This article appears in the February 2023 issue of Investment Executive. Subscribe to the print edition, read the digital edition or read the articles online.
Some technology initiatives that began following Covid-19 lockdowns have become the new way of doing business. Here’s where the financial services industry sits with five technology solutions.
Electronic wills and virtual will witnessing
For most Canadians, virtual will witnessing is here to stay — at least for a while. Ontario changed its rules to allow remote witnessing of wills in April 2021. New Brunswick passed legislation in December that removed a sunset date in its law allowing virtual will witnessing. Quebec extended a temporary ministerial order until Aug. 31 that allows will execution by video, and Alberta extended virtual witnessing until August 2024. Saskatchewan, which already allowed virtual will witnessing, recently tabled legislation to make wills valid if signed electronically by a testator before two witnesses, at least one of whom is a lawyer. British Columbia, in addition to allowing virtual witnessing, was the first province to recognize electronic wills, with that practice becoming legal Dec. 1, 2021.
Virtual disciplinary hearings
The new self-regulatory organization (SRO) will, for the time being, maintain the existing hearing practices of the Mutual Fund Dealers Association of Canada and the Investment Industry Regulatory Organization of Canada (IIROC). On the investment dealer side, in-person attendance at hearings is still limited to participants and their lawyers, while the public and media can observe remotely. For mutual fund dealers, the parties and panel determine whether a hearing will be remote or in-person, and most are held remotely. The new SRO’s enforcement division will review both policies to determine best practices, a spokesperson said.
Electronic financial reports
The Canadian Securities Administrators (CSA) is proposing to replace current delivery requirements for investment funds — including financial statements and reports of fund performance — with an “access instead of delivery” model, requiring manufacturers to post statements to a designated website, announce availability of documents in a news release and to send them to investors on request. Stakeholder comments were due on Dec. 26.
Meanwhile, feedback on the CSA’s proposals for an “access equals delivery” model for public companies — including permitting electronic delivery of a prospectus, financial statements and management discussion and analysis — was due July 6.
A group of 12 Canadian banks and life insurers recently received court approval to again hold their annual meetings in virtual or hybrid format, and to use alternative means for distributing meeting materials. While securities regulators don’t oversee shareholder meetings, the CSA released guidance last year encouraging issuers to enable participation in shareholder meetings “comparable” to what a shareholder could expect in person, such as opportunities to raise points of order, make motions and ask questions.
Electronic signatures for client agreements, contracts and consents were allowed before Covid-19, but the pandemic made them more common. IIROC updated its guidance in 2019, warning members not to use e-mail to accept client instructions and instead recommending a password-protected e-mail portal or e-signature technology to prove a document has been signed by both advisor and client. Firms must also comply with privacy and provincial e-commerce laws for certain documents, such as powers of attorney, wills or trusts, which still may require physical signatures.