Comprehensive and Detailed 150 to 250 words of Explanation From Retail Securities/Course Guide/topics]:
A Trusted Contact Person does not receive authority to trade, access the account or make financial decisions for the client merely by being designated as the trusted contact. The RR must therefore decline the sale instruction. Written confirmation from the Trusted Contact Person would not create trading authority, and control of the account cannot be transferred to that person without valid legal authorization.
The call nevertheless raises a potentially serious capacity concern. The RR should document the information, notify the appropriate supervisory or compliance personnel and follow the Investment Dealer’s procedures for evaluating diminished financial decision-making capacity. The dealer may contact the client, verify whether a legally authorized representative exists and assess whether the regulatory conditions for a temporary hold are met.
A temporary hold is protective and does not give the Trusted Contact Person decision-making power. It may be considered where the dealer reasonably believes the client lacks the mental capacity to make decisions involving financial matters, or where the prescribed conditions concerning financial exploitation of a vulnerable client exist.
CIRO’s investor guidance expressly states that a Trusted Contact Person cannot make transactions, make decisions or access the account. The Retail Securities syllabus requires candidates to distinguish the TCP’s limited role from legal authority and to understand capacity concerns, financial exploitation and temporary holds.
