Compliance Memo

Compliance Memorandum 2012-07; Timeliness KYC Updates and Transactions

For more information, contact:

Compliance Team
compliance@gpwealth.ca

Date Issued:

November 1, 2012

Our most recent MFDA compliance exam identified issues with our adherence to the rules
relating to timely delivery and approval of KYC updates and investment transactions.

KYC Updates

MFDA Policy 2 requires that all material changes in client information [KYC], defined in Rule
2.2.4(a) as any change to the risk tolerance, time horizon or investment objectives of the client
or changes that would have a significant impact on the net worth or income of the client, must
be approved no later than one (1) business day after the date on which notice of the change in
information is received from the client.
In an effort to help head office meet this requirement, all financial advisors must submit KYC
updates to head office by a method no slower than next day courier.

Investment Transactions

National Instrument 81-102; parts 9&10 requires that investment transactions (buys, sells and
switches) obtained by a financial advisor must be transmitted to the fund company
electronically on the same business day they were received or by next day if received after
4:00pm. For example, if you meet with a client at noon on a business day, the client’s
transactions should be entered that same day on the GP Wealth Order Entry System via
FundSERV.

There are exceptions to the electronic order requirement including orders to redeem locked-in
plans under hardship exceptions, RESP redemptions to cash, HBP redemptions, etc., but
these transactions must be sent by next day courier instead.

Recording Delays

Where reasonable delays occur, of even a single day, a financial advisor must record a note
including when documents were received and why the delay occurred and submit a copy of
these notes to head office with the delayed forms.

Unexplained delays may result in trades that must be reprocessed with the proper effective
date and the cost of these corrections borne by the financial advisor.

As always, if you have any questions or comments, contact the Compliance Department by email at compliance@gpwealth.ca.