← All terms
Regulatory

NI 31-103 Section 13.2 (KYC Content)

The NI 31-103 provision prescribing the specific client information a registrant must collect as part of Know Your Client.

Take the free diagnostic

Definition

Section 13.2 of NI 31-103 sets out the minimum KYC content that a registered dealer or adviser must collect and keep current for each client: the client's identity, the name and contact information of any person who is to have trading authority over the account, whether the client is an insider of a reporting issuer, the client's investment needs and objectives, time horizon, risk tolerance, and current financial circumstances including net worth, income, employment, and existing financial obligations. After the 2021 Client Focused Reforms amendments, the list of required KYC elements was made more explicit and now includes risk capacity as a distinct item alongside risk tolerance. The companion policy (31-103CP) provides guidance on how to collect and assess each element. KYC information must be updated whenever a registrant becomes aware of a change in the client's circumstances and, for managed accounts, at minimum annually.

Source

National Instrument 31-103 s.13.2; Companion Policy 31-103CP s.13.2; CSA Notice 31-336

Where this shows up on the CIRE

  • Outcome 3.1
  • Outcome 3.2

Test yourself

Two real CIRE-bank questions on this exact outcome. Click to reveal the answer and the rule citation.

  1. 1

    A new client, age 68, indicates she is retired and relies on her investment portfolio for monthly income. She describes her risk tolerance as 'low.' Her registrant recommends a portfolio of 90% equity growth funds on the basis that equities outperform over the long term. Which KYC principle is most clearly violated?

    Outcome 3.1 · click for answer

    A.The identity verification requirement under NI 31-103, because the registrant did not confirm the client's date of birth.
    B.The suitability obligation, because the recommendation is inconsistent with the client's stated risk tolerance, investment objectives, and income needs.Correct
    C.The product due diligence obligation, because equity growth funds are not approved for retail distribution.
    D.The account opening requirement, because the client's age disqualifies her from holding equity products.

    NI 31-103 and CIRO rules require that recommendations be suitable having regard to the client's KYC profile, including risk tolerance, investment objectives, time horizon, and financial circumstances. A 90% equity allocation for a retired client with low risk tolerance and income dependency is inconsistent with those KYC factors on its face, triggering a suitability violation. There is no age restriction on holding equities, and equity growth funds are not categorically prohibited for retail clients.

  2. 2

    Under NI 31-103, a registrant must take reasonable steps to keep KYC information current. Which event most clearly triggers an obligation to update KYC before making a new recommendation?

    Outcome 3.2 · click for answer

    A.The client's account has been open for exactly 12 months.
    B.The client discloses a significant life change, such as the loss of employment, that materially affects their financial situation.Correct
    C.The client requests a copy of their account statement.
    D.The registrant changes branch locations within the same dealer member.

    NI 31-103 requires registrants to take reasonable steps to keep KYC information current and to update it when they become aware of a material change in the client's circumstances. A significant life change such as job loss directly affects financial situation, income, and risk capacity and is a textbook trigger for a KYC update. The passage of 12 months alone may prompt a periodic review under dealer policy but does not automatically trigger an update obligation independent of any change in the client's circumstances.

Related terms in Regulatory

AI case study

See how NI 31-103 Section 13.2 (KYC Content) applies in practice

One named-role scenario with realistic numbers and the rule citation.

Want this kind of explanation on every wrong answer?

The Ciroexam AI tutor is grounded in the same primary sources cited above. Every wrong practice answer gets the rule that the distractor was testing.

Take the free diagnosticSee pricing