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Bulletin #0578-P

"Opening Your Investment Account" Information Sheet

Contact: Anna Swiader
Senior Legal & Policy Counsel
October 2, 2013
Phone: 416-943-7409

MFDA Bulletin


For Distribution to Relevant Parties within your Firm

“Opening Your Investment Account” Information Sheet

MFDA staff has prepared the attached Information Sheet “Opening Your Investment Account”
for Members and Approved Persons to provide to clients on account opening. Delivery of this
document is not mandatory but rather is a resource for Members to use at their discretion.

The Information Sheet provides a brief description of the MFDA and the MFDA Investor
Protection Corporation, and explains to clients that the information that their advisor requests
from them at account opening is required to ensure compliance with MFDA Rules, securities
legislation, and other requirements such as Anti-Money Laundering and tax legislation.

MFDA staff is providing the Information Sheet in response to Member requests for assistance in
explaining to clients why comprehensive personal and financial information is required at
account opening. The Information Sheet is a tool for Members to help explain to clients in plain
language why certain information will be collected from them.

A copy of the “Opening Your Investment Account” Information Sheet is available on the MFDA
website for reference at:

docs# 352753

hen you decide to open an account, you
About the MFDA
W and your advisor will complete a new
The Mutual Fund Dealers Association of
account application.

This application will require you to provide
organization (SRO) for mutual fund dealers in
personal information as well as ask you to make
Canada. The MFDA regulates the operations,
certain decisions about your account. Your
standards of practice and business conduct of
advisor will use this information to learn about
mutual fund dealers and their advisors with a
you and your financial needs and to meet
mandate to enhance investor protection and
regulatory obligations.
strengthen public confidence in the Canadian

This information sheet sets out the basic
mutual fund industry. For more information,
information that will be collected from you on
please visit us at
account opening and explains why it is
necessary to open and operate your account.

Suitability and Know-Your-Client
Your investments held by an MFDA Member

are covered under the MFDA Investor
Securities legislation and MFDA Rules require
that each recommendation your advisor makes
provides protection to eligible customers of
be suitable for you in relation to your
investment objectives, risk tolerance and other
MFDA Members on a discretionary basis to
personal circumstances. In order to meet this
prescribed limits if securities, cash and other
requirement, your firm and advisor need to
property held by any such Member are
understand your financial situation, investment
unavailable as a result of the Member’s
needs and objectives, and tolerance for risk.
insolvency. The IPC is sponsored by the
This is referred to as the “Know-Your-Client”
MFDA and coverage is automatic when you
(KYC) Rule under securities law. This Rule
requires your firm and advisor to collect the
become a customer of an MFDA Member.
following information from you:

investor. Coverage is in the amount of up to
Age Your date of birth will be recorded.
$1 million per customer account in respect of

the loss of customer property held by an
Annual IncomeYour approximate annual
MFDA Member. For more information, please
income from all sources.

Net WorthAn estimate of the value of
your assets less your liabilities.
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Investment ObjectivesThe specific
legislation and regulations. Your firm and
characteristics of investment products and
advisor may be restricted from opening your
how they relate to the achievement of your
account if you do not provide this information.
investment goals.

 Full Legal Name and Date of Birth
Time HorizonThis is the period from now
This is required by MFDA Rules and the
to when you will need to access a significant
portion of the money you invest in the
Laundering) and Terrorist Financing Act.
This legislation is designed to prevent the

use of the financial system for hiding
Investment KnowledgeThis is your
proceeds of criminal activity or financial
understanding of investing, investment
terrorist activity.
products, and their associated risks.

 Proof of Identity
Risk ToleranceThis is your willingness to
accept risk and your ability to withstand
This is required for certain accounts by
financial losses.
Anti-Money Laundering legislation. To

verify your identity, you may be asked to
For certain types of investment strategies, you
provide a driver’s license, citizenship card,
may be asked for more detailed information on
passport, or birth certificate.
your income, expenses, and net worth.

 Residential
Your firm and advisor will assist you in
understanding what these terms mean and how
This is required by Anti-Money Laundering
they relate to the specific investments
legislation and MFDA Rules. This
recommended to you.
information will allow your firm to contact

you to provide investment advice or notify
After you open your account, you need to notify
you of any changes with respect to your
your advisor of any significant events that may
investments. This information is also
change your investment objectives, time
required for account reporting.
horizon, investment knowledge, risk tolerance,

income and net worth. For example, your
 Citizenship
advisor needs to know about:
This is required for tax reporting and may be
 Changes to marital status
used to determine if you are permitted to
 Relocation to another province or territory
purchase certain types of securities.
 New job or job loss

 Long-term illness
 Social Insurance Number
 New debt financing
 Major increase or decrease in your financial
This is required for tax reporting.
resources, for example due to inheritance

 Signature
Other Information Requirements
This is required by Anti-Money Laundering

legislation and MFDA Rules.
In addition to information requirements under

the MFDA KYC Rule, your firm and advisor

must also comply with obligations under other

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 Employment Information
If your account is jointly owned by two or more
This is required by Anti-Money Laundering
persons, some of this information may need to
legislation and MFDA Rules in order to help
be collected with respect to each owner. If your
your firm and advisor determine suitable
account is owned through a corporation, trust or
investments for you.
other type of legal entity, there may be

additional information your advisor will need to

collect in order to operate the account and
Number of Dependants
ensure that all investments are suitable.
This is required by MFDA Rules in order to

help your firm and advisor determine
When providing this information, be as accurate
suitable investments for you.
as possible, as your firm and advisor will use

this information to understand your financial
 Politically Exposed Persons
needs and determine what investments are
This is required to meet requirements under
suitable for you. Read the application and the
Anti-Money Laundering legislation. Your
accompanying agreements and other documents
firm will need to determine whether you or a
your firm gives you carefully and ask questions
member of your immediate family have ever
about anything you do not understand.
held a position with a foreign government
that qualifies any of you as a “Politically
Exposed Person”. You can find more
information on this requirement at
Mutual Fund Dealers Association of

 Other Persons with Trading Authorization
121 King Street West, Suite 1000
on the Account/Financial Interest in the
Toronto, Ontario M5H 3T9
General Inquiries
Phone: (416) 361-6332 or 1-888-466-6332
This is required by Anti-Money Laundering

legislation and MFDA Rules. Your firm is
Prairie Regional Office
required to maintain the names, dates of
Suite 850, 800 – 6th Avenue S.W.
Calgary, Alberta T2P 3G3
birth, employment information and the
Phone: (403) 266-8826, Fax: (403) 266-8858
relationship of any individuals with trading

authority or a financial interest in your
Pacific Regional Office
650 West Georgia Street
Suite 1220, P.O. Box 11603

Vancouver, British Columbia V6B 4N9

Phone: (604) 694-8840, Fax: (604) 683-6577
Source of Funds
This is required to meet requirements under
Anti-Money Laundering legislation.

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