Recent rule amendments promulgated by the Law Society of Upper
Canada have imposed certain "Know Your Client"
requirements on lawyers in Ontario and it is anticipated that the
Barreau du Québec will soon impose similar rules. Law
societies across Canada, which are the governing bodies of the
legal profession, are in the process of adopting similar rules. The
purpose of the new requirements, which have been encouraged by the
federal government, is to enhance public protection by assisting in
the prevention of activities such as money laundering. The
requirements are not dissimilar to, but are generally less onerous
than, the regulation in European countries that has for some time
surrounded the opening of bank accounts.
Accordingly, Davies Ward Phillips & Vineberg LLP has
implemented certain changes to our procedures, principally our file
opening and trust account procedures, in order to ensure that we
comply with our obligations as efficiently as possible while
minimizing the impact on our clients. These changes will at first
be implemented in our Toronto office and are expected to apply to
our Montréal office at a later date.
When we are retained to act on a new file, whether for a new or
an existing client, Davies will now collect certain information in
addition to the client information we already routinely obtain. For
clients that are organizations, this will normally include
information such as the clients' incorporation or business
identification number and jurisdiction of formation. For
individuals, we must also record the clients' occupation, home
address and telephone number. Pursuant to the new rules we must
also obtain this information about any third parties for whom our
client may be acting in the matter. Except to the extent relevant
information changes from time to time, it has to be obtained only
once per client.
Additional requirements may apply when the firm is engaged in or
gives instructions with respect to the payment or receipt of funds
or negotiable instruments, for example, if our trust accounts are
used in connection with a client transaction. For clients that are
organizations, we must obtain additional information, including the
name and occupation of each director and details regarding any
persons owning 25% or more of the organization or its shares. We
are also required to examine an official document confirming the
organization's existence, such as a certificate of good
standing or documents evidencing the organization's formation.
In addition to these identification requirements, we must take
reasonable steps to verify the identity of the individual client
or, in the case of an organization, of the client's
representative instructing the firm on the client's behalf.
This may involve examining an individual's identification
document (such as a driver's licence or passport) and retaining
a copy for our files. In certain instances, a third party, such as
the client's local counsel or in-house counsel, may examine
such documentation on our behalf.
Davies values its clients' privacy and we treat all client
information with the utmost care and confidentiality. While we
collect certain client information for administrative and billing
purposes and to maintain and foster client relationships, the
information and documentation we obtain in compliance with the
"Know Your Client" rules will be used solely to comply
with our professional obligations and access will be limited on a
"need to know" basis. Except where legally compelled to
do so, we will not release such documentation or any information
contained therein to any third party. For more information about
the manner in which we collect, use and disclose personal
www.dwpv.com or speak to one of our lawyers.
Further information regarding the new client identification and
verification requirements is available at The Law Society of Upper Canada. If you have
any questions regarding the processes we have in place to comply
with these requirements, please contact any one of the Davies
lawyers with whom you deal. We thank you in advance for your
understanding and cooperation.
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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