Effective September 28, 2009, the Canadian legislation known as National Instrument 31-103 (NI 31-103) was put into law. Introduced to consolidate categories of registration and other related requirements, it provides streamlined message retention rules and a harmonized registration regime for Canadian companies and individuals.
Canadian Companies & Individuals Needing To Register for NI 31-103
Registration for NI 31-103 is required for firms in Canada if they are in a business of trading in, or advising on investment funds. Additionally, if firms act as an underwriter or manage an investment fund, registration is also necessary. Registration applies to mutual fund dealers, scholarship plan dealers, investment dealers, exempt market dealers, restricted portfolio managers and more.
Individuals are also required to register if they trade, underwrite, or advise on behalf of a registered dealer or adviser, or act as the chief compliance officer or ultimate designated person of a registered firm. The categories included of individuals who must register are advising representative, dealing representatives, or and associated advising representative.
For both firms and individuals there are exceptions to the registration list, check the official documentation.
NI 31-103 Mandates for Record Retention & Data Security
At the heart of this legislation are defined policies for record retention (which include electronic messages such as email and instant messages). Registered firms must keep their records in a durable form that can be “promptly” searched for and provided within two years of their creation. After two years, requested records must be delivered in a “reasonable period of time.”
Registrants are expected to have an effective record system that accurately records its business activities, financial affairs and client transactions. The Canadian Securities Administrators (CSA) has required that all email that impacts a client’s account or relationship with the registrant need to be saved for seven years from its date of creation.
Client Complaints: Capture & Respond Requirements
Registered dealers and advisers outside of Quebec are required to document and respond to all complaints about the products and services they offer. The ability to capture emails with those complaints and responses is vital for NI 31-103 compliance.