PACs, SWPs, and AWDs: Pre-Authorized Contributions, Systematic Withdrawal Plans, and Automatic Withdrawal Decisions are scheduled transaction programs offered by mutual fund dealers.

PACs, SWPs, and AWDs

Pre-Authorized Contributions, Systematic Withdrawal Plans, and Automatic Withdrawal Decisions are scheduled transaction programs offered by mutual fund dealers.

Definition

A PAC (Pre-Authorized Contribution) automatically debits a client's bank account on a set schedule (weekly, bi-weekly, monthly) and purchases units of a designated fund. Dollar-cost averaging is the investor benefit: purchases occur across different price points over time. A SWP (Systematic Withdrawal Plan) automatically redeems a set dollar amount or number of units on a regular schedule and deposits proceeds to the client's bank account; it is common in retirement income planning. An AWD (Automatic Withdrawal Decision) is a related concept where the redemption trigger is tied to account-level criteria rather than a fixed schedule. All three are considered account-level instructions rather than individual trade recommendations, but they must be established consistent with the client's KYC profile and suitability determination. Any material change to the client's circumstances should prompt a review of whether existing PAC or SWP instructions remain appropriate.

Source

CIRO IDPC Rules; NI 31-103 suitability provisions; fund company documentation

Where this shows up on the CIRE

Outcome 3.4

Test yourself

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

1
A client opens a margin account and immediately requests a leveraged position equal to three times her net liquid assets. The registrant processes the order because the client signed the margin agreement and insists she understands the risks. Which statement best reflects the registrant's obligation?
Outcome 3.4 · click for answer
A.The registrant has no further obligation once the client has signed the margin agreement and acknowledged the risks.
B.The registrant must still assess whether the leveraged strategy is suitable for the client's KYC profile; client acknowledgment of risk does not discharge the suitability obligation.Correct
C.The suitability obligation is suspended for margin accounts because clients self-certify their understanding.
D.The obligation is fully discharged if the registrant provides a written risk disclosure document at account opening.
Signing a margin agreement and acknowledging risks transfers some responsibility to the client but does not extinguish the registrant's suitability obligation under NI 31-103 and CIRO rules. The registrant must still assess whether the leveraged strategy is appropriate given the client's financial situation, risk tolerance, and investment objectives. Suitability analysis applies to each order or recommendation, not only at account opening.
2
Under IDPC Rule 3206, which of the following must be included in the written relationship disclosure information provided to a new retail client?
Outcome 3.4 · click for answer
A.The full list of securities the dealer member is currently recommending.
B.The registrant's personal investment track record for the previous three years.
C.A description of the products, services, and account types available; the limitations on those products and services; charges and fee structures; how the account will operate; the suitability process; and the account reporting the client will receive.Correct
D.A signed legal waiver that the client has read and understood all CIRO rules.
IDPC Rule 3206 specifies the required content of the Relationship Disclosure Information: the products, services, and account types available at the firm; the limitations on those; the charges, fees, and compensation guidelines; how the account will operate under regulatory and firm-based rules; a description of how suitability is determined; and what account reporting the client will receive. It is a comprehensive onboarding document, not a legal waiver or a marketing piece. The registrant's personal track record is not a required element.

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