The Investment Dealers Association of Canada has published a position paper that establishes the criteria that would apply to both a new IDA applicant and any existing member firm that proposes to be based entirely outside Canada.

The IDA notes that it is not the intention of the paper to propose or recommend any exemptions to existing IDA rules without undertaking detailed analysis of the impact on members in terms of ensuring a level playing field under the auspices of a SRO framework and the Canadian Investor Protection Fund customer protection scheme. All IDA firms must be in full compliance with the association’s rules and regulations. Rather, the paper sets out terms and conditions that are additional requirements for any IDA firm that applies to become a Canadian non-resident.

Non-resident members are defined as a registrant that desires to have all of its directors, officers, management, sales personnel, premises, and corporate books and records permanently domiciled outside of Canada. There would be no physical presence in Canada, including any branch office.

This position paper establishes general terms and conditions that apply to any IDA firm to be a non-resident that does not have customer accounts such as an ATS registrant.

It then expands on these general terms and conditions to specifically address a nonresident IDA member that does have customer accounts. “The concern here is to address matters relating to jurisdictional implications that may arise over customer assets in the event of the firm’s insolvency and the ability for CIPF to minimize customer losses and administer customer claims,” it notes.