1. Interpretation of the CFRs Amendments

In the Proposed Guidance, we discuss, among other things:

• our expectations with respect to the KYC information Dealers must collect to meet our suitability determination requirements on an ongoing basis,
• our interpretation of new terms, including:
  • personal circumstances,
  • financial circumstances,
  • risk profile, and
  • investment action,
• how we expect Dealers can meet their enhanced suitability determination obligations, including how we interpret the phrase “put the client’s interest first”, and
• what we expect Dealers to do if a client refuses to provide them with KYC information.

We also clarify that if we review a suitability determination made by a Dealer or Registered Individual4, we will do so without hindsight and on the basis of what a reasonable Dealer or Registered Individual would have done under the same circumstances.

2.  KYC is not one-size-fits-all

To clarify certain issues raised by industry participants with us in the course of our work on supporting industry transformation5, we discuss:

• how Dealers should focus on collecting what KYC information they need to meet IIROC requirements (including suitability determination) and other laws applicable to them,
• examples of information Dealers may want to collect based on their business model, service offering and clients,
• different methods of KYC information collection, including the use of questionnaires and online tools, and
• the application of our suitability determination requirement to different business models.

3.  Consistency with the IIROC Rules

To reflect the updated requirements under the IIROC Rules, we made changes to:

• explain the difference between suitability determination and account appropriateness, and
• update rule references to reflect the IIROC Rules.

4. Attachments

Appendix 1 - Proposed Guidance – Know-your-client and suitability determination for retail clients

How to Submit Comments

Comments are requested on all aspects of the Proposed Guidance, including any matter which it does not specifically address. Comments on the Proposed Guidance should be in writing and delivered by August 20, 2021 to:

Member Regulation Policy
Investment Industry Regulatory Organization of Canada
Suite 2000
121 King Street West
Toronto, Ontario M5H 3T9
e-mail: memberpolicymailbox@iiroc.ca

Commentators should be aware that a copy of their comment letter will be made publicly available on the IIROC website at www.iiroc.ca.

• 4In this Notice, the term “Registered Individual” refers collectively to individuals approved by IIROC as Registered Representatives, Portfolio Managers or Associate Portfolio Managers.
• 5See Enabling the Evolution of Advice in Canada Report and IIROC’s Strategic Plan and Priorities.