IIROC Releases Bulletin On Limitation Of Liability & Exclusionary Clauses

On October 10, 2019, the Investment Industry Regulatory Organization of Canada (IIROC) released Notice 19-0177 which outlined that certain limitation of liability and exclusionary clauses found in retail account agreements are inconsistent with the Dealer Members' regulatory obligations. Specifically, it found that some clauses are contrary to s 1402(1) of IIROC's Consolidated Rules and certain clauses are also contrary to the duty to deal fairly, honestly, and in good faith, as required by Ontario Securities Commission Rule 31–505 (see: OSC Staff Notice 33-740; OSC Staff Notice 33-747; and Kingsmont Investment Management Inc.)

The Notice is intended to be a self-assessment tool that Dealer Members can use to review their client account agreements and ensure compliance with IIROC Requirements.