CSA publishes guidance for know-your-client, know-your-product and suitability obligations

For Immediate Release
January 9, 2014

CSA publishes guidance for know-your-client, know-your-product and suitability obligations

Toronto – The Canadian Securities Administrators (CSA) today published CSA Staff Notice 31-336 Guidance for Portfolio Managers, Exempt Market Dealers and Other Registrants on the Know-Your-Client, Know-Your-Product and Suitability Obligations (Notice).

Today’s Notice is in response to a number of compliance oversight reviews where CSA staff concluded that additional guidance for registrants, such as Portfolio Managers (PMs), Exempt Market Dealers (EMDs), and other registrants who are not members of a self-regulatory organization (SRO) is required to enhance overall compliance with these important regulatory obligations.

“The know-your-client (KYC), know-your-product (KYP) and suitability obligations are among the most fundamental obligations owed by registrants to their clients and are cornerstones of the Canadian investor protection regime,” said Bill Rice, Chair of the CSA and Chair and CEO of the Alberta Securities Commission. “We strongly encourage registrants to conduct a thorough review of their current practices in the context of the guidance published today in order to ensure compliance with these obligations.”

The CSA recommends that registrants use the Notice as a self-assessment tool to improve their system of internal controls and supervision, and as a means to promote compliance and manage risk. Going forward, CSA staff will continue to closely monitor registrants’ compliance in these areas and will take appropriate regulatory action if necessary to ensure such compliance.

CSA Staff Notice 31-336 is available on various CSA member websites.

The CSA, the council of the securities regulators of Canada’s provinces and territories, co-ordinates and harmonizes regulation for the Canadian capital markets.

For more information:

Carolyn Shaw-Rimmington
Ontario Securities Commission

Mark Dickey
Alberta Securities Commission

Sylvain Théberge
Autorité des marchés financiers

Richard Gilhooley
British Columbia Securities Commission

Kevan Hannah
Manitoba Securities Commission

Wendy Connors-Beckett
Financial and Consumer Services
New Brunswick

Tanya Wiltshire
Nova Scotia Securities Commission

Janice Callbeck
PEI Securities Office
Office of the Attorney General

Don Boyles
Financial Services Regulation Div.
Newfoundland and Labrador

Rhonda Horte
Office of the Yukon Superintendent of

Louis Arki
Nunavut Securities Office

Donn MacDougall
Northwest Territories
Securities Office

Daniela Machuca
Financial and Consumer Affairs
Authority of Saskatchewan