IIROC Concept Proposal –Restricted Dealer Member Proposal

October 9, 2012

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IIROC Concept Proposal –Restricted Dealer Member Proposal

Letter Summary:

The CAC believes that it is very important to distinguish between different types of retail customers. As the CAC pointed out in our February 2012 letter to the CSA regarding the Minimum Amount and Accredited Investor exemptions,we do not believe that simply “being rich” (by whatever dollar amount threshold) implies sophistication,nor do we find that sophistication can be inferred by earning a prescribed annual income.In many situations the perception that a person is “rich” or can otherwise withstand the loss of his or her investment because they meet the income or net asset test in the definition of an accredited investor in NI45-106 is false. Conversely, investors who are very sophisticated with financial education –including CFA charterholders –may not meet the specified income or asset thresholds.

Overview of the Council’s Comments:

The CAC supports the goals of IIROC and the Canadian Securities Administrators to ensure that firms carrying out brokerage activities are regulated by IIROC as Restricted Dealer Members