The Investment Dealers Association is proposing amendments that would update its rules regarding new client application forms.

The objective of the proposed amendment is to move away from the standardized new client application forms that it says have become outdated, and not representative of current forms in practice. Instead, the IDA will provide members with guidelines of what must and could be contained in their new client application forms.

Furthermore, because different types of accounts require different types of information, the IDA has determined that separate guidelines should be provided for retail accounts, institutional accounts and for accounts that are exempt from the suitability requirements.

“The proposed amendment will provide members with an up to date check list of what information should be included in their account opening documentation and this determination will depend on whether the client is a retail client, an institutional client or a client that is exempt from a suitability determination,” it says. “The guidelines as drafted continue to meet the requirements of the current form and provide enhancement of requirements contained elsewhere in the IDA rulebook, bulletins and notices.”

The current form was introduced in January 1996 to provide IDA members with a template that contained the minimum information required to be collected when opening up a new account for a client. The form was considered a template that firms could use but the form was not considered mandatory so long as whatever format was used contained the required information.

“The current state of the form is out of date and a standard form is no longer necessary,” it says. “The form was originally designed to be completed by a registered representative during a client meeting. Today, many of the forms are completed by clients themselves, or completed online so it is important to enable firms to use plain language descriptions of information that is essential. Today, most large firms already design their own new client application forms and most small firms have introducing / carrying agreements with other dealers who provide back office functions including, new client application forms so a standard form is not warranted.”

Comments are sought on the proposed amendments, within 30 days.