Answer: While some are breathing a (small) sigh of relief as the deadline for complying with the conflict-of-interest provisions of the Client Focused Reforms has passed, it is time to consider how prepared your firm is for the next phase of the CFR amendments, coming into effect on December 31, 2021.
Some questions to ask yourself include whether:
- Any employee titles need to be changed to comply with the misleading communication requirements;
- Your firm’s current KYP policies and procedures have been documented appropriately;
- You have formalized a system to monitor the securities products on your firm’s shelf as part of the new KYP obligations;
- Your firm’s suitability determination policies and procedures have been updated to the new standard;
- Your KYC forms are compliant with the new standard (and the requirement to get the information for a trusted contact person!);
- Your Relationship Disclosure Information (RDI) contains all the required new information;
- You have a plan / deadline to provide your clients with updated RDI;
- Your Compliance Manual will include all the new policies and procedures relating to the CFRs; and
- You have scheduled employee training on the new KYC, KYP and suitability determination obligations.
We know it’s a long list, but it does not need to be an overwhelming one. AUM Law would be pleased to assist you with any or all of the above, please reach out to your usual AUM lawyer to discuss further.
August 31, 2021