This term sheet (the “Term Sheet”) describes the general terms and conditions which will apply to and govern the relationship between the Financial Services Regulatory Authority of Ontario (“FSRA”) and the test and learn environment participant (“TLE Participant”) (collectively referred to as the “Parties” or individually as “Party”) throughout the term of the test and learn environment (“TLE”).This Term Sheet is not legally binding on the Parties and will not impose any obligations or liabilities. Any contractually binding relationship or the imposition of legal obligations and liabilities based on this Term Sheet will occur only if and when the Testing Agreement is agreed to and executed by the Parties.

  1. Indemnity:
 The TLE Participant will indemnify and hold FSRA harmless against any and all liabilities. Such an indemnity will apply whether or not there are one or more other causes or events that contribute concurrently or in any sequence to the occasioning of the loss or damage.
  1. Governing Law:
 The Testing Agreement will be governed by and construed in accordance with the laws of Ontario.
  1. Dispute Resolution:
 Any controversy, conflict or dispute of any nature arising out of or relating to the Testing Agreement or the TLE will be settled exclusively by a court of competent jurisdiction in Ontario.
  1. Nature of Relationship:
 The Testing Agreement will not create an employment, partnership or agency relationship between FSRA (or any of FSRA’s directors, officers, employees, agents or subcontractors) and the TLE Participant (or any of the TLE Participant’s directors, officers, employees, agents, partners, affiliates, volunteers or subcontractors).
  1. Assignment and Subcontracting:
 The TLE Participant will not subcontract or assign any part of the Testing Agreement or any specified deliverable in the Testing Agreement (“Specified Deliverable”) unless FSRA’s prior written consent is obtained.
  1. Identified Person:
 Any individual employed, or otherwise within the TLE Participant’s corporate structure who is identified as being responsible for providing a Specified Deliverable (“Identified Person”) in the Testing Agreement, will exclusively provide such Specified Deliverable and the TLE Participant will provide FSRA with prior written notice if an Identified Person is removed, replaced or departs from a designated role for any reason whatsoever. 
  1. FSRA’s General Access Rights:
 The TLE Participant will provide FSRA with sufficient, prompt and reasonable access to the TLE Participant’s physical premises, documents and electronic records in order to allow FSRA to determine if the TLE Participant is acting in a manner prejudicial to the public interest or failing to comply with the Testing Agreement. 
  1. TLE Participant’s Performance Covenants:

The TLE Participant will warrant, undertake and represent to FSRA that the TLE Participant’s performance throughout the TLE’s term will occur, and any Specified Deliverable will be provided, administered and completed, 

  1. in a full and diligent manner
  2. by persons suitably qualified and skilled in their occupations
  3. in accordance with common industry standards and applicable legal requirements
  1. FSRA Audit Rights:
 FSRA will have the right to promptly and thoroughly audit the TLE Participant’s performance in the TLE.
  1. Microsoft’s Standard Terms and Conditions:
 The TLE Participant will be required to agree to and comply with Microsoft’s standard terms and conditions for the use of Microsoft Teams.
  1. Document Retention:
 The TLE Participant will retain documentation for a period of time which FSRA, in its sole discretion, considers reasonable in the circumstances.
  1. Confidentiality and Personal Information:

The Testing Agreement will include confidentiality provisions which reflect the confidentiality agreement (the “Confidentiality Agreement”) entered into between the Parties, which will include that:

 

The TLE Participant will handle personal information and maintain the confidentiality of any confidential information in accordance with conditions prescribed by FSRA and applicable legal requirements, including but not limited to privacy laws.  

 

In the event that a Party receives notice, including any court order or subpoena, indicating that it may or will be legally required to disclose any confidential information, it will provide the other Party with prompt notice, provided it can legally do so, and the Party may then, at its own expense, seek a protective order or other appropriate remedy.  

 

A “notice” referred to above will include a request made to FSRA pursuant to the Freedom of Information and Protection of Privacy Act to disclose information to a third party which if honored would include confidential information.

 

Confidential information shall mean all non-public information disclosed in relation to the TLE, whether written or oral, that is designated as confidential or that, given the nature of the information or the circumstances surrounding its disclosure, reasonably should be considered as confidential. Confidential information shall not include such information if it: 

  1. becomes known by the receiving Party other than through disclosure by the disclosing Party
  2. is or hereafter becomes, through no action of the receiving Party, generally known to or accessible by the public
  3. corresponds in substance to information furnished to the receiving Party on a non-confidential basis by any third party, which to the receiving Party’s knowledge, has a lawful right to do so or corresponds to information furnished by the receiving Party on a non-confidential basis to any such third party
  1. Information Technology (“IT”) Security and Customer Data Safeguards:
 If the TLE Participant has inadequate policies, procedures and processes with respect to IT security and protecting customer data, then the TLE Participant will need to promptly and accurately develop, maintain and implement sufficient IT security and customer data safeguards which are to FSRA’s satisfaction.
  1. IT Security and Third-Party Data Auditing:

FSRA will reserve the right to require the TLE Participant to retain, at its own cost and expense, a mutually agreed upon third party for a sufficient period of time in order to allow such a party to audit, identify and remedy any deficiencies in the TLE Participant’s policies, procedures and processes with respect to IT security and protecting third party data.

