THE 360 NEWSLETTER

In preparation of the new self-regulatory organization (“SRO”), and in order to be proactive regarding the regulatory requirement that we are aware of, we will be changing the investment objective suitability policy variance from 15% to 10% to meet the standard variance across the investment industry.

10% Variance

During the week of December 12, 2022, we will be changing the objective suitability variance to 10% in Univeris. This change will be visible in PortfolioINSIGHTS and in the Compliance Supervision Module within Univeris. There will be no changes made to the risk suitability variances in the system at this time.

In reviewing the client information in Univeris, we do not anticipate a substantial increase in the number of objective unsuitable accounts across the dealer. The “Unsuitable” section in the Advisor Centre Dashboard will be updated soon so you can see the list of objective unsuitable clients.

Additionally, if you process trades using the OrderXPRESS tool where the objective suitability variance exceeds 10%, a warning will appear to remind you of the objective unsuitability trade proposed for your client:

Note: Please keep in mind that Dollar Cost Averaging Fund (“DCAF”) investment strategies, or other similar strategies, will continue to appear to be “unsuitable” according to the system, until the investment strategy is completely processed. It is easy enough for the Compliance Supervisor to see the DCAF funds to know that the investment strategy is in place, but for those investment strategies that are manually being switched/rebalanced, please ensure a note is added to the “Notes” section under the “Communications” tab, with detailed information indicating the plan and DCAF investment strategy for dealer records to avoid potential future reminders/inquiries.

Effective January 1, 2023, even though 10% will be the maximum variance tolerated by Compliance, our plan is to reach this objective and work in collaboration with each of you to offer guidance and training as needed.

Here are a couple of tips to ensure efficiency while meeting regulatory requirements:

• Consider including the Investia, or other dealer approved, Investor Profile Questionnaires as a guide in discussions with your clients; and/or
• Have a robust business process in place.

This will help document the collection of the personal and financial client information needed to recommend a new, or continue with, the current, investment strategy.

As we head into RRSP season, we will look at the continued impact and consider “tightening” the suitability review and inquiry process at that time to ensure our clients are not detrimentally impacted while also meeting our regulatory obligation.

Should you have any questions, please do not hesitate to contact your Compliance Officer.