A registered company may apply a self-preservation contract or take over a custodian that is not independent, provided that the registered company or qualified custodian is: (i) a «Canadian custodian» (in the sense of NI 31-103) and (ii) establish and maintain a monitoring and monitoring system that would allow a sensible person to deal with the risks associated with the custody agreement. Such a control system would involve a separation of tasks between the retention function and other functions, as well as verification of the client`s assets by third parties. Members are expected to check the sites where they hold assets and make every effort to ensure that the relevant authorities sign the mandatory guarantee agreement with the MFDA or, failing that, execute a hedging contract with the company itself, which contains the provisions of Rule 3.3.3 (b). When a member relies on the loyalty agreement between the fund company or financial institution and the MFDA, the member must ensure that the MFDA has received the following documentation for each company with which it sanitizes the conservatory custody: a list of all deposit agreements executed is regularly published by the MFDA and can be consulted on mfda.ca/news-and-publications/custodial-agreements/. When the investment fund company or the financial institution and its respective investment products held on behalf of the member are mentioned in this listing, the member may conclude that the assets are held in an «acceptable investment position.» The area of disclosure information («RDI») is a significant change. In particular, a new subsection has been added, requiring registered companies holding client assets, having access to client assets or having «direct or arranged» liability agreements for clients, to reveal to clients where and how the client`s assets are held, as well as all the risks and benefits of those agreements. The monitoring directive on ni ni 31-103 contains specific guidance on the types of information that the CSA is likely to involve in the IDR. The custody amending services apply only to registered companies that are not members of the Investment Industry Settlement Organization of Canada («IIROC») or the Mutual Donor Association of Canada (MFDA). Instead, IIROC member companies and MFDA members will comply with IIROC or MFDA detention rules. The CSA has also put in place guidelines for investment fund managers, traders and consultants for selecting the appropriate deposit banks.

Investment fund managers are expected to demonstrate competence, diligence and diligence in selecting custodian banks. In particular, leaders are expected to enter into detailed written agreements on the law of detention and regularly review their detention rules. In situations where traders and consultants have some influence over a client`s choice of custodian, these companies should perform due diligence and be able to understand the essential conditions of the written guarantee agreement and explain to their customers. After receipt and verification of the above points, additional documents (i.e. statutes; last audited financial statements; documents supporting registration as an investment fund manager) are requested from the custodian prior to the implementation of the agreement by the MFDA. As part of the MFDA`s due diligence in verifying the custodian`s adequacy as an acceptable investment site, the MFDA will verify whether the investment fund company or financial institution has already entered into a fiduciary deposit agreement with another securities self-regulatory body.