Compliance Memo

CM_2019-04; KYC Policy Update

For more information, contact:

Compliance Team

Date Issued:

November 15, 2019

Compliance staff has identified many client plans that are frozen and at issue is that in many cases, the plans have been frozen for some time.  A plan cannot remain frozen in perpetuity and reasonable efforts must be made to rectify the plan(s) to bring it into compliance.

Currently, our procedure is to issue a notice that the plan is frozen and then follow up by reminders until the issue is rectified to bring the plan(s) into compliance.

A client plan will be frozen in any of the following situations:

  • The plan Know-Your-Client (KYC) Information is more than 36 months old
  • The plan is missing the required document(s) or information is incomplete
  • The plan investment portfolio is inconsistent with the recorded KYC Information on file
  • The KYC information is inconsistent or unreasonable

Our current policy states that when a plan is frozen, only redemptions requested by the client are permitted.

Effective immediately, when a plan is frozen, the following additional restrictions will come into effect:

  • If there is a Limited Trading Authorization (LTA) on file, the LTA is suspended and will not be re-instated until the plan(s) is deemed compliant and unfrozen.<
  • Any trades, including redemptions must be signed by the client. A digital signature will be accepted provided it is accompanied with a KYC update.
  • In the case of redemptions, if the plan is being fully redeemed, a KYC update is not required and a digital signature will be accepted. If the plan is being partially redeemed and it is not possible to obtain an updated KYC, an original signature is required (digital signature will not be accepted).
  • If the requirements to bring the plan into compliance are not met within 40 days of freezing the plan, compliance staff will issue a letter to the client notifying them of the status of their plan(s) and requesting they contact their Financial Advisor to update their records. This will apply starting 40 days from now for all plans that are currently frozen.
  • Commissions or trailing fees will be withheld until the client plan is brought into compliance.

Recommended next steps

  1. From your Dashboard on W.Connect, review the list of client plans that are frozen.
  2. Initiate contact with each client to obtain the updated information required to bring it into compliance.
  3. If a client cannot be reached, place a note in the client’s activity folder in CRM. Detailed notes must be recorded. Once the client plan information has been updated, commissions or trailing fees will be reinstated.

As always, if you have questions or comments, contact the Compliance Department by email at