Update supervisory policies following regulatory changes

Understanding the obligation

A supervisory manual cannot remain static while the requirements governing the dealer change. Rule 3904(2)(iv) calls for amendments to supervision-related policies and procedures within a reasonable time after changes to CIRO requirements or securities laws.

The rule uses a reasonableness standard rather than a fixed number of days. The appropriate response will depend on the nature and effective date of the regulatory change and its implications for the dealer's activities. A change that materially affects an existing supervisory process may require more urgent attention than an amendment with no operational effect.

Requirements

• Identify changes to CIRO requirements and securities laws relevant to the firm's supervisory procedures.
• Amend supervision-related policies and procedures within a reasonable time after relevant changes.
• Keep the written procedures aligned with the obligations they are intended to address.

Practical considerations Illustrative

Implementation examples, rather than additional express requirements.

• Assign responsibility for reviewing regulatory developments and deciding whether a procedure needs amendment.
• Record the rationale where a regulatory amendment does not require a policy change.
• Coordinate policy updates with staff communications and education obligations addressed separately in Rule 3904(3).

Potential evidence Illustrative

Examples of evidence; the cited provisions may not mandate these records.

• Regulatory change assessment log
• Policy revision history and effective dates
• Approval records for revised procedures
• Records linking regulatory developments to policy amendments