On Sept. 28, the National Instrument 31-103 Registration Requirements and Exemptions – recently published by the Canadian Securities Administrators (CSA) – and various related instruments come into force. And with it, advisers dealing with “permitted clients”, a sub-set of super-accredited investors, can – with client consent - exempt themselves from engaging in a suitability and disclosure review of the investments of their clients prior to carrying out trading instructions.

To avoid potential lawsuits, advisers should ensure their clients meet the permitted-client criteria to waive the suitability review each time they execute a trade for the client, says Rebecca Cowdery, a partner in the Toronto office of Borden Ladner Gervais LLP. Before a client waives the suitability review and disclosure requirements, advisers should make sure that the client understands exactly what is at stake.

"In theory, [the waiver rule] makes sense as long as the client understands what he or she is consenting to," says Rebecca.