CIRO Direct Registration System

On Oct. 12, CIRO issued bulletin, guidance on system requirements.

  • CIRO published Guidance note GN-4300-23-001 re Direct registration system (DRS).
  • The DRS is an electronic system that records securities held directly with an issuer.
  • Guidance describes the DRS system, explains how dealer members may be involved in the custody of securities registered in DRS, sets out the applicable CIRO requirements.
  • Parties Involved in DRS
  • The issuer of securities is entity that develops and sells securities to raise funds for its operations; issuer is ultimately responsible for the registry of outstanding positions.
  • Transfer agent, typically a trust company, maintains ledger that records DRS positions.
  • Acts on instructions from registered holders of securities under the terms of contract.
  • Regulatory Treatment
  • Guidance provided for books and records requirements for DRS as external location.
  • Dealer must assess whether issuer meets requirements to be an acceptable location.
  • Additionally, dealer member must enter into a valid custody agreement with the issuer.
  • At least monthly, must reconcile records of nominee-name DRS positions to the issuer.
  • For DRS positions that are considered in transfer, dealer members must track the aging of positions and confirm those outstanding longer than the prescribed period.
  • Effectiveness
  • The guidance note is effective on Apr. 30, 2024.

Regulators CIRO
Entity Types B/D; Corp; Depo
Reference Bul 23-0146, Gd GN-4300-23-001, 10/12/2023
Functions Compliance; Legal; Operations; Record Retention; Registration/Licensing; Risk; Technology; Trading
Countries Canada
Products Corporate; Custody; Equity; Fixed Income; Issuance/IPO; Securities
Regions Am
Rule Type Final
Rule Date 10/12/2023
Effective Date 4/30/2024
Rule Id 188039
Linked to N/A
Reg. Last Update 10/12/2023
Report Section International

Last substantive update on 10/17/2023