Submitted by nsscadmin on
Earlier this month we published a blog post about trusted contact persons (TCPs). The same amendments to securities laws that allow advisers to ask for and collect TCP information also allow advisers to place a temporary hold on a transaction under certain circumstances. This was another enhancement made to better protect older and vulnerable investors.
An adviser can place a temporary hold if:
They believe their client is being financially exploited; or
If their client appears to lack the mental capacity to make financial decisions.
Here are a couple examples of both situations.
An adviser has access to information that shows their clients may be being financially exploited by a family member. The family member appears to have taken money from the client’s retirement fund without consent. In this case the adviser may place a temporary hold on the sale of funds or a withdrawal from the account while gathering more information to determine if the client is being financially exploited.
An adviser has had a longstanding business relationship with an elderly client. During the last meeting with this client they appear to be confused and lacking the mental capacity to adequately make financial decisions. In this case the adviser may place a temporary hold on a transaction if they believe it may not be in the client’s best interest and could cause them undue harm or hardship.
If an adviser places a temporary hold, it only applies to the specific transaction and not the client’s entire account. Any transactions that are unrelated to the suspected financial exploitation or apparent lack of mental capacity will not be held.
Full information on the placing of temporary holds can be found in amendments to National Instrument 31-103, Registration Requirements, Exemptions and ongoing Registrant Obligations (NI 31-103)