On December 31, 2008, the Law Society of Upper Canada (the body which regulates lawyers practicing in Ontario) enacted new rules aimed at preventing inadvertent money laundering and terrorist financing through lawyers' trust accounts. These rules are based on a model developed by the Federation of Law Societies of Canada. Similar rules have been enacted, or will soon be enacted, in all other provinces and territories of Canada.

The rules require all lawyers and paralegals licensed in Ontario to identify their clients (including existing clients) when they are retained to work on a new matter, and in certain circumstances, to verify their clients' identities.

Identification Rules

The new rules require that we obtain certain identifying information from clients for each new matter that we open on or after December 31, 2008. For individuals, we must obtain the individual's full name, home address and telephone number, occupation and, if applicable, business address and telephone number. For organizations, we must obtain the organization's full name, business address and telephone number, incorporation or business identification number and place of issue and, in some instances, a description of its business activities. We must also obtain contact information for the individuals authorized to instruct us on behalf of the organization. If you are acting as an agent for a third party, we will also need to collect this information for the third party.

For existing clients, some (or all) of this information already is in our possession.

Verification Rules

In addition, if we are involved in receiving, paying or transferring funds (including negotiable instruments and securities) on your behalf, subject to a number of exceptions, we will be required to verify your identity. Verification involves reviewing documents such as drivers' licences or birth certificates for individuals and certificates of corporate status, annual government filings or constating documents for organizations. We may also be required to obtain names, addresses and occupations of the organization's directors and of any shareholder or owner of 25% or more of the organization.

Privacy Protection

The rules also require that we maintain copies of the information we obtain. We are permitted to rely on this information in order to comply with our obligations under the rules for subsequent matters.

Any personal information that we collect in order to verify the identity of an individual will be kept in a secure database, and access will be restricted to your McMillan lawyer, his or her assistant and any other individuals who need this information in order to comply with the rules regarding client identification and verification. We will not disclose this information to others unless we are required to do so by law.

The foregoing provides only an overview. Readers are cautioned against making any decisions based on this material alone. Rather, a qualified lawyer should be consulted.

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