Canada: New Regulations For Financial Products And Services – Electronic Documents

Copyright 2011, Blake, Cassels & Graydon LLP

Originally published in Blakes Bulletin on Financial Services, March 2011

On June 1, 2011, the Bank Act, the Cooperative Credit Associations Act, the Insurance Companies Act and the Trust and Loan Companies Act (the Acts) will be amended1 to allow for the use of electronic documents where any notice, document or other information is required to be provided by a federally regulated financial institution (FRFI) pursuant to the applicable Act or the related regulations (Required Notices). The Electronic Documents Regulations2 (the Regulations) for each of the Acts will also be proclaimed into force at the same time, prescribing additional requirements for the provision of Required Notices in an electronic form.

Except for Required Notices to be provided to the Minister of Finance, the Superintendent of Financial Institutions, the Commissioner of the Financial Consumer Agency of Canada or the Bank of Canada, as well as those documents subject to any specific prohibitions in an FRFI's incorporating instruments or bylaws and those statutorily required to be sent by registered mail, these new provisions and regulations will allow FRFIs to satisfy their requirements to create and provide Required Notices by creating and providing such Required Notices in electronic form.

Under the new provisions and regulations, if an electronic format is chosen, as a general matter, all Required Notices will have to be provided in plain language3. Additionally, FRFIs will be required to obtain consent (orally or in writing, in paper or electronic form) to provide Required Notices in electronic form and the recipient of such notices will have to designate an email address (or other system used to generate, send, receive, store or otherwise process an electronic document) for the receipt of the electronic documents.

Prior to obtaining written consent, the FRFI will be required to disclose the following, in writing (in paper or electronic form):

  • that consent may be revoked at any time;
  • that the recipient is responsible for notifying the FRFI of any changes to the designated information system, including changes to contact information;
  • that electronic documents will be retained for a specified period of time; and
  • when the consent takes effect.

However, if consent is being provided on a one-time basis, such rules do not apply. Consent provided in writing (in paper or electronic form) must also include the email address (or other information system) designated for receipt of the electronic document, as well as a list (in paper or electronic form) of the Required Notices that are covered by the consent. As a practical matter, an FRFI should ideally include these required disclosures, the list of documents covered and a space to designate the recipient email address on one consent form.

If the consent is provided by a person orally, the FRFI will be required to provide the person, without delay, in paper or electronic form, with all of the information outlined in the previous paragraph.

Required Notices provided in electronic form (as opposed to paper or oral form), including the consent form itself and the information outlined in the previous two paragraphs, must be accessible by the intended recipient and capable of being retained and used for subsequent reference.

Under the Regulations, consent will be revocable in writing (in paper or electronic form) or orally, at any time. Upon revocation, the FRFI will be required to provide the person with a confirmation (in paper or electronic form) specifying when the revocation of consent takes effect. If the confirmation is provided in electronic form, it must also be accessible and capable of being retained by the person for subsequent reference.

The new provisions and regulations will also prescribe requirements for the creation of statutory declarations or affidavits. Under the new provisions, a required statutory declaration or affidavit may be created in an electronic document, provided that the person making the declaration or affidavit and the authorized person before whom the declaration is made, sign it with their "secure electronic signature" (as defined in the Personal Information Protection and Electronic Documents Act).

Any other requirement for a signature in the applicable Act or Regulation will be satisfied in respect of an electronic document if the signature consists of one or more letters, characters, numbers, or other symbols in digital form incorporated in, attached to, or associated with an electronic document, and if the signature results from the application of a technology or process that proves that the signature is unique to the person, that the technology or process is used by the person to incorporate their signature into, attach it to, or associate it with the electronic document, and that the technology or process can be used to identify the person. As a practical matter, this means that, while signature requirements may be satisfied using an electronic signature, the signature process is not as simple as the mere checking of a box. An FRFI should establish a specific signature method that will be unique to each person and incorporate letters, characters, numbers or other symbols, as required by the Regulations.

Alternatively, the Regulations indicate that, in lieu of providing Required Notices electronically to individual customers, such Required Notices may be posted on, or made available through, a generally accessible electronic source, such as an FRFI's website, along with the provision to individual customers, in writing (in paper or electronic form), of a notice of the availability and location of the electronic document. Therefore, with the necessary consent, an FRFI may make a Required Notice available on its customer website and simply notify customers by email (or in writing) of its availability. If a customer has designated the secure (i.e., password-protected) area of an FRFI's website as the information system to which electronic documents should be sent, the posting of a Required Notice to such secure area would satisfy the requirement to provide the Required Notice to the customer, without additional notification being necessary.

As a precaution, when in doubt as to the receipt of an electronic document, the Regulations dictate that an FRFI must mail a paper copy of the electronic document to the intended recipient's recorded address.

