The Investment Industry Regulatory Organization of Canada (IIROC) on Monday published its updated Frequently Asked Questions (FAQ) document on implementing certain aspects of the Client Relationship Model (CRM2) requirements, which are slated to take effect in about six weeks.
The new FAQ deals with a variety of issues, particularly surrounding the new annual fee / charge reports that dealers must start providing to clients, effective July 15.
For example, the new FAQ indicates that forms of third-party compensation that are received by a dealer should be disclosed in the annual fee reports. However, referral fees generated for services that don’t require registration, such as to a lawyer or an accountant, don’t have to be reported, nor do outsourced back-office services.
The new FAQ also explains when compensation received for a referral for “registerable services” with another registered firm do not have to be reported, and when the annual fee reports and the new annual performance reports do not have to be issued.
Other issues that are addressed in the FAQ include calculating and reporting individual position cost information for positions acquired through a conversion or exchange feature embedded within a security, for futures contract positions.
This latest version of IIROC’s CRM2 FAQ replaces the version issued on Dec. 16, 2015.
Photo copyright: nonwarit/123RF