 

Alternatively, FSRA may accept a suitable audit certification from the TLE Participant which must be acceptable to FSRA in light of the TLE’s nature, size, complexity, operations and risk profile.
  1. Injunctive Relief and Remedies:

FSRA will reserve the right to obtain any type of relief, including but not limited to injunctive relief, to remedy any actual or potential violation of the Testing Agreement by the TLE Participant. 

 

The TLE Participant will acknowledge and agree that monetary damages may not be a sufficient remedy for any breach of the Testing Agreement by the TLE Participant and in addition to all other remedies FSRA may be entitled to, FSRA will be entitled without proof of actual damages to seek specific performance and injunctive or other equitable relief as a remedy for any such breach or threatened breach without the requirement for the securing or posting of any bond or other security. 

 

The TLE Participant will agree that it will not oppose the granting of any relief on the basis that FSRA has an adequate remedy at law, and the TLE Participant will pay any costs, fees and expenses, including but not limited to legal fees, that FSRA may incur in enforcing the Testing Agreement.
  1. TLE Participant’s Insurance:
 The TLE Participant will purchase, maintain and put into effect, at its own cost and expense, an insurance policy which addresses any risk with respect to consumer harm and in a form and on such terms which are acceptable to FSRA.
  1. Termination by FSRA:

Upon FSRA providing notice in writing to the TLE Participant, FSRA will reserve the right to terminate the TLE Participant’s participation in the TLE if a TLE Participant,

  1. violates any provision of the Confidentiality Agreement or Testing Agreement
  2. makes a misrepresentation of any kind to any party, person or individual with respect to any matter arising out of or relating to the TLE Participant’s participation in the TLE
  3. fails to implement, develop, and maintain comprehensive, reasonable and sufficient consumer safeguards (“TLE Safeguards”)
  4. substantially fails to perform any part of the Testing Agreement or a Specified Deliverable
  5. subcontracts or assigns any part of the Testing Agreement or a Specified Deliverable without FSRA’s prior written consent
  6. violates any statute, regulation or applicable legal requirement
  7. fails to adhere to FSRA’s instructions or any provision of a mutually agreed upon written exit strategy (the “Exit Strategy”) in any manner whatsoever
  8. fails to act in good faith
  1. Termination by TLE Participant:
 The TLE Participant may terminate the Testing Agreement and exit the TLE upon providing FSRA with 30 days prior notice in writing.
  1. Non-Disparagement:
 Throughout the TLE Participant’s participation in a TLE and subsequent to a TLE’s conclusion or termination, a TLE Participant shall not disparage FSRA or its directors, officers, employees or agents for any reason whatsoever related to the TLE.
  1. Preservation of Consumer Safeguards:

Upon a TLE’s conclusion or termination for any reason whatsoever, 

  1. the TLE Participant must continue to implement and maintain all TLE Safeguards for a period of time which FSRA, in its sole discretion, considers reasonable in the circumstances, which period shall not be shorter than a time period to be determined by FSRA; and 
  2. if consumers can no longer be effectively served pursuant to the Proposed Innovation, FSRA will supervise and oversee the TLE Participant’s transfer or migration of impacted consumers to a substantially similar service which FSRA, in its sole discretion, considers reasonable and suitable in the circumstances.
  1. Survival:

Upon a TLE’s conclusion or termination for any reason whatsoever, the following rights and obligations in the Testing Agreement will survive indefinitely,

1. Indemnity
2. Governing Law
3. Dispute Resolution
7. FSRA’s General Access Rights
9. FSRA Audit Rights
11. Document Retention
12. Confidentiality and Personal Information
15. Injunctive Relief and Remedies
19. Non-Disparagement
27. Intellectual Property (“IP”)
30. No Waiver
31. FSRA Feedback
33. TLE Related Communications

 

Upon a TLE’s conclusion or termination for any reason whatsoever, the following rights and obligations in the Testing Agreement will survive until the date there are no consumers impacted by the TLE Participant’s participation in the TLE or the Proposed Innovation,  

13. Information Technology (“IT”) Security and Customer Data Safeguards
14. IT Security and Third-Party Data Auditing
16. TLE Participant’s Insurance
20. Preservation of Consumer Safeguards
22. TLE Safeguards
24. Exit Strategy
25. Status TLE- Specific Exit Strategy Requirements
26. Third Party Commitments and Oversight
  1. TLE Safeguards:

The TLE Participant will develop, implement and maintain sufficient, comprehensive and adequate TLE Safeguards proportionate to the TLE’s nature, size, complexity, operations and risk profile, which will include but will not be limited to, 

