Posted by Anjali Kaur on Jun 16, 2022

Mutual Funds-Collecting Personal Information

In your role as a dealing representative, it is your duty to collect personal information from your client. You have an obligation to keep that information confidential. The collection, use, and disclosure of an individual’s personal information are protected by legislation.

To protect personal information, the Federal Government has the Privacy Act and the Personal Information Protection and Electronic Documents Act (PIPEDA). Other provincial privacy acts may provide additional protection for personal information.

Privacy Act

This law imposes obligations on federal government departments and agencies to respect privacy rights by limiting personal information collection, use, and disclosure.

The Privacy Act also gives individuals the right to access any personal information about themselves that these organizations hold and request correction if necessary.

Personal Information Protection and Electronic Documents Act (PIPEDA)

PIPEDA is Canada’s private sector privacy law. PIPEDA establishes rules for how federally regulated private sector organizations may collect, use, or disclose personal information. PIPEDA does not apply in provinces that have enacted similar legislation (Québec, Alberta, and British Columbia). Even where provincial legislation has been enacted, organizations’ sharing of personal information across provincial, territorial, or international borders is governed by PIPEDA.

How do PIPEDA rules apply?

PIPEDA has rules for safeguarding the personal information that you collect about your clients. Personal information must be:

  • collected for a reasonable purpose
  • collected with an individual’s consent
  • used and disclosed for the purpose for which it was collected
  • accurate
  • accessible for inspection and correction
  • stored securely

What does not apply under PIPEDA?

  • any government institution to which the Privacy Act applies
  • someone who collects uses, or discloses personal information strictly for personal purposes (for example, the collection of names and addresses for a wedding invitation list)
  • an organization that collects, uses, or discloses personal information for journalistic, artistic, or literary purposes and does not do so for any other purpose

Other Provincial Privacy Acts

Alberta, British Columbia, Québec, and Ontario (only with respect to personal health information held by health information custodians) have privacy laws that have been recognized by the Federal Government as substantially similar to PIPEDA.

When operating within one of those jurisdictions, organizations are subject to the provincial privacy legislation instead of PIPEDA, and to the authority of the provincial privacy commissioner.

What is Personal Information?

PIPEDA has rules governing what private sector organizations can do with “personal information”. The definition of “personal information” under the Act is any factual or subjective information, recorded or not, about an identifiable individual. Personal information includes:

  1. age, weight, height, name where it appears with other personal information
  2. medical records
  3. ID numbers, income, ethnic origin, blood type
  4. opinions, evaluations, comments, social status, disciplinary action
  5. employee files, credit records, loan records, disputes with a merchant, intentions (for example, to acquire goods or services, or change jobs)

It does not include:

  1. an employee’s name, title, business address, or telephone number (such as information on a business card)

Do Not Call List (DNCL)

The Canadian Radio-television and Telecommunications Commission (CRTC) has established a National Do Not Call List (DNCL) as part of its Unsolicited Telecommunications Rules. The intention of the DNCL was to give consumers the choice about whether or not to receive telemarketing calls. Telemarketing refers to unsolicited telecommunications to sell or promote a product or service.

If a person has registered a phone number on the DNCL, you are not permitted to call that person for telemarketing purposes if they have not given you express permission to do so. This prohibits you from cold-calling a possible new client, as well as former clients who have not done business with you in the last 18 months who are registered on the DNCL. You are also prohibited from cold-calling former clients who have done business with you in the last 18 months and who are registered on the dealer’s own do not call list.

You are permitted to call your existing clients or your dealer’s clients. Depending on your relationship, the client would expect to be contacted regarding investment advice, changing market conditions, or even regulatory requirements.

Canada’s Anti-Spam Legislation (CASL)

In an effort to protect consumers from unwanted electronic messages, the Government of Canada introduced legislation to deal with unsolicited commercial electronic messages, also referred to as spam. Under the Electronic Commerce Protection Act (ECPA), senders of commercial electronic messages have to obtain consent from the recipient before a message is sent. Senders must also identify themselves and allow the recipient to withdraw consent.

The legislation comes into effect on July 1, 2014.

Referral Exemption

The ECPA permits an exemption to the rule for referrals. Any person is permitted to send one commercial electronic message without consent, based on a referral by another individual with whom the sender has an existing business relationship.

Time to test

  1. Eleanor is a dealing representative with XYZ Financial. In a recent review, her branch manager suggested that she should do a better job in prospecting and attracting new clients. Eleanor has decided to devote 45 minutes each day to prospecting for new clients.

Going over her contact list, Eleanor notices the names of several former clients that she had at the previous dealer which she left two years ago. She decided that they would be good people to contact to see if she can win their business again. Eleanor begins calling her former clients.

Is this appropriate?

Answer: NO

2. Continuing with her prospecting activities, Eleanor decides to cold-call individuals who may be interested in her services. She checks to make sure that each person she calls is not listed on the National DNCL and her firm’s own do not call list.

Is this appropriate?

Answer: YES

Useful Links

DescriptionURL
Government of Canada, Justice Lawslaws-lois.justice.gc.ca/
Financial Transactions and Reports Analysis Centre of Canadafintrac-canafe.gc.ca/
The Office of the Privacy Commissioner of Canada priv.gc.ca/
CRTC’s National Do Not Call Listlnnte-dncl.gc.ca/
Canada’s Anti-Spam Legislationfightspam.gc.ca/

Thank You!

You can read more posts related to IFIC Exams:

  1. https://learnwithanjali.com/ific-exam/regulatory-environment/
  2. https://learnwithanjali.com/ific-exam/canadian-securities-administrators-csa/
  3. https://learnwithanjali.com/ific-exam/securities-regulatory-bodies-in-quebec/
  4. https://learnwithanjali.com/ific-exam/mutual-fund-legislation/

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