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Releases Entered Into Between Dealer Members & Clients and Confidentiality Restrictions
GN-3700-21-001
Type:
Guidance Note
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IIROC Rules
Executive Summary
Effective Date: December 31, 2021
This Guidance Note sets forth the position of IIROC with respect to language that should not be included in releases entered into between Dealer Members (Dealers) and clients. This guidance is to assist Dealers in drafting these releases as to avoid using such prohibited language. Releases are generally entered into as part of the consideration in satisfaction of claims arising from client complaints concerning their accounts and client dealings with Approved Persons.1
- 1As defined in subsection 1201(2). In this guidance, all rule references are to the IIROC Rules unless otherwise specified.
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Release language
IIROC’s position in respect of the above types of releases is that releases shall not contain any language which would prevent the client from disclosing to securities regulatory authorities, self-regulatory organizations (including but not limited to IIROC) or other enforcement authorities the facts or terms of the settlement. In addition, the release shall not contain any language which prevents a client from initiating a complaint.
This limit on confidentiality clauses is necessary to allow the client the ability to initiate a compliant to the securities regulatory authorities, self-regulatory organizations or other enforcement authorities whether or not a release has been signed, to continue with any pending compliant already in progress, or to participate in any further proceedings by such authorities. IIROC may impose disciplinary action on any Dealer using such prohibited language.
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Applicable rules
IIROC Rules this Guidance Note relates to:
- section 3711, and
- section 1402.
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Previous guidance note(s)
This Guidance Note replaces MR076 – Released Entered into between Member Firms & Clients and Confidentiality Restrictions.
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Related documents
This Guidance Note was published under Notice 21-0190 - IIROC Rules, Form 1 and Guidance.