(June 6 – 16:20 ET) – The Investment Dealers Association says its member firms benefit from a new rule from the Canadian Payments Association, allowing inter-financial institution funds transfers.

The rule came into effect June 1, permitting firms to initiate the transfer of client funds from other institutions to the firm on instruction from the client. Clients will now be able to authorize a brokerage to debit their bank account to transfer funds to their brokerage account. Previously clients had to contact the financial institution directly to request the transfer.

Authorization can be given in various ways, including in writing or electronically using a password or secret code. The client and the brokerage must have an underlying agreement to carry out these transactions, but the client must still authorize each transfer. The maximum daily amount that can be transferred under the new rule is $13,500. Also the new rule can’t be used to transfer regular amounts into RESPs or to make spousal RRSP contributions, these transactions are still administered under the old rule for pre-authorized debits.