An Ontario brokerage determines that its trust account is short by $8,000. What does O. Reg. 579/05 under TRESA require the brokerage to do?
Correct Answer
C) Notify the registrar immediately and deposit funds to cover it
O. Reg. 579/05 s. 14 provides that if a brokerage determines there is a shortfall in its trust account, it must immediately notify the registrar and deposit sufficient funds to eliminate the shortfall. The duty rests on the brokerage; 'designated broker' is not an Ontario role, and there is no 30-day grace period.
Why This Is the Correct Answer
This answer is correct because s. 14 of O. Reg. 579/05 requires the brokerage, once it determines there is a shortfall, to immediately notify the registrar and deposit enough money to eliminate the shortfall. Both steps are mandatory and immediate.
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An audit finds a $25,000 shortage in an Ontario brokerage's trust account because trust money was mixed with the brokerage's operating funds over several months. Which TRESA duty did the brokerage breach?
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