The Investment Industry Association of Canada (IIAC) and the Portfolio Management Association of Canada (PMAC) have developed a draft, standardized agreement to govern outsourcing arrangements between investment dealers and portfolio managers.
Dealers and portfolio managers can use the agreement when they enter service arrangements to serve shared clients.
The template sets out the obligations of each firm in serving clients, and aims to ensure that these arrangements adhere to guidance from the Canadian Securities Administrators.
The draft agreement covers arrangements that see investment dealers provide trade execution, custodial and account services, while portfolio managers provide investment management services and maintain books and records for clients, but do not hold any assets or execute transactions.
“The template agreement benefits member firms by streamlining and harmonizing the various agreements in use by [Investment Industry Regulatory Organization of Canada dealers and portfolio managers to create an industry standard,” states the IIAC in a newsletter published on Monday.
The draft agreement has only be released in English, a French-language edition will be issued on July 23.