What the client file holds
- 1. Know-your-client (KYC) & Suitability
- Calculators and Scratch Paper
- The Relationship the Rules Describe
- Clients Who Live Somewhere Else
- What KYC Has to Cover
- Tolerance, Capacity and Need
- Business Structures and Why They Change the Answer
- Writing It Down, and Having the Client Confirm It
- The Trusted Contact Person, and the Temporary Hold
- Who Owns KYC, and How Current It Has to Be
- What the Client File Holds
- Account Appropriateness
- The Account Types You Have to Compare
- What the Account-opening File Needs
- The Relationship Disclosure Document
- Keeping Confidential Information Contained
- The Welcome Package
- Product Due Diligence and Knowing the Product
- The Suitability Determination
- Unsolicited and Unsuitable Instructions
- Investment Actions
- Why Appropriateness and Suitability Are Separate Tests
- Monitoring, Triggering Events and Change
- Conflicts of Interest
- Outside Activities
- Personal Financial Dealings with Clients
- Standards of Conduct
- A Client, Worked End to End
- Twelve Ways to Lose Marks on This Element
- Fifteen Terms to Own
- One Item From CIRO's Practice Exam
Know-Your-Client (KYC) & suitability
What the client file holds
The account record is the evidence that the relationship happened properly. It holds more than the KYC answers.
| Part of the record | What it proves |
|---|---|
| Verification of identity | The firm knows who the client is |
| KYC information | The firm knows the client's circumstances, objectives and risk profile |
| Account appropriateness assessment | The account type itself fits this client |
| Acknowledgement of disclosures | The client received the documents the rules require |
| Record of a trusted contact refusal, where it happened | The firm offered the role and the client declined |
| Notes of advice and instructions | The recommendation was made, and what the client decided |
Two categories get confused, and the exam likes the confusion. is the substance: circumstances, objectives, knowledge, risk. The account record is everything, including identity verification and acknowledgements. A question that asks what belongs in the file is asking about the container. A question that asks what KYC means is asking about the contents.