Mfda Custodial Agreements

April 11, 2021

Registered companies are also required to take appropriate measures to ensure that cash and securities are held in the prescribed manner by verifying whether the cash and securities of a client or investment fund are on that client`s or investment fund`s record-keeping record. The area of disclosure information (“RDI”) is a significant change. In particular, a new subsection has been added, requiring registered companies holding client assets, having access to client assets or having “direct or arranged” liability agreements for clients, to reveal to clients where and how the client`s assets are held, as well as all the risks and benefits of those agreements. The monitoring directive on ni ni 31-103 contains specific guidance on the types of information that the CSA is likely to involve in the IDR. The CSA has also put in place guidelines for investment fund managers, traders and consultants for selecting the appropriate deposit banks. Investment fund managers are expected to demonstrate competence, diligence and diligence in selecting custodian banks. In particular, leaders are expected to enter into detailed written agreements on the law of detention and regularly review their detention rules. In situations where traders and consultants have some influence over a client`s choice of custodian, these companies should perform due diligence and be able to understand the essential conditions of the written guarantee agreement and explain to their customers. One way to consider investment products for book entry products (including investment funds, separate investment funds, guaranteed investment certificates and other deposits) distributed by an issuer or its agents as held in an acceptable place of securities is for the issuer or its representative to sign a mandatory custody contract with IIROC. The custody agreement contains the conditions under which these securities are deposited and provides that the use or sale of the securities is done without the prior consent of one of the merchant`s members and that the securities may be delivered without a request to the merchant.