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Canadian Securities Regulatory Monitor News and Insight

Category Archives: Advisors

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Targeted Reforms Update – Most regulators abandon the “Best Interest Standard” but propose to proceed with refined “Targeted Reforms”

Posted in Advisors, Amendments, Broker-Dealers, Compliance and