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IIROC proposes rule changes for personal financial dealings

Changes have been suggested to the rules regarding financial dealings between investors in Ontario and nationwide and the individuals whom they select to manage their financial matters. The proposals come from The Investment Industry Regulatory Organization of Canada, and they are designed to give investors more flexibility in choosing trustees, executors or advisers while protecting them from possible conflicts of interest. The deadlines for unwinding certain arrangements, including power of attorneys and executorships, has been extended to June 2015 to allow the proposed changes to the personal financial dealing rules to be considered.

The proposals will make it clearer which dealings should be managed, avoided or are prohibited under the general conflicts of interest rules. The suggested changes will also make it easier for financial professionals to enter into permitted dealings with family members by streamlining the administrative process.

Investment representatives and registered representatives will still be allowed to act as a client's trustee or executor under the proposals, but strict conditions will apply and additional oversight will be implemented. The proposed amendments were published by the IIROC on April 24 after being approved at a meeting of the board of directors in March.

These rule changes are an indication of the complex and changing regulatory environment of personal financial dealings. Financial and legal professionals must stay apprised of such changes in order to provide their clients with strategies that are both beneficial and compliant. Estate planning may remain largely concerned with protecting assets and ensuring that an individual's wishes are respected, but the structure of legal instruments could change over time. A lawyer with wills and estates experience may periodically revisit a client's legal strategy as rule changes and tax code modifications are introduced. This could not only ensure that pertinent regulations are being followed, but it may also yield new options and opportunities.

Source: Advisor.ca, "Advisors could be Clients' Executors, says IIROC," April 25, 2014

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