members. Accordingly, applicants for EMD firm registration
should consult with counsel prior to filing in order to obtain some
insight into whether a proposed CCO candidate has the type of
experience contemplated by the regulators. Why risk the time,
money and effort in applying to be an EMD only find out that the
CCO applicant’s experience is unacceptable?
II. OSC PRE-REGISTRATION INTERVIEWS OF EMD
Another way it will get harder to get registered as an EMD,
at least in Ontario, is that the OSC has recently introduced a
Why is the OSC doing this?
The OSC wants to ensure firm applicants, such as EMDs,
understand their obligations under Ontario securities law and
establish an adequate compliance system. In fact, the OSC is
viewing this as a firm’s first compliance review (before it is even
registered as an EMD).
As OSC Staff Notice 33-745 ( http://www.osc.gov. on.ca/en/
[t]his will allow us to focus on the firm’s fitness for registration, enhancing
the firm’s understanding of regulatory obligations prior to registration
and establishing positive communications with the registrant.
What does this mean for new EMD applicants?
This means the OSC will be asking new EMD applicants a lot
more questions about their business models and related policies
and procedures manual (PPM) during the application process and
requiring written responses and/or holding in-person interviews.
Yes, in-person interviews!
The Ultimate Designated Person and Chief Compliance
Officer of an EMD applicant better know their PPM ‘inside and
out’ and be prepared for a sit-down with OSC staff who may ask
them questions to assess their understanding of their registrant
obligations under Ontario securities law.
The broader implications of an interview process should be
considered by applicants. For example, the OSC has not previously
required EMD applicants to submit their PPM as part of the registration
application process. However, the OSC might now request a copy
of the PPM, or sections of it, in order to test interviewees on their
knowledge of their own policies and procedures.
EMD applicants are at some risk if they use a template PPM
obtained from another firm or from a consultant without reviewing
and tailoring it to their particular operations. In fact, if an EMD
applicant is not sure about its legal obligations, it should contact
an experienced securities registration lawyer.