Investment dealer personnel will be largely banned from serving as power of attorney, trustees, or executors for clients under new rules the Investment Industry Regulatory Organization of Canada (IIROC) is introducing later this year.
The only exceptions to the restriction to the rule change the self-regulatory organization (SRO) announced on Thursday will be for employees who are related to the client. However, registered reps will be required to have their firm’s approval in these cases.
IIROC’s notice states that these changes will bring the SRO’s rules in line with the approach the Mutual Fund Dealers Association of Canada (MFDA) recently adopted. In addition, the rule also reflects the views of the Canadian Securities Administrators, which had expressed concerns about a possible different approach that IIROC was considering.
IIROC is aiming to provide dealers with certainty in this area, the notice states. The new requirement will take effect on Oct. 6, giving firms six months to unwind their existing arrangements.
The SRO recognizes that it may be difficult to unwind these arrangements in certain cases, particularly those in which the client has already died or is incapacitated and it may require a court order to comply with the new requirements. IIROC promises to work with firms on a case-by-case basis to help with these more challenging situations.
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