Let’s look at the hierarchy of relevant securities rules top-down:

  • Criminal Code of Canada
  • Securities Act
  • National Instruments
  • Multilateral Instruments
  • National Policies
  • Companion Policies
  • Staff Notices
  • CIRO Rules
  • CIRO Notices
  1. Criminal Code of Canada (legislation) – The Code applies to Dealer Members and registrants (such as Registered Representatives, Investment Representatives, and other Approved Persons) just as it does to any individual or corporation.

    Several provisions of the Criminal Code are especially relevant to registrants and Dealer Members due to the nature of their work. These include offences such as fraud forgery, theft, false pretences, obstruction of justice, secret commissions or bribery, and money laundering. Each of these could arise in the context of managing client accounts, handling funds, or interacting with third parties.

    If a Dealer Member or registrant is found to have committed a Criminal Code offence, they may face criminal prosecution, including fines or imprisonment. In addition, such misconduct typically triggers disciplinary action from CIRO, which may include suspension, termination, or a permanent ban from the industry. Securities regulators may also revoke a person’s registration, and clients may seek civil remedies through lawsuits for damages.

    Beyond avoiding misconduct, Dealer Members have an obligation to supervise their staff, monitor for red flags, and report suspicious transactions, particularly under anti-money laundering legislation.

  2. Securities Act (legislation) – securities acts for each province are at the top of the legal structure. Securities Acts for each province and territory in Canada are created and enacted by the respective provincial or territorial governments, and while Canadian Securities Administrators (CSA) work to harmonize and coordinate rules and policies across provinces, they do not create or enact laws.
  3. National Instruments (rules/regulations) – National Instruments are technical rules and regulations that apply uniformly across multiple Canadian provinces and territories. They cover detailed regulatory requirements, such as disclosure rules, exemptions, reporting obligations, and conduct standards. NIs are not laws themselves but have regulatory force because they are adopted by each province’s securities regulator. NIs are first created by CSA. Once drafted, the CSA releases the proposed NI for public comment and consultation. Each provincial or territorial securities commission or regulator formally adopts the NI by publishing it as a regulation or rule under their local Securities Act. After adoption, the NI becomes legally binding in that jurisdiction and enforced by the local securities regulator.
  4. Multilateral Instruments (MIs) – What happens when not all provinces are to a set of rules. A Multilateral Instruments (MIs) is the solution where regulatory rules or agreements adopted by two or more—but not all—Canadian provincial and territorial securities regulators. They are a tool used by the Canadian Securities Administrators (CSA) when there isn’t full agreement among all jurisdictions to implement a National Instrument (NI). The difference with NIs is that they only become binding in the jurisdictions that adopt it.
  5. National Policies (NP) – National Policies (NPs) are non-binding guidance documents issued by the Canadian Securities Administrators (CSA) to help interpret or apply securities laws consistently across Canada. They are not law, but they play a crucial role in providing clarity, direction, and harmonized practices for how securities regulators and market participants should approach certain rules or regulatory expectations.
  6. Companion Policies (CPs) are non-binding interpretive documents that accompany National Instruments (NIs) or Multilateral Instruments (MIs). Their purpose is to explain, clarify, and provide guidance on how to interpret and apply the rules set out in the corresponding Instrument.
  7. CSA Staff Notices – Staff Notices (also known as Staff Guidance or Staff Bulletins) are non-binding communications issued by individual securities regulators (like the Ontario Securities Commission or British Columbia Securities Commission). They are not laws or rules, but provide insight into how regulators interpret, enforce, or prioritize existing laws and rules. They help firms, registrants, and legal counsel understand how a regulator interprets a rule or requirement. They are a quick way to address emerging issues (e.g., crypto asset trading platforms, ESG disclosures, AI use).

We will review CIRO rules and notices in the applicable section. Now, let’s review the comparison of all different CSA initiated rules.