Powers of Attorney (POA), Protection Mandates (PM) and the Trusted Contact Person (TCP): What’s the Diff?
In the financial and securities industries, knowing the basics of Powers of Attorney (POA), Protection Mandates (PM) and the difference between these and a Trusted Contact Person (TCP), is an important element of knowing your client (KYC) – a fundamental principle in these industries.
You’re likely gathering information about your client’s POA and PM (Quebec) during the KYC process, and, hopefully, you’ve already started gathering information about the TCP from those client’s as well (if you haven’t, you should). The legislature and regulators intentionally made these roles different.
POAs can vary in type:
- General POA
- Limited POA
- Enduring or Continuing POA
- Springing POA
Each has specific requirements for when they should come into force.
The POA can vary from province to province which means there may be different forms and requirements. A Protection Mandate is specific to Quebec but has similar characteristics to a POA.
POAs and PMs have similar characteristics:
- Someone is appointed to represent another
- They can be used for health, property and finances
- Most of the time, they come into effect when the individual is incapacitated
In Quebec though, the PM must be deemed official.
In all cases, the person appointed is appointed to make decisions for the individual’s well-being when they are unable to.
When National Instrument 31-103 Registration Requirements, Exemptions and Ongoing Registrant Obligations and to Companion Policy 31-103CP Registration Requirements, Exemptions and Ongoing Registrant Obligations to Enhance Protection of Older and Vulnerable Clients came into effect, a new requirement was added. Registrants must now collect the name of a Trusted Contact Person.
That TCP is not a mandatory or an attorney. They’re supposed to be the person the registrant contacts if they’re concerned about financial exploitation. That TCP needs to meet certain requirements. For example, they cannot be the POA/mandatary, they must reside in the same jurisdiction, they should not have a financial interest, or be the registrant and can only be contacted during particular times.
But, it is important to note that these roles are incredibly different with differing legal responsibilities. One is intended to take effect when someone is incapable of making their own decisions and one is intended to take effect when there is some suspicion of fraud or impropriety.
Our course on Powers of Attorney (POA), Protection Mandates (PM) and the Trusted Contact Person (TCP) walks you through the differences between each of these documents, it reviews the requirements of each and what to look out for. It also gives you tips to identify diminished mental capacity and cognitive decline in your clients and when to reach out to those contacts. It’s sometimes difficult to know when it’s right to reach out and this course will help. Also, this is one of the most important roles you play as a registrant, a gatekeeper of the capital markets and protector of your client’s interests. Our course comes with a TCP form and assignment to help you conduct a spot audit of your existing client files and, we think they’re really fun and interesting continuing education courses too.