7.9 Identification of Third Parties

You may have a client who acts for, or represents, a third party. In this case, you are required to comply with the Client Identification Rules in respect of the third party as well as the client. (Rules of the Law Society of Alberta, Rule 118.3(g)).

See the Law Society’s Client Identification & Verification Guidelines for further guidance.

If your client acts for or represents a third party, you must collect the same information about that third party as if they had retained you directly. The test for whether you must identify the third party depends on whether the third party is directing or instructing, or has authority to instruct or direct, as a principal instructs an agent.

A third party who has a beneficial interest but does not have authority to direct the client is not subject to the Client Identification Requirements.

The following are examples of third parties who are exempt:

  • Non-clients from whom funds may be received for the client’s or third party’s benefit
  • Non-clients to whom clients are transferring or paying funds
  • Minors, as they technically do not have the power or authority to instruct those acting on their behalf

It is important that you ascertain from your client at the time you are retained whether a third party is involved. Your client will likely not be aware of the Client Identification Requirements so it is up to you to ascertain the role of any third parties and to determine in respect of whom you must fulfill these requirements.

<7.8 Obtain and Record

7.10 Client Verification>

Last modified: Monday, 17 July 2017, 4:32 PM