Question of the Week: What is a trusted contact person?

Earlier this year the Canadian Securities Administrators and its members announced amendments to securities laws to enhance protection of older and vulnerable clients. These enhancements include obtaining the name and contact information of a trusted contact person (TCP) and giving registrants the ability to place a temporary hold on a transaction under certain circumstances. These enhancements come into effect on December 31, 2021, and clients may be contacted by their adviser regarding the changes.

In this post we’ll look at the TCP provision.

Under the new amendments, registrants are required to take reasonable steps to obtain the name and contact information of a TCP from their clients, as well as the client’s written consent to contact the TCP under specific circumstances. It remains up to the client to decide if they want to give the registrant this information. It is recommended but not required.

A registrant may contact a TCP under certain circumstances including:

  • inability to contact their client;

  • signs that the client may be a victim of financial exploitation; or

  • it appears the client lacks the mental capacity to make financial decisions.

When naming a TCP, it is recommended that the client choose someone that:

  • knows them well and can reliably act in their best interest;

  • does not have a vested financial interest in their affairs; and

  • does not hold a power of attorney over the client’s financial affairs.

Your TCP does not gain control of your accounts or finances. They cannot make trades using your account and cannot make financial decisions about your account. Acting as a TCP does not give this person a power of attorney, or the powers of a legal guardian, trustee or executor.

Before naming your TCP, it is recommended that you contact this person, obtain their permission, and inform them of the responsibilities that come with this role.

For more information on the collection of TCP information please see the amendments to National Instrument 31-103, Registration Requirements, Exemptions and Ongoing Registrant Obligations (NI 31-103).

Next week we’ll look at the temporary hold provision.