EXEMPT MARKET DEALERS MANDATORY
On September 28, 2009, the Canadian Securities Administrators implemented National
DEALER FIB INSURANCE
Instrument 31-103. “NI 31-103” introduced new regulatory requirements for securities
dealers, advisors and fund managers. As part of the requirements, EMD firms must have
Financial Institution Bond (“FIB”) insurance coverage.
In March 2010, the Exempt Market Dealers Association of Canada (the EMDA) established a
• A $25,000 limit for "Audit Expense" coverage for the costs associated with retaining an
group financial institution bond (FIB) insurance program underwritten by CHUBB Insurance
Company of Canada (the EMDA Insurance Program) that offers its members preferred
group rates and coverage. As part of the EMDA Insurance Program, the following coverage
extensions are provided at no additional cost to EMDA members:
• Revised "manifest intent" wording under the "Fidelity/Employee Dishonesty" insuring
agreement that provides a marked improvement from the standard FIB wording;
expert to determine the amount of a loss (e.g., hiring a forensic accountant to determine
the quantum of a loss);
• "Computer Systems Fraud" coverage for loss resulting from a fraudulent entry of
electronic data or computer programming within a covered computer system;
• Coverage for "Voice" and "Facsimile" initiated fraudulent transfers of funds;
• "Extortion" coverage for threats to persons and property of the insured;
• "Designated Representative Rider," which means that a loss has not technically been
discovered by an insured until it is known to their designated insurance contact. This
can help eliminate the insurer’s ability to deny a claim based on untimely reporting
to the insurer if they believe it was known to the insured and not reported within the
necessary reporting time periods; and
• "Stop Payment Order" coverage extension providing coverage for a loss that the insured
EMD is liable to pay due to a failure to comply with a customer's request to stop
payment on a cheque or other form of negotiable instrument.
Toll Free: 1.877.451.0448
Direct Line: 416. 408.5037
Direct Line: 416. 408.5455
1100-480 University Ave.
Toronto, ON M5G 1V2
Suite 800, 639-5th Ave. S.W.
Calgary, AB T2P OM9
Suite 805, 609 Granville St.
Vancouver, BC V7Y1G5
Exempt Market Dealers
Association of Canada
Does Your Insurance Meet National Instrument 31-103 Requirements?