The purpose of this compliance bulletin is to remind you of your obligations under HUB Capital Policies and Procedures, MFDA Rules, provincial securities legislation and National Instrument 33‐109 Registration Information to notify HUB Capital of a change to any information previously submitted on the NRD (National Registration Database) within 5 business days.
HCI has procedures and controls in place such as the Annual Year End Registration Renewal Questionnaire and review of Approved Person 33‐109F4 Permanent Records as a function of its Branch Review Program; however, we continue to discover changes to information that should have been reported to HCI within the 5 business day requirement, or in the case of outside business activities, that require pre‐approval, and have not been reported to the dealer in the time required. We recently received a letter from the Ontario Securities Commission (“OSC”) bringing to our attention that we submitted late filings on 17 occasions specific to changes of employment and outside business activities in 2016. On review of the NRD submissions we noted that the majority of these filings were made as a result of changes to registration made following the review of the AP’s 33‐109F4 (NRD record) at the time the AP was audited. The OSC reminded HCI of its obligations and required explanation setting out how HCI will ensure that information is filed as required within the 5 business days.
As per HCI Policy 1.1.2(a) 5, you are required to provide full and timely disclosure as follows:
HCI has procedures and controls in place such as the Annual Year End Registration Renewal Questionnaire and review of Approved Person 33‐109F4 Permanent Records as a function of its Branch Review Program; however, we continue to discover changes to information that should have been reported to HCI within the 5 business day requirement, or in the case of outside business activities, that require pre‐approval, and have not been reported to the dealer in the time required. We recently received a letter from the Ontario Securities Commission (“OSC”) bringing to our attention that we submitted late filings on 17 occasions specific to changes of employment and outside business activities in 2016. On review of the NRD submissions we noted that the majority of these filings were made as a result of changes to registration made following the review of the AP’s 33‐109F4 (NRD record) at the time the AP was audited. The OSC reminded HCI of its obligations and required explanation setting out how HCI will ensure that information is filed as required within the 5 business days.
As per HCI Policy 1.1.2(a) 5, you are required to provide full and timely disclosure as follows:
- Within five (5) business days, report the following changes in your personal information;
- Change of address or change of name;
- Bankruptcy, garnishments, voluntary assignments or other forms of insolvency and/or any related proposals;
- Any lawsuits or complaints related or not related to business;
- Criminal charges;
- Provide our staff with all applicable information necessary to conduct business in a timely and accurate manner;
- Provide accessibility to your records during routine Compliance Audits;
- Notify a member of Compliance immediately if you learn of any potential lawsuit or complaint by a client.
With specific reference to OBAs, the pre‐approval requirement ensures that HCI and provincial securities regulators staff are able to determine whether the OBA is acceptable or a conflict of interest which should be avoided, or whether the AP requires terms and conditions on their registration. If the filings are not current and timely, it impairs staff’s ability to ensure that investors are sufficiently protected. An OBA is defined as any activity conducted by an Approved Person (paid or volunteer) outside of the Member:
- for which direct or indirect payment, compensation, consideration or other benefit is received or expected;
- involving any officer or director position and any other equivalent positions; or
- involving any position of influence.
Failure to provide timely reporting of changes to your registration may result in regulatory fines, internal discipline and/or enforcement action for undisclosed OBAs.
Please contact your Regional Compliance Officer or Branch Manager immediately if you are aware of any changes to your registration that have not been communicated or if you are not sure if your NRD record is current.
Your cooperation in providing timely notification of changes to your registration or seeking pre‐approval of OBAs is vital to you both meeting your obligations as a registrant, and HCI to meet its obligations as your dealer.
Please contact your Regional Compliance Officer or Branch Manager immediately if you are aware of any changes to your registration that have not been communicated or if you are not sure if your NRD record is current.
Your cooperation in providing timely notification of changes to your registration or seeking pre‐approval of OBAs is vital to you both meeting your obligations as a registrant, and HCI to meet its obligations as your dealer.