The Investment Industry Regulatory Organization of Canada, commonly known as IIROC, has recently released a new bare trustee agreement for the year 2019. This agreement is designed to provide clarity and guidance surrounding the relationship between a bare trustee and its clients.

A bare trustee is a legal arrangement in which a trustee holds and manages assets for the benefit of a beneficiary, but has no involvement in the management or decision-making regarding those assets. The new IIROC agreement aims to establish a comprehensive framework for the use of bare trustees in the investment industry.

One of the key components of the agreement is the requirement for bare trustees to establish clear and transparent communication channels with their clients. This includes providing regular updates and reports on the status of assets, as well as responding promptly to client inquiries and concerns.

The agreement also outlines the specific responsibilities of each party involved in the bare trustee relationship. For example, the trustee is required to exercise a high standard of care and must act in the best interests of the beneficiary at all times. Meanwhile, the beneficiary is responsible for providing accurate and complete information to the trustee and must comply with all legal and regulatory requirements.

Another important aspect of the agreement is the requirement for bare trustees to maintain appropriate insurance coverage. This is intended to protect both the trustee and the beneficiary in the event of any unforeseen circumstances or liabilities.

Overall, the new IIROC bare trustee agreement for 2019 is a welcome development in the investment industry. By establishing clear guidelines and expectations for bare trustees and their clients, it should help to promote greater transparency, accountability, and trust in these important relationships.