IIAC RESPONDS TO IIROC PROPOSED GUIDANCE: KNOW-YOUR-CLIENT AND SUITABILITY DETERMINATION FOR RETAIL CLIENTS
On August 20th, 2021, the IIAC submitted a comment letter to IIROC on its proposed Guidance which sets out IIROC’s expectations and suggested acceptable practices related to the know-your-client (KYC) and suitability determination obligations in the IIROC Rules. It is intended to conform to similar guidance matters by the Canadian Securities Administrators (CSA) in its Companion Policy 31-103CP - Registration Requirements, Exemptions and Ongoing Registrant Obligations.
We are pleased that IIROC has continued to emphasize there is not a “one size fits all” approach to dealers satisfying their regulatory obligations under IIROC Rules, and that consideration must be given to dealers having different business models, distinct services and products, and different relationships with clients. We have emphasized the need for this flexibility.
Our response is aimed at keeping KYC and suitability obligations, and the accompanying documentation, proportionate to the nature of the relationship with the client and the product, including where a client has accounts in separate business lines at the same dealer. Like the CSA, we have recognized that clients may choose to offer householding for suitability purposes, which we appreciate may be a client preference.
Our response is also aimed at ensuring the obligations of OEO dealers remain consistent with their category of registration.
For information, please contact Michelle Alexander or Adrian Walrath.