The final phase of the Canadian Securities Administrators'
Client Relationship Model Project (CRM2) comes into force on July
15, 2016 when amendments to NI 31-103 Registration
Requirements, Exemptions and Ongoing Registrant Obligations
and Companion Policy 31-103CP take effect. Below are tips
for complying with three of the key changes to client reporting
Implement systems to track the actual
dollar value of all charges to the client for every transaction and
update trade confirmation reports to include this information.
Under CRM2, a registered dealer must
promptly deliver a written trade confirmation report for each
client transaction that includes the amount of each transaction
charge, deferred sales charge or other charge in respect of the
transaction, and the total amount of all charges in respect of the
Standardized trade confirmation
report templates will need to be updated to ensure that all
variations of transaction charges are accounted for where
Annual Report of Charges
Implement systems to track
information required for the new annual report on charges and other
As of July 15, 2016, registered firms
must deliver a report to clients for each 12-month period on the
charges and other firm compensation relating to the client's
account. The required information includes the firm's current
operating charges, the total amount of each type
of operating charge and transaction charge paid by the client
during the period, and the total of all operating and transaction
charges paid as well as the total amount of each type of payment
that is made to the firm by a securities issuer or another
registrant in relation to services provided to the client during
Consider implementing systems and
standardized forms that track all possible charges and payments
that might be required on an annual report. Consider tracking by
type of charge/payment and introducing KYC categories to ensure
that the charges applicable to each client's portfolio are
monitored in respect of that client's account.
New Annual Investment Performance Reports
Implement systems and standardized
forms to track and report information required by new annual
investment performance reports.
Registered dealers will be required
to report to clients every 12 months regarding the performance of
their investments over the last 12-month period, as well as the
previous three-year, five-year and 10-year periods (if applicable).
Performance reports must include the market value of all cash and
securities in the client's account at the beginning and end of
the 12-month period and the market value of all deposits, transfers
and withdrawals of cash and securities into or out of the
client's account. The report must also include the annual
change in the market value of the client's account for the
12-month period, as well as the cumulative change in the market
value since the account was opened.
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.
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