Compliance

Ongoing Registrant Requirements

Registered firms are subject to various ongoing requirements. The MSC conducts compliance reviews to monitor and assess whether firms are complying with the applicable requirements.

A registered firm is required to establish, maintain and apply policies and procedures that establish a system of controls and supervision (a compliance system) that:

  • provides reasonable assurance that the firm and individuals acting on its behalf comply with securities legislation, and
  • manages the business risks in accordance with prudent business practices.

It is the responsibility of each firm to determine the most appropriate compliance system for its operations. When doing so, the firm must keep in mind both the specific legal requirements they must adhere to, as well as the principles-based obligations that guide the activities and operations of the firm and its individuals.

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In addition to principles-based obligations, registered firms and individuals are governed by specific business conduct requirements contained in The Securities Act (Manitoba) and The Commodity Futures Act (Manitoba) and related rules and instruments. Some examples of key business conduct requirements for registered firms include know-your-client and suitability, marketing, disclosures, policies and procedures, and complaint handling.

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Registered firms are responsible for complying with ongoing financial requirements, which include financial reporting, maintaining sufficient working capital, and having adequate insurance coverage.

Financial Reporting Requirements

A registered firm must submit to the MSC not more than 90 days after the end of its financial year:

  • Audited annual financial statements for the financial year; and
  • A completed Form 31-103F1 Calculation of Excess Working Capital for the end of the financial year and the immediately preceding financial year.

If the firm is registered in the category of investment fund manager, a description of any NAV adjustments that occurred during the period must be submitted.

If the firm is registered in the investment fund manager category, or is registered as an exempt market dealer in addition to another category, the firm must submit the following to the MSC, not more than 30 days after the end of each financial quarter:

  • Unaudited statement of financial position and statement of comprehensive income for the three-month period;

  • A completed Form 31-103F1 Calculation of Excess Working Capital for the end of the financial quarter and the immediately preceding financial quarter; and

  • If the firm is an investment fund manager, a description of any NAV adjustments that occurred during the period.

All financial statements submitted by registered firms must be prepared in accordance with National Instrument 52-107 Acceptable Accounting Principles and Auditing Standards.

IIROC and MFDA member firms are exempt from the above financial filing requirements unless they are also registered in multiple categories, in which case the financial reporting requirements noted above may apply.

Working Capital Requirements

Registered firms must calculate their excess working capital position using Form 31-103F1 Calculation of Excess Working Capital. Firms must ensure that their excess working capital is not less than zero for two consecutive days.

If a registered firm is capital deficient, the firm must notify the MSC as soon as possible and advise the manner in which the deficiency will be corrected.

Insurance and Bonding Requirements

All registered firms must maintain bonding or insurance that contains certain specific clauses and coverage. A firm must notify the MSC immediately if there are any changes to, claims made under, or cancellation of its bonding or insurance policy.

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