If a brokerage is practicing designated agency, a designated agent must not disclose confidential information concerning a client to another licensee in the same brokerage (or another brokerage) who does not represent that same client. 

Any such disclosure by the designated agent would prevent the other licensee from acting as a designated agent on behalf of another person in a transaction involving the first client. For this reason, licensees who operate as teams and who therefore share confidential information concerning their clients are not able to act as the designated agent on behalf of another person in a transaction involving the first client.

Brokerages should adopt policies, procedures and enforcement mechanisms with respect to acceptable, effective information barriers to protect the confidential information of their clients. Such policies and procedures, which may already have been implemented as a result of PIPA, might include provisions to ensure that:

  • Licensees engaged by their brokerage to represent clients with conflicting interests do not communicate with or to their colleagues, directly or indirectly, intentionally or inadvertently, any confidential information.
  • The files of current and former clients, including computer files that contain confidential and private information of these clients, are specifically identified and secure from unauthorized access.
  • Individual licensees ensure that confidential client files in their possession are secure from unauthorized access.
  • Current and former client files, and any confidential information of those clients, are accessible only to the licensees who currently represent, or in the past represented, those particular clients, and those support personnel in the brokerage who are involved in providing services to or on behalf of those clients.
  • Information barrier policies and procedures address the access to confidential client information of administrative support personnel who work on files for multiple licensees within the brokerage.
  • Information barrier policies and procedures provide that confidential client documents and electronic files are disposed of in a manner that safeguards the client’s confidential information while complying with record retention requirements of RESA, and any other legislation that may relate to the services the brokerage provides.
  • Information barrier policies include the possible legal and employment-related ramifications on non-compliance.

A brokerage needs to take reasonable steps to ensure the employees and licensees engaged by the brokerage are aware of and understand all information barrier policies and procedures adopted by the brokerage, and those employees and licensees should acknowledge and agree to the brokerage’s information barriers policy and related procedures.

In preparing any information barrier policies and procedures brokerages might consider the following:

  • Sharing of information at office meetings
  • Office layouts (physical separation of licensees in an office)
  • Electronic and paper files (access, maintenance and destruction)
  • Contents of bulletin/sales boards
  • Use of support staff for multiple transactions from different licensees
  • Access to locked filing cabinets
  • Use and privacy of computer passwords
  • Telephone system (i.e. knowledge of voice mail passwords)
  • Email system (i.e. privacy of email passwords)
  • Fax machines (i.e. the ability of anyone in the brokerage to read something off the fax machine)
  • Personnel at the brokerage with whom the client may safely communicate
  • After sale relationships

The above list is not meant to be exhaustive, and brokerages are encouraged to develop information barriers, policies and procedures to address situations unique to their brokerage.

(excerpted from the Brokerage Standards Manual