Impact on Financial Institutions – Practical Application of the Regulations

The new electronic document provisions in the Acts and Regulations apply only to the creation and provision of Required Notices. Compliance with the Regulations would not satisfy any other requirements in the Acts or other regulations made under the Acts. For example, if a customer's signature was required on a Required Notice – such as a notice of uninsured deposits4 – the customer must still sign the notice, even though it may now be provided to the customer electronically.

As noted above, when obtaining or confirming consent, FRFIs must disclose that electronic documents will be retained for a specified period. No specific retention requirements have been prescribed in respect of electronic documents. The existing records retention requirements of the FRFI will apply, even if a record is in electronic form. However, FRFIs should ensure that electronic documents are retained in a format that will be accessible by the recipient for the relevant period.

The electronic documents provisions apply to any Required Notice that must be provided by an FRFI. The rules do not apply to communications or instructions made or given by customers or to communications made by an FRFI that are not required by the Acts or Regulations. The provision of communications not required by the Acts or Regulations will be governed by the existing contractual relationship between the FRFI and the customer.

Similarly, the application of the electronic documents provisions is not directly related to particular products. In determining whether to obtain a customer's consent to the receipt of electronic documents, an FRFI should consider whether it must provide that customer with any Required Notice, which may not be dependent on the type of product the customer holds. We expect that most FRFIs will seek consent from all customers to whom a Required Notice must be provided.

FRFIs that plan to take advantage of the Regulations should consider preparing standard form consent documents that can be used from June 1, including a stand-alone form of consent to send to existing customers and a form of confirmation to be sent to customers who provide their consent orally. To obtain consent from new customers going forward, standard consent wording can be added to account agreements and product terms and conditions. A form of confirmation of revocation should also be prepared for customers who request that their consent to receive electronic documents be revoked. Such FRFIs will also have to ensure that they have a process in place to identify customers who have provided the required consent or who have requested that their consent be revoked.

It is important to note that the new provisions and Regulations do not allow for the creation of "electronic-only products" (or products conditional on the customer's acceptance of all Required Notices in electronic form). Because a customer may refuse or revoke consent to the receipt of Required Notices in electronic form at any time, alternative methods for the provision of the Required Notices (for example, in writing) must still be in place.

As a final precaution, FRFIs should also continue to monitor any further changes to the Act or Regulations, and specifically to the list of Required Notices, in order to ensure that an FRFI's standard form of consent is updated accordingly to reflect any new Required Notices or other information to be covered in the consent form. Similarly, an FRFI must continue to update its consent form with the addition of each new product.

Footnotes

1 By way of the proclamation into force of An Act to amend certain Acts in relation to Financial Institutions, S.C. 2005, c. 54, sections 138, 212, 367 and 452.

2 Electronic Documents (Banks and Bank Holding Companies) Regulations, S.O.R./2010-239; Electronic Documents (Cooperative Credit Associations) Regulations, S.O.R./2010-242; Electronic Documents (Insurance and Insurance Holding Companies) Regulations, S.O.R./2010-241.Electronic Documents (Trust and Loan Companies) Regulations, S.O.R./2010-240.

3 Ex. Electronic Documents (Banks and Bank Holding Companies) Regulations, S.O.R./2010-239, s.3: "Notices, documents or other information provided...must be made in a language and presented in a manner that is clear, simple and not misleading."

4 A notice of uninsured deposits must be signed in certain circumstances by a person opening a deposit account at an authorized foreign bank, pursuant to the Notices of Deposit Restrictions (Authorized Foreign Banks) Regulations.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
Events from this Firm
16 Oct 2018, Seminar, Toronto, Canada

Join Blakes lawyers for our 10th annual overview of recent legal and regulatory developments and practical strategies to navigate the changing regulation of Canada’s payments industry.

26 Oct 2018, Other, Vancouver, Canada

Cybersecurity, including data privacy and security obligations, has become a critical chapter in every company’s risk management playbook.

30 Oct 2018, Other, Toronto, Canada

Please join us for discussions on recent updates and legal developments in pension and employee benefits as well as employment law issues.

Similar Articles
Relevancy Powered by MondaqAI
 
In association with
Related Topics
 
Similar Articles
Relevancy Powered by MondaqAI
Related Articles
 
Related Video
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
 
Email Address
Company Name
Password
Confirm Password
Position
Mondaq Topics -- Select your Interests
 Accounting
 Anti-trust
 Commercial
 Compliance
 Consumer
 Criminal
 Employment
 Energy
 Environment
 Family
 Finance
 Government
 Healthcare
 Immigration
 Insolvency
 Insurance
 International
 IP
 Law Performance
 Law Practice
 Litigation
 Media & IT
 Privacy
 Real Estate
 Strategy
 Tax
 Technology
 Transport
 Wealth Mgt
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.

Disclaimer

The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.

General

Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions