THE 360 NEWSLETTER

When dealing with clients, as a registrant, you are obligated to act fairly and in the best interests of the client and obligated to comply with Investia’s code of conduct and act in accordance with NI 31-103 and MFDA Rule 2.1.4.

A conflict of interest arises when the interests of different persons are incompatible or divergent.  Investia and all of its representatives must place client’s interests above self-interest.  It is essential that the highest standards of personal integrity, honesty and good faith be observed in conducting business with clients.

To address these conflicts, Investia has policies and procedures in place which strictly prohibit personal financial dealings with clients who are not family members.

Personal Financial Dealings

It is a conflict of interest for you to have any personal financial dealings with your clients as this creates the risk that you are putting your own interests ahead of your clients’ best interests. Examples of personal financial dealings with your clients include, but are not limited to:

• Borrowing from or Lending to Clients – You are prohibited from lending money to clients, borrowing money or receiving a guarantee in relation to borrowing money, or other assets, from clients.
• Private Investment Schemes with Clients – You are prohibited from investing together with clients, for instance through an investment club or in pyramid-like schemes or other questionable investments.
• Personal Involvement in Approved Outside Business Activity – Business arrangements as a partner, shareholder, director or officer of a business owned, co-owned, or controlled by a client may be permissible in certain circumstances subject to Head Office Compliance prior review and approval.
• Monetary or Non-Monetary Benefits to or from Clients – it is prohibited for you to accept cash from clients. Non-monetary benefits such as gifts or charitable donations cannot be used to circumvent guidelines and rules. All monetary and non-monetary benefits provided directly or indirectly to or received from clients should flow through Investia, with the exception of situations where the consideration is: of minimal value (does not exceed $500), infrequent, and a non-monetary nature such that it would not cause a reasonable person to question whether the interests of the client and those of Investia and yourself are inconsistent.
• Gifts and Gratuities - you and members of your immediate family may not, directly or indirectly take, accept or receive cash, bonuses, fees, commissions, gifts or charitable donations from a client. Promotional gifts, gratuities, entertainment or any other similar form of consideration may be accepted or given to a client but may not be so extensive nor so frequent as to cause a reasonable person to question whether they would improperly influence the investment advice given to a client.
• Representative Appointment as Attorney – you are prohibited from having full or partial control or authority over the financial affairs of a client (such as acting as power of attorney (“POA”), trustee or executor), except when the client is a related person of the representative, as defined by the Income Tax Act (Canada)* and the arrangement has been pre-approved by Investia.
  
  * The most common related person examples are: Blood Relationship – parent and a child (or other descendants, i.e., grandchild or great-grandchild), brother/sister, Marriage Relationship – immediate spouse, plus the spouse’s parents and siblings, Common-law Partnership – conjugal relationship, brother’s spouse, sister’s spouse (excludes the spouse’s siblings’ spouse/common-law partner).

What are your regulatory obligations?

• Representatives must always place your client’s interest above your own interests acting on the instructions of your clients. 
• Representatives’ recommendations must be based on fact and presented in an impartial way, allowing your clients to make an independent, informed decision.
• Representatives must notify Investia when a potential conflict of interest is identified and support Investia in taking the appropriate action to ensure that the conflict is addressed in the best interests of the client.

Disciplinary Proceedings Involving Personal Financial Dealings

The following is a summary of the Canadian Investment Regulatory Organization (“CIRO”) (formerly MFDA) cases involving individuals failing to disclose a conflict or a potential conflict of interest or engaging in personal financial dealings:

All cases noted above are available for viewing on the MFDA website: https://mfda.ca/enforcement/completed-cases/

For more information related to Investia’s policy, we refer you to the CPPM Chapter 10, Section III – Personal Financial Dealings.

Training – CE credits available

Investia offers training on Conflicts of Interest on the Investia Learning training platform which is available to all Representatives and their staff (licensed and unlicensed assistants).  The training module titled “CFR Module I – Conflicts of Interest” provides a review of both Investia’s and Representatives’ regulatory obligations, as well as define, identify and manage specific types of conflicts of interest. 

The following accreditation is available when the course is completed:

• Chambre de la sécurité financière: one (1) PDU in Compliance (CO);
• Institut québécois de planification financière: one (1) PDU in Compliance with Standards, Ethics and Business Conduct (SC);
• CIRO: one (1) CE credit in Business Conduct;
• Advocis: one (1) CE credit in Ethics.

Should you require additional information, please contact your Compliance Officer.