THE 360 NEWSLETTER

In January 2024, amendments to pre-authorized debit agreements (PADs, also referred to as PACs at Investia) will come into effect under Rule H1 from the Canadian Payments Association (CPA). The purpose of these amendments is to make pre-authorized debit agreement obligations easier to understand for payors and provide clarity around their rights.

What this means for you and your clients

• Effective January 1, 2024, all clients will be required to sign a new agreement next time they want to set up a sporadic PAD (which is the equivalent of a one-time PAC). For subsequent sporadic PADs, there is no need to have the client re-sign the form, only to document the instructions, as usual. Note that this applies to both nominee and client-name accounts. As detailed hereafter, some fund companies may require a new signed agreement for subsequent sporadic PADs.
  
  
• The term “one-time PAC” will progressively change to “sporadic PAD” on all our forms and materials (nominee and client-name systematic purchase forms, NCAFs, administrative procedures, etc.). It should be noted that for system reasons, the term will not be changed in Univeris where it will continue to show as “one-time PAC”.
  
  
• For operational and internal compliance reasons, some fund companies may request, either temporarily or permanently, that you use their own forms to set up sporadic PADs in a client-name account starting January. Investia is working in collaboration with our key partners to see if they can continue to accept our client-name Systematic Purchase Form. Until we know more, please ensure that you validate with the company to see if they will accept Investia’s form each time you set up a sporadic PAD for a client.
  
  
• For existing systematic PAC (fixed amounts at set intervals): if they remain as is, there is no action required. For a change (amount or frequency) or a new recurrent sporadic PAD (the equivalent of the existing systematic PAC), a new agreement will have to be signed, once, prior to initiating the PAD or proceeding with the change.

Recommendation
If you have a sporadic PAD that is not recurring, it can be processed as a client-name purchase with an “EFT settlement” option in OrderXPRESS if there is banking information on file (please refer to Administrative Procedure #2) or as a simple purchase if you have a client cheque. Should your PAD be a recurring one, please send the fund company a systematic instruction form, either Investia’s (if accepted, please validate with the fund company first) or the fund company form.

Note
In a nutshell, you will be required to sign the updated Systematic Purchase Instruction Form effective January 1, 2024 in the following situations:

Once the new form (which will be available on January 1, 2024) has been signed, the Representative will have the option, for any subsequent requests, of either requesting the client’s signature on the form, or documenting the request on file via a note in the “Communications” section. It should be noted that the client’s signature will always be required for any change to banking information.

Should you have any questions or require additional information, please contact our Client Services Team, by email at investia@investia.ca, by phone at 1-888-684-5548, or use the chatbot feature available on the Advisor Centre.