Sfc Client Agreement Requirements

In the FAQs, the CFS recognized that how existing client agreements could be re-exported to meet new customer agreements depended on the circumstances and could be done in different ways (e.g. B, by negative consent or by the reafing of the agreement). Intermediaries are encouraged by the CFS to seek legal advice if in doubt. In the 2013 consultation document, the CFS proposed to include the code`s adequacy condition by referring to client agreements as a contractual clause. After taking into account the respondents` views, the SFC proposes to include a new adequacy and non-derogation clause in customer agreements: the new paragraph 6.5 of the code prohibits intermediaries, clauses, provisions or clauses from being included in the customer agreement or in another document signed by the customer at the request of the intermediary or signed in a statement which: the code changes take effect on June 9, 2017. However, the CFS expects all intermediaries to immediately begin reviewing and revising their client agreements to ensure that the exercise is completed in a timely manner. The 18-month transition period is designed to take into account the circumstances in which, despite their best efforts, intermediaries face practical difficulties in re-establishing agreements with existing clients. Intermediaries are expected to complete the exercise well before the end of the transition period for all new and all customers, with the exception of a small minority of existing clients. The CFS also considered that intermediaries should not include clauses inconsistent with code requirements or that they should not mischaracterize the services actually provided to customers in customer agreements. As such, it has decided to amend the code so that customer agreements do not contain clauses or conditions under which a customer claims to recognize that there is no confidence in an intermediary recommendation. With respect to NPs, the CFS concluded that intermediaries who use them are no longer entitled to certain code exemptions, including the aptitude requirement, which is considered the cornerstone of investor protection, and other code exceptions inherent in the aptitude requirement and/or having a significant impact on investor protection. Only code exceptions, which are more administrative in nature, can remain available, provided that intermediaries have explained to the client the risks and consequences of these code exceptions and obtained their written consent.

In light of the respondents` concerns, the CFS proposes not to include the qualification requirement by reference, but to include in client agreements the following standalone contractual clause (“New Clause”): given its importance, the theme of the new CFS “character clause” (which must be included in the client contracts of financial intermediaries) has been presented in several previous editions of this review. Paragraph 15 of the code, which covers professional investors, is completely replaced. Paragraph 15 sets out the conditions for exemption from the code requirements that may apply to intermediary transactions with different categories of investors.