
over 1 year to 3 years: |
6 % of fair value |
over 3 years to 7 years: |
7% of fair value |
over 7 years to 11 years: |
10% of fair value |
over 11 years: |
10% of fair value |
Deposit certificates, promissory notes or debentures issued by a Canadian chartered bank (and of Canadian chartered bank acceptances) maturing:
within 1 year: |
2% of fair value multiplied by the fraction determined by dividing the number of days to maturity by 365 |
over 1 year: |
apply rates for commercial and corporate bonds, debentures and notes |
(c) Acceptable foreign bank paper
Deposit certificates, promissory notes or debentures issued by a foreign bank, readily negotiable and transferable and maturing:
within 1 year: |
2% of fair value multiplied by the fraction determined by dividing the number of days to maturity by 365 |
over 1 year: |
apply rates for commercial and corporate bonds, debentures and notes |
“Acceptable Foreign Bank Paper” consists of deposit certificates or promissory notes issued by a bank other than a Canadian chartered bank with a net worth (i.e., capital plus reserves) of not less than $200,000,000.
Securities of mutual funds qualified by prospectus for sale in any jurisdiction of Canada:
(i) 5% of the net asset value per security as determined in accordance with National Instrument 81-106 Investment Fund Continuous Disclosure, where the fund is a money market mutual fund as defined in National Instrument 81-102 Investment Funds; or
(ii) the margin rate determined on the same basis as for listed stocks multiplied by the net asset value per security of the fund as determined in accordance with National Instrument 81-106 Investment Fund Continuous Disclosure.
In this paragraph, “securities” includes rights and warrants and does not include bonds and debentures.
(i) On securities including investment fund securities, rights and warrants, listed on any exchange in Canada or the United States of America:
Long Positions – Margin Required
Securities selling at $2.00 or more – 50% of fair value
Securities selling at $1.75 to $1.99 – 60% of fair value
Securities selling at $1.50 to $1.74 – 80% of fair value
Securities selling under $1.50 – 100% of fair value
Short Positions – Credit Required
Securities selling at $2.00 or more – 150% of fair value
Securities selling at $1.50 to $1.99 – $3.00 per share
Securities selling at $0.25 to $1.49 – 200% of fair value
Securities selling at less than $0.25 – fair value plus $0.25 per share
(ii) For positions in securities that are constituent securities on a major broadly-based index of one of the following exchanges, 50% of the fair value:
(a) Australian Stock Exchange Limited
(b) Bolsa de Madrid
(c) Borsa Italiana
(d) Copenhagen Stock Exchange
(e) Euronext Amsterdam
(f) Euronext Brussels
(g) Euronext Paris S.A.
(h) Frankfurt Stock Exchange
(i) London Stock Exchange
(j) New Zealand Exchange Limited
(k) Stockholm Stock Exchange
(m) The Stock Exchange of Hong Kong Limited
(n) Tokyo Stock Exchange
(i) For a firm registered in any jurisdiction of Canada except Ontario:
(a) Insured mortgages (not in default): 6% of fair value
(b) Mortgages which are not insured (not in default): 12% of fair value
(ii) For a firm registered in Ontario:
(a) Mortgages insured under the National Housing Act (Canada) (not in default): 6% of fair value
(b) Conventional first mortgages (not in default): 12% of fair value
If you are registered in Ontario regardless of whether you are also registered in another jurisdiction of Canada, you will need to apply the margin rates set forth in (ii) above. |