Chubb Insurance Company of Canada – Department of Financial Institutions (DFI)Page 1 of 5

Toronto – Montreal – Calgary–Vancouver

Exempt Market Dealers Association of Canada

Financial Institution Bond (FIB) Insurance Program Application

(Members Only)

PLEASE ANSWER ALL OF THE FOLLOWING INQUIRIES. IF THE COMPANY AGREES TO ISSUE A BOND, ALL OF THE INFORMATION WHICH YOU PROVIDE WILL BECOME PART OF THE BOND AND ANY MISSREPRESENTATION, OMISSION, CONCEALMENT OR ANY INCORRECT STATEMENT OF A MATERIAL FACT WILL BE GROUNDS FOR RECISSION.

A. GENERAL INFORMATION
1. / a. / Registered Firm:
b. / Address:
c. / Date Established:
d. / Web-site Address:
e. / Employee Census: / Compliance & Audit / Administrative
Trading / Total
f. / Number of Branch Locations?
g. / Is the firm publicly traded? / Yes No
h. / Please confirm all of the Applicant’s National Instrument 31-103 registration categories:
Exempt Market Dealer
Yes No / Investment Fund Manager
Yes No / Advisor
Yes No / Other
2. / Requested Limit: / Requested Deductible:
3. / a. / Applicant’s total assets: / Current Fiscal Year / Last Fiscal Year
b. / Total client assets under management (AUM)
c. / Applicant’s total revenue:
d. / Percentage of revenue attributable to the Applicant’s EMD registration:
4. / Does any shareholder, directly or beneficially, hold 5% or more of the common stock? If Yes, please provide additional details below: / Yes No
5. / Does the Applicant have any subsidiaries? If Yes, please provide a full listing, including date acquired, % ownership, total assets, & annual revenue: / Yes No
B.CLIENT INFORMATION
1. / Please complete the table below summarizing the Applicant’s client base:
# of Accounts / Market Value
Current Year / LastYear / Current Year / Last
Year
a. Individual Accounts / $ / $
b. Trusts / $ / $
c. Labour Management Plans / $ / $
d. Corporate / Institutional / $ / $
e. General / Limited Partnerships / $ / $
f. Other / $ / $
TOTAL / $ / $
2. / Asset value of largest account: / $ / Number & Asset value of accounts lost in the past 12 months: / # / $
3. / What is the minimum size of accounts accepted for new clients?
C. AUDITING PRACTICES
1. / With respect to External Audit:
a. / Has the firm made provisions for an annual audit by an outside Certified Public Accountant (CPA)? / Yes No
b. / Has the CPA rendered an unqualified opinion for each of the last three (3) years? / Yes No
c. / Has there been any change in CPA in the last three (3) years? If Yes, please explain. / Yes No
d. / Have you complied with all recommendations made as a result of your most recent audit? If No, please explain. / Yes No
2. / With respect to Internal Audit:
a. / Indicate number of full-time Employees assigned to audit department:
3. / Were all criticisms raised in the most recent Regulatory exam dealt with to the satisfaction of the applicable regulatory body? / Yes No
D. ORGANIZATION & INTERNAL CONTROLS
1. / Does the Applicant maintain written procedures covering the following:
a. / Account initiation and maintenance? / Yes No
b. / Trade initiation and trade ticket execution? / Yes No
c. / Reconciliation of all trades? / Yes No
d. / Physical custody and safekeeping? / Yes No
e. / Written Code of Ethics? / Yes No
f. / Audit and internal controls? / Yes No
2. / Based on the Canadian Securities Administrator’s definition of “Custody”, is your understanding that you are deemed to “hold, handle, or have access to client funds”? / Yes No
3. / Please detail below the controls you have in place surrounding client withdrawals. For example, does the Custodian require client backup before processing any withdrawal transactions?
4. / “In-house” Cheques:
a. / Do all cheques require dual signatures? / Yes No
If No, at what dollar amount is dual signatures required? / $
b. / Is dual control established and maintained for the handling of the reserve supply of official cheques? / Yes No
5. / Client Accounts:
a. / Is there an application form to be completed for all new clients? / Yes No
b. / What investigations or verifications are made prior to opening an account for a new client?
c. / Are requests to change client’s addresses made in writing by clients? / Yes No
d. / Are monthly account statements mailed directly to all clients? / Yes No
e. / How are clients directed to make out cheques for payment?
f. / Are written confirmations of address changes sent to both the old & new address? / Yes No
6. / What is the name of your Custodian?
7. / Does the Custodian also send out monthly account statements directly to all clients? / Yes No
8. / Are monthly Bank statements examined and reconciled by someone not authorized to deposit or withdraw? If No, please explain. / Yes No
9. / Is there dual control over company Bank accounts? / Yes No
E. LOSS EXPERIENCE
1. / Please attach a list of all losses submitted to your insurance carrier for the past six (6) years which could constitute a loss under the bond program. Check if None. / None
2. / Please summarize any litigation/legal action now pending or settled in the past three (3) years which you have reason to anticipate may be filed against the firm or any Director, Partner, Officer, or Employee.
3. / Have you any knowledge of or information concerning any occurrence or circumstance whatsoever, which might materially affect this proposal? If Yes, please explain. / Yes No

F. OTHER INFORMATION

Please attach the following information with this completed Application:
a. / Latest audited financial statements.
b / Copy of most recent regulatory inspection report and management's written response.
c. / CA Letter of Recommendation to Management & Management’s response.

The undersigned Chief Executive Officer and Chairman of the Board of Directors declare that to the best of their knowledge the statements set forth above and in any attachments hereto are true and correct and that every reasonable effort has been made to obtain sufficient information to facilitate the proper and accurate completion of this APPLICATION. The undersigned further agrees that if any significant change in the conditions of the applicant is discovered between the date of this APPLICATION and the effective date of the bond which would render this APPLICATION inaccurate or incomplete, notice of such change will be reported in writing to the COMPANY immediately and, if necessary, any outstanding quotation will be modified or withdrawn. The signing of this APPLICATION does not bind the undersigned to purchase the insurance, but it is agreed that this APPLICATION and any attachments hereto shall be the basis of the contract should a bond be issued, and this APPLICATION will be attached to and form a part of the bond.

False Information:

Any person who, knowingly and with intent to defraud any insurance company or other person, files an APPLICATION for insurance containing any false information, or conceals for the purpose of misleading, information concerning any material fact thereto, commits a fraudulent insurance act, which is a crime.

Principal entity:

Signature of Chief Executive Officer

______

Signature of Chairman of the Board of Directors

Date

A bond cannot be issued unless the APPLICATION is properly signed and dated by the Chief Executive Officer (or other Senior Officer if the Chief Executive Officer is also the Chairman of the Board of Directors) and the Chairman of the Board of Directors.

NOTE: This APPLICATION and all attachments shall be treated in strictest confidence.

For assistance completing this application, or should you have any questions about the program or coverage, please contact the broker of record:

Peter Bryant, Partner

Jones Brown Inc.

Direct: 416-408-5037

APPLICATION SUBMISSION:

To submit the completed application, please save the completed form electronically and email it to each of:

AND AND

Exempt Market Dealers Association (EMDA)Insurance Application