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Volume 64, No. 25

341/2021

The British Columbia Gazette,

Part II

December 31, 2021

B.C. Reg. 341/2021 , deposited December 21, 2021, under the SECURITIES ACT [section 184]. Rule of the British Columbia Securities Commission, dated December 17, 2021.

The British Columbia Securities Commission orders that

(

a) B.C. Reg. 288/2019 is amended by repealing

section 12 (

a) of

Schedule B, and

(

b) effective December 31, 2021, National Instrument 31-103 Registration Requirements, Exemptions and Ongoing Registrant Obligations , B.C. Reg. 226A/2009, is amended as set out in the attached Schedule.

— B. LEONG, British Columbia Securities Commission .

Schedule

1. National Instrument 31-103 Registration Requirements, Exemptions and Ongoing Registrant Obligations , B.C. Reg. 226A/2009, is amended as set out in this Schedule.

Section 1.1 is amended by adding the following

definitions:

"financial exploitation" means the use or control of, or deprivation of the use or control of, a financial asset of an individual by a person or company through undue influence, unlawful conduct or another wrongful act;

"temporary hold" means a hold that is placed on the purchase or sale of a security on behalf of a client or on the withdrawal or transfer of cash or securities from a client's account;

"trusted contact person" means an individual identified by a client to a registrant whom the registrant may contact in accordance with the client's written consent;

"vulnerable client" means a client who might have an illness, impairment, disability or aging-process limitation that places the client at risk of financial exploitation; .

3. Subsection 11.5 (2) is amended

(

a) by replacing paragraph (

l) with the following:

(

l) demonstrate compliance with sections 13.2, 13.2.01, 13.2.1 and 13.3; , and

(

b) by adding the following paragraph:

(

s) demonstrate compliance with

section 13.19.

4. The following

section is added:

Know your client – trusted contact person

13.2.01

(1) Concurrently with taking the reasonable steps required under subsection 13.2 (2), a registrant must take reasonable steps to obtain from the client the name and contact information of a trusted contact person, and the written consent of the client for the registrant to contact the trusted contact person to confirm or make inquiries about any of the following:

(

a) the registrant's concerns about possible financial exploitation of the client;

(

b) the registrant's concerns about the client's mental capacity as it relates to the ability of the client to make decisions involving financial matters;

(

c) the name and contact information of a legal representative of the client, if any;

(

d) the client's contact information.

(2) A registrant must take reasonable steps to keep current the information required under this section, including updating that information within a reasonable time after the registrant becomes aware of a significant change in the client's information required under subparagraph 13.2 (2) (c) (i).

(3) This

section does not apply to a registrant in respect of a client that is not an individual.

Part 13 is amended by adding the following Division:

Division 8 – Temporary Holds

Conditions for temporary hold

13.19

(1) A registered firm, or a registered individual whose registration is sponsored by the registered firm, must not place a temporary hold on the basis of financial exploitation of a vulnerable client unless the firm reasonably believes all of the following:

(

a) the client is a vulnerable client;

(

b) financial exploitation of the client has occurred, is occurring, has been attempted or will be attempted.

(2) A registered firm, or a registered individual whose registration is sponsored by the registered firm, must not place a temporary hold on the basis of a client's lack of mental capacity unless the firm reasonably believes that the client does not have the mental capacity to make decisions involving financial matters.

(3) If a registered firm or a registered individual places a temporary hold referred to in subsection (1) or (2), the firm must do all of the following:

(

a) document the facts and reasons that caused the firm or individual to place and, if applicable, to continue the temporary hold;

(

b) provide notice of the temporary hold and the reasons for the temporary hold to the client as soon as possible after placing the temporary hold;

(

c) review the relevant facts as soon as possible after placing the temporary hold, and on a reasonably frequent basis, to determine if continuing the hold is appropriate;

(

d) within 30 days of placing the temporary hold and, until the hold is revoked, within every subsequent 30-day period, do either of the following:

(

i) revoke the temporary hold;

(ii) provide the client with notice of the firm's decision to continue the hold and the reasons for that decision.

6. Subsection 14.2 (2) is amended:

(

a) by adding the following paragraph:

(1.1) a description of the circumstances under which a registrant might disclose information about the client or the client's account to a trusted contact person referred to in subsection 13.2.01 (1); , and

(

b) by adding the following paragraph:

(

p) a general explanation of the circumstances under which a registered firm or a registered individual may place a temporary hold under

section 13.19 and a description of the notice that will be given to the client if a temporary hold is placed or continued under that section.

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