For Portfolio Managers and Portfolio Management firms, the necessity to meet Canadian Securities Administrators (CSA) regulatory requirements is essential. In July 2023, the Ontario Securities Commission issued a Staff Notice (33 755: Annual Branch Summary Report), addressing PM firm-level regulatory compliance deficiencies and concerns associated with Section 11.5 of National Instrument 31-103 Registration Requirements, Exemptions and Ongoing Registrant Obligations. The general requirement outlines that a registered firm must maintain records to accurately record its business activities, financial affairs, and client transactions, and demonstrate the extent of the firm’s compliance with applicable requirements of securities legislation. This includes maintaining an “independent” Investment Book of Record (IBOR) to ensure accurate client records and compliance. Below, we outline the key regulatory requirements and how d1g1t helps Portfolio Managers meet them efficiently.

Core Regulatory Requirements for IBOR

Per National Instrument 31-103, Portfolio Managers must:

• Maintain basic Know Your Client (KYC) information.
• Clearly define accounts and their holders.
• Record all transactions and positions within each account.
• Implement a valuation policy (Section 14.11) in alignment with CRM2.
• Calculate book costs for positions (Section 14.14.2).
• Generate client statements and regulatory reports (Sections 14.14-14.20).

While custodian information can support IBOR, Portfolio Managers cannot solely rely on it. Ontario Securities Commission (OSC) regulators have highlighted concerns where:

1. Portfolio Managers depend entirely on custodian records for client positions and trades.
2. Custodian-prepared statements are used without validating their accuracy, failing to meet independent regulatory obligations.

How d1g1t Simplifies Compliance

The d1g1t enterprise wealth management platform is designed to help Portfolio Managers meet these rigorous standards, addressing OSC’s identified concerns. With d1g1t, Wealth Management and Portfolio Management firms can leverage pre-built vendor technology, automated workflows, and processes to demonstrate compliance.

Comprehensive Record-Keeping

• Independently track cash, positions, and corporate actions.
• Maintain an auditable trail of investment decisions and trade orders.
• Reconcile client portfolio positions against external sources daily, generating exception reports for quick remediation.

Effortless Reporting and Reconciliation

• Produce client statements, CRM2 reports, and tax packages on demand.
• Automatically handle bond accruals, maturities, and corporate actions such as spin-offs or exchanges.
• Generate reconciliation reports to detect data drifts immediately.

Streamlined Risk Management

• The platform supports rigorous risk mitigation processes, enabling accurate segregation of client cash, securities, and property. This ensures daily reconciliation of all position and trade data, reducing errors and enhancing compliance.

Enhanced Compliance and Audit Trail

• Document investment recommendations directly within trade orders, tying them to KYC and suitability requirements.
• Access consolidated client profiles, goals, and investment policy statements (IPS) in one place.
• Easily extract information for audits, saving time and effort.

Why Choose d1g1t?

By using the d1g1t platform, wealth management firms gain a data-agnostic, comprehensive solution that integrates seamlessly with custodians and market data providers. This ensures compliance with securities regulations while enhancing operational efficiency.

Powered by an institutional-grade performance and risk engine, d1g1t provides on-demand analytics consistently used across integrated workflows for reporting, billing, trading, compliance, and client engagement activities. d1g1t provides advisors and their clients with the best digital experience available in the market, enabling firms to elevate the quality of their advice and demonstrate its value to clients.

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Download our Investment Book of Record (IBOR) solution sheet to discover how d1g1t can help you stay compliant, successfully pass audits, and streamline your operations