Canada is in the process of adopting new rules on the retention of electronic records by financial companies—and if affected, you may not have much time to act.

The rules are part of proposed National Instrument (NI) 31-103, which will create a new set of nationwide regulations for securities firms, such as asset managers, investment advisers, and dealers.

The first draft of NI 31-103 was published in February 2007. After receiving comments, the second draft was published earlier this year.

Although the rules aren’t yet final, it’s easy to see what kinds of requirements are coming. NI 31-103 requires a registered firm to maintain all records necessary to accurately document its business activities, financial affairs, and client transactions. These include e-mail, regular mail, and faxes.

It appears that record keeping will be required for seven years from the date of the act for “activity” records (which relate, for example, to specific purchase and sale transactions), and seven years from the date the person or company ceases to be a client of the registered firm for “relationship” records (which relate, for example, to the ongoing relationship between a firm and its customer).

Moroever, for the first two of those seven years, a firm must keep the record in a manner that permits it to be provided promptly to the regulator.

NI 31-103’s new requirements are consistent with a wider societal trend toward record keeping—and if approved by the appropriate government authorities in each jurisdiction, the law could come into force at the end of September 2009. Therefore, it would be wise to begin e-record retention now.

Many solutions are available to help you streamline your archiving process, and we can help you choose the best one for your business. Contact us for details.

Related articles:

• Financial e-record keeping law
• Tough e-mail archiving laws coming soon to Canada—and how to prepare