1. An EMD’s PPM must be a ‘living and breathing document’, so
to speak, that reflects how an EMD operates its business in a
legally compliant manner.
2. If you think after you prepare your PPM that it will sit on your
book shelf and collect dust, think again!
3. You need to constantly update your PPM to reflect changes in
securities law and your business practices.
4. Be careful not to create what you think is the ‘blue ribbon’ PPM
that does not reflect your intended business practices since
it will be the ‘roadmap’ the OSC follows when investigating/
reviewing what you actually did.
How can an EMD applicant prepare for an OSC pre-registration
Below is list of suggested practices for an OSC pre-registration
review as set out in OSC Staff Notice 33-745:
1. establish an effective compliance system prior to commencing
2. ensure that written policies and procedures adequately
address all aspects of business operations,
3. be prepared to answer detailed questions (in writing or in
person) regarding the firm’s business plan and compliance
a. products and services that will be offered,
b. business growth plans,
c. details on referral arrangements, if any,
d. supervisory structure within the context of the firm’s
e. marketing plans,
f. material business contracts, and
g. oversight for outsourced business arrangements
4. be prepared to provide,
a. the firm’s application or membership in OBSI, if
b. details regarding planned custodial arrangements,
c. copies of business plans and a firm’s PPM, and
d. copies of other information such as offering documents,
referral agreements, KYC documents, and disclosure
Firms are encouraged to:
1. compile records requested on a timely basis; and
2. perform an initial self-assessment to determine compliance
with Ontario securities law, or engage a compliance lawyer
to perform the assessment prior to registration, and rectify all
deficient areas prior to applying for registration.
What should an EMD applicant not do?
Below is list of unacceptable practices for an OSC
pre-registration review as set out in OSC Staff Notice 33-745:
Firms are encouraged to avoid the following practices:
1. conduct the following after submission of a registration
• draft the written policies and procedures manual, and
• search for possible service providers.
2. provide documents related to the registration process in
stages; complete documentation relating to the registration
application should be provided at the time of registration
including audited financial statements.
Relevance for the CCO experience requirement
We note that the points discussed above in connection with
the OSC interview process have broad application to the CCO
experience requirement as well. At least in Ontario, CCO applicants
for EMDs can expect to cover these points and to have their
answers weigh into the assessment of their relevant experience.
For more information contact:
1. In contrast, we note that the Amendments set out in the Companion
Policy certain experience requirements for advising representatives
and associate advising representatives of portfolio managers (see
also CSA Staff Notice 31-332 Relevant Investment Management
Experience for Advising Representatives and Associate Advising
Representatives of Portfolio Managers published on January 17, 2013).
2. Source: The pre-registration review process discussed above is
set out in OSC Staff Notice 33-745– Annual Summary Report
for Dealers, Advisers and Investment Fund Managers.