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Older and Vulnerable Clients

Older and Vulnerable Clients

The Canadian Securities Administrators (CSA) published final amendments in July 2021 to improve protection of older and vulnerable clients across Canada. It provided securities registrants with tools and guidance to address situations involving diminished mental capacity or financial exploitation of their clients.

The amendments to National Instrument 31-103 Registration Requirements, Exemptions and Ongoing Registrant Obligations (NI 31-103) and related changes to its companion policy came into effect on December 31, 2021.

The amendments strengthen protection of older and vulnerable clients through two main components:

  • Trusted Contact Person (TCP) – Registrants are required to take reasonable steps to obtain the name and contact information of a TCP from individual clients, and written consent for the TCP to be contacted in specified circumstances (for example, if the registrant has concerns about possible financial exploitation of a client who is vulnerable or about the client’s mental capacity to make decisions involving financial matters.) A TCP does not have authority to make transactions on the account, but is intended to be a resource to assist registrants in protecting a client’s financial interests or assets in these circumstances. While clients are not required to identify a TCP to open an account, registrants are required to take reasonable steps to obtain and update TCP information as part of the Know Your Client (KYC) process.
  • Temporary Holds – The amendments create a regulatory framework for registrants who place a temporary hold on transactions, withdrawals or transfers in circumstances where the registrant has a reasonable belief that there is financial exploitation of a vulnerable client or where there are concerns about a client’s mental capacity to make decisions involving financial matters.

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