The Investment Industry Regulatory Organization of Canada (IIROC) recently published the 2021 version of its bare trustee agreement. This agreement sets out the responsibilities and obligations of a bare trustee in relation to the assets held in trust for clients of IIROC-regulated firms.
A bare trustee is a type of trustee who holds legal title to assets but has no control over those assets. This is often used in the investment industry to hold securities on behalf of clients. The bare trustee agreement is an important document because it sets out the rights and obligations of the parties involved and provides clarity on the legal relationship between the trustee and the client.
The 2021 version of the bare trustee agreement contains some important updates and changes from previous versions. One notable change is the addition of provisions related to cybersecurity and data privacy. These provisions require the trustee to take reasonable steps to protect client data and to implement appropriate cybersecurity measures.
Another significant change is the inclusion of a dispute resolution process. The agreement now sets out a process for resolving disputes between the trustee and the client, including a requirement to engage in mediation before resorting to litigation.
The 2021 agreement also includes provisions related to the trustee`s liability and indemnification. It clarifies the circumstances under which the trustee may be held liable and sets out the process for seeking indemnification from IIROC.
Overall, the 2021 version of the bare trustee agreement is an important document for anyone involved in the investment industry. It provides clarity on the rights and obligations of a bare trustee and sets out important protections for clients, including provisions related to cybersecurity and dispute resolution. Anyone involved in the investment industry should be familiar with this agreement and ensure that they are in compliance with its requirements.