  1. formal reporting requirements to both FSRA and consumers
  2. mandatory disclosures to applicable third parties
  3. limiting consumer type and quantity
  4. limiting transactional volume and type
  5. establishing policies, processes and procedures to identify, mitigate and resolve any risks arising out of or relating to the Proposed Innovation
  6. maintaining a consumer complaint log on the TLE Participant’s website to clearly and transparently publish consumer complaints arising out of or relating to the Proposed Innovation
  1. General:
 Any rights and obligations under the Testing Agreement will exclusively apply to the TLE Participant and FSRA.
  1. Exit Strategy:

A TLE Participant will develop, implement and adhere to an Exit Strategy containing terms and conditions to FSRA’s satisfaction, and the Exit Strategy will include but will not be limited to, 

  1. a written explanation of how the Proposed Innovation will be deployed to the broader market subsequent to a TLE’s conclusion
  2. a written explanation of how the TLE Participant will protect consumers from any adverse or detrimental impact arising out of or relating to discontinuing TLE testing
  3. a final report on the outcome of the testing phase and any material lessons learned by the TLE Participant
  1. Status TLE- Specific Exit Strategy Requirements:

With respect to a Status TLE, the TLE Participant’s Exit Strategy must include a comprehensive written explanation as to why the TLE Participant intends to select one of the following strategies, 

  1. becoming duly licensed with FSRA
  2. modifying the manner in which the Proposed Innovation is provided such that the TLE Participant does not need to be licensed with FSRA
  3. discontinuing the Proposed Innovation
     
  1. Third Party Commitments and Oversight:

The TLE Participant will comply with the terms and conditions of third-party agreements and the rights and obligations of the TLE Participant pursuant to such agreements will remain in full force and effect until there are no outstanding rights and obligations arising out of or relating to a Proposed Innovation.  

 

The TLE Participant will develop, implement and maintain policies, processes and procedures which are sufficient to allow FSRA to oversee and monitor a TLE Participant’s communications and business engagements with any third party whose rights and obligations with respect to the TLE Participant are directly or indirectly impacted by the Proposed Innovation.
  1. Intellectual Property (“IP”):

FSRA will not claim any IP ownership in the Proposed Innovation and the Parties will own and retain all rights, title and interest in and to their respective IP.

 

FSRA will not be granted any licenses, covenants or other IP rights by the TLE Participant, other than a royalty free and non-exclusive license to the applicable IP of the TLE Participant which is reasonably necessary to allow FSRA to exercise its rights and obligations arising out of or relating to the Testing Agreement.
  1. TLE Participant’s Representations and Warranties:

The TLE Participant’s representations and warranties  will include but will not be limited to the TLE Participant, 

  1. possessing and maintaining sufficient rights and powers to enter into and perform in the TLE and under the Testing Agreement
  2. adhering to the terms and conditions of any third-party agreement or obligation
  3. satisfying eligibility requirements prescribed by FSRA throughout the TLE’s term
  4. being solely responsible for any and all claims, liabilities and damages arising out of or relating to the provision, administration and completion of the Proposed Innovation
  5. not relying on any prior negotiations, understandings, representations, warranties or agreements between the Parties with respect to the Testing Agreement’s subject matter
  6. assuming all direct and indirect risks arising out of or relating to the implementation of feedback provided by FSRA
  7. not claiming against FSRA any rights and obligations on the basis of any type of estoppel, including regulatory estoppel
  1. No Representations and Warranties by FSRA:
 FSRA will not make representations and warranties of any kind.
  1. No Waiver:

Any failure by the Parties to enforce any provision of the Testing Agreement will not be deemed a waiver of future enforcement of that or any other provision. 

 

Any partial or whole waiver or relaxation of any term or condition in the Testing Agreement will be valid only if communicated by the Parties in writing as a waiver or relaxation.
  1. FSRA Feedback:

Any feedback provided by FSRA to the TLE Participant will be solely with respect to the Proposed Innovation and provided on a without prejudice basis to any regulatory decision or action which FSRA may take in the future.  

 

Any feedback provided by FSRA to the TLE Participant will not constitute a comprehensive, complete and accurate examination or identification of all material risks or deficiencies with respect to the Proposed Innovation.
  1. Term:
 The TLE Participant’s participation in the TLE will terminate upon the expiry of the agreed upon term set out in an exemption order.
  1. TLE Related Communications:

FSRA will publish that the TLE Participant is participating in the TLE on its website, in conjunction with a description of the Proposed Innovation. 

 

FSRA’s prior written consent will be required if the TLE Participant intends to communicate to any third party that FSRA has approved, endorsed or otherwise accepted the Proposed Innovation. 

 

Subsequent to a TLE’s successful conclusion, FSRA will reserve the right in its sole discretion to publish a communication encouraging licensees and non-licensees operating in a regulated sector to implement learnings arising out of or relating to the Proposed Innovation.