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Know Your Client: A Quick Overview



 

It is important that investors understand why dealing representatives must collect personal information.

 

The Know Your Client (KYC) requirement is the regulatory standard used in investment services industry to verify customers and their risk and financial profiles as well as meet the legal requirements of Anti- Money Laundering (AML) Laws. To meet these requirements a dealing representative must gather information about you in order to determine whether a potential recommendation is suitable for you.

 

Your full name, address, contact Information:

  • Basic information required to administer your account and help confirm your identity.

  • Nicknames should not be used

 

Date of Birth:

  • Used to aid in confirming your identity

  • Consideration in determining suitability of any recommendations

 

Social Insurance Number:

  • Needed for tax reporting purposes for investments that pay income, and

  • Can be used to ascertain identity under AML requirements

 

Occupation and Employer:

  • Assists in understanding of your personal circumstances

  • Supports source of Net Worth in compliance with AML requirements

 

Spouse’s name, occupation and employer:

  • Assists in understanding of household circumstances

  • Supports source of Net Worth in compliance with AML requirements

 

Number of dependants:

  • Useful in determining suitability and cash flow needs

 

Investment Knowledge and Experience:

  • Helps Dealing Representative understand your level of Investment Experience, Risk Tolerance & Capacity and the level of reliance the investor places on the advice given

 

Income, Spouse’s Income and Net Worth, Financial Assets:

  • Assists with suitability determination.

  • Assists in understanding and determination financial circumstances for purposes of suitability

  • Assists with determination of available prospectus exemptions

 

Time Horizon:

  • Assists with suitability determination and liquidity needs

 

Investment Objectives:

  • Assist with suitability determination.

  • Required by Law

 

Risk Profile

  • Questions may be asked to help your representative better asses your Risk Tolerance and Risk Capacity. Risk Tolerance is your willingness to accept risk and Risk Capacity is your financial ability to accept risk.

 

In Summary, the above is not conclusive of all the requirements to fulfill a Representatives obligation but should be part of the initial conversations to aid in meeting the regulatory and legal Know Your Client requirements placed on your Representative and the Dealer. For your benefit any changes to the information should be discussed promptly with your Representative.

 

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