THE 360 NEWSLETTER

As part of our efforts to promote continuous improvement and business process efficiency, please be reminded to ensure that the common deficiencies listed below are documented and addressed when processing trades. The guidance and tips below will assist you in minimizing inquiries from your Compliance Officer. 

Source of Funds (“SOF”) and Reason for Redemption (“RoR”)

Any purchase into a non-registered or TFSA plan in the amount of $50,000 or more must have the SOF documented for dealer records.

In circumstances where a bank draft or non-personalized cheque is provided for purchase, please provide adequate documentation to confirm that the monies are drawn from the client’s own bank account. In the case of third-party cheques (i.e., from an employer or the client’s personal own corporation), supplementary documentation must always be provided with a copy of the cheque/draft to imaging for dealer records.

All redemption trades with an aggregate amount of $50,000 or more, for all account types, must have the RoR documented for dealer records. As a reminder, the Order Instruction Form (Redemption) has been recently amended to include space to indicate the RoR.

Note: All SOF and RoR notes may be added as a note on the trade instruction document (e.g., Client Contact Record Form or Order Instruction Form) or by adding a note in Univeris (in OrderXPRESS or under the Plans / Details / Notes tab or the Client / Communications / Notes tab).

Suitability 

On July 1, 2021 the 15% variance as it relates to investment objective suitability was activated in Univeris. This change is visible in the PortfolioINSIGHTS Visual Suitability tool and we anticipate that everyone continues to work towards the 15% variance objective. Your Compliance Officers continue to work in collaboration with you to offer guidance and training as needed. 

As a reminder, there has been no change to the risk suitability variance in the system and the intent of the 10% risk tolerance buffer is to account for market fluctuations only.  

Where a client temporarily deviates to a more conservative/defensive strategy from their investment strategy as set out by their KYC due to market volatility or for whatever reason, we expect Representatives to document the detailed discussion and reason for the deviation, and include touchpoint discussions with the client within the year to review and amend accordingly.

When the situation seems to become more permanent, or when the reason of the deviation is no longer applicable, the Representative must touch base with the client and discuss their investment strategy (temporary or otherwise) and consider reviewing the client’s risk profile to ensure it is still accurate.