Investment Mandate Agreement for Canada

Investment Mandate Agreement Template for Canada

A comprehensive legal agreement governed by Canadian federal and provincial laws that establishes the terms and conditions under which an investment manager will provide discretionary investment management services to a client. The document outlines investment objectives, strategies, restrictions, reporting requirements, and fiduciary responsibilities while ensuring compliance with Canadian securities regulations, including provincial Securities Acts and IIROC requirements. It establishes the framework for the ongoing investment management relationship, including fee structures, risk management protocols, and operational procedures.

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What is a Investment Mandate Agreement?

The Investment Mandate Agreement is a crucial document used when establishing a professional investment management relationship in the Canadian market. It serves as the primary contract between an investment manager and their client, whether institutional or individual, setting out the parameters within which the manager will invest the client's assets on a discretionary basis. The agreement must comply with Canadian federal and provincial securities laws, particularly the provincial Securities Acts, IIROC regulations, and relevant National Instruments. This document is essential for investment managers operating in Canada who need to formalize their authority to manage client assets, establish clear investment guidelines, and define reporting obligations and fee structures while ensuring regulatory compliance.

What sections should be included in a Investment Mandate Agreement?

1. Parties: Identification of the investment manager and the client, including full legal names and addresses

2. Background: Context of the agreement, including client's intention to appoint the investment manager

3. Definitions: Defined terms used throughout the agreement

4. Appointment and Authority: Formal appointment of the investment manager and scope of discretionary authority

5. Investment Objectives and Strategy: Agreed investment objectives, strategy, and any benchmarks

6. Investment Restrictions: Specific limitations on investments, including regulatory and client-specific restrictions

7. Fees and Expenses: Management fees, performance fees, and responsibility for expenses

8. Reporting and Valuation: Required reports, frequency, content, and valuation methodology

9. Standard of Care and Liability: Manager's duties, standard of care, and limitation of liability

10. Representations and Warranties: Statements of fact and promises by both parties

11. Confidentiality: Protection and handling of confidential information

12. Term and Termination: Duration of agreement and termination provisions

13. Governing Law and Jurisdiction: Applicable law and courts having jurisdiction

14. Notice Provisions: How formal notices must be given between parties

15. General Provisions: Boilerplate clauses including assignment, amendments, and severability

What sections are optional to include in a Investment Mandate Agreement?

1. Custody Arrangements: Include when third-party custody arrangements need to be specified

2. Proxy Voting: Include when delegation of proxy voting rights needs to be addressed

3. Securities Lending: Include when securities lending activities are contemplated

4. ESG Requirements: Include when environmental, social, and governance factors are part of the mandate

5. Sub-Advisory Arrangements: Include when sub-managers may be appointed

6. Foreign Investment Provisions: Include when foreign investments are contemplated

7. Soft Dollar Arrangements: Include when use of soft dollar arrangements needs to be addressed

8. Client-Specific Regulatory Requirements: Include when client is subject to specific regulatory regime (e.g., pension funds)

What schedules should be included in a Investment Mandate Agreement?

1. Investment Guidelines: Detailed investment guidelines including asset allocation, permitted investments, and restrictions

2. Fee Schedule: Detailed breakdown of fees, calculation methodologies, and payment terms

3. Authorized Persons: List of persons authorized to give instructions on behalf of the client

4. Reporting Requirements: Detailed specifications for reports, including format and content

5. Risk Disclosure Statement: Detailed disclosure of investment risks

6. Service Level Agreement: Detailed operational procedures and service standards

7. Compliance Requirements: Specific compliance procedures and requirements

8. Form of Reports: Templates for required reports and notifications

Authors

Alex Denne

Head of Growth (Open Source Law) @ Genie AI | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents | Serial Founder & Legal AI Author

Jurisdiction

Canada

Publisher

Genie AI

Cost

Free to use
Relevant legal definitions
Clauses
Relevant Industries

Financial Services

Investment Management

Banking

Insurance

Pension Fund Management

Wealth Management

Asset Management

Private Equity

Institutional Investment

Fund Administration

Relevant Teams

Legal

Compliance

Investment Management

Risk Management

Client Services

Operations

Portfolio Administration

Due Diligence

Treasury

Investment Strategy

Product Development

Investment Operations

Relevant Roles

Chief Investment Officer

Portfolio Manager

Investment Manager

Legal Counsel

Compliance Officer

Risk Manager

Investment Advisor

Relationship Manager

Fund Manager

Investment Operations Manager

Chief Financial Officer

Investment Analyst

Due Diligence Officer

Client Services Manager

Treasury Manager

Industries
Securities Act (Provincial): Provincial legislation (varies by province) that regulates securities trading, registration requirements for investment advisers, and disclosure obligations
Investment Industry Regulatory Organization of Canada (IIROC) Rules: Self-regulatory organization rules governing investment dealers and trading activity in debt and equity markets
Proceeds of Crime (Money Laundering) and Terrorist Financing Act: Federal legislation requiring financial institutions to implement anti-money laundering and know-your-client procedures
Personal Information Protection and Electronic Documents Act (PIPEDA): Federal privacy legislation governing the collection, use, and disclosure of personal information in commercial activities
National Instrument 31-103: Registration Requirements, Exemptions and Ongoing Registrant Obligations - Sets out the requirements for firms and individuals who trade securities or provide investment advice
National Instrument 45-106: Prospectus Exemptions - Relevant for private placement and exempt market dealings
Bank Act: Federal legislation governing banking operations and services in Canada, relevant if the investment mandate involves bank-owned investment managers
Provincial Contract Law: General contract law principles governing formation and enforcement of contracts in the relevant province
Pension Benefits Standards Act: Federal legislation governing pension fund investments, relevant if the mandate involves pension fund assets
Income Tax Act: Federal tax legislation affecting investment structures, reporting requirements, and tax implications of investment decisions
Teams

Employer, Employee, Start Date, Job Title, Department, Location, Probationary Period, Notice Period, Salary, Overtime, Vacation Pay, Statutory Holidays, Benefits, Bonus, Expenses, Working Hours, Rest Breaks,  Leaves of Absence, Confidentiality, Intellectual Property, Non-Solicitation, Non-Competition, Code of Conduct, Termination,  Severance Pay, Governing Law, Entire Agreemen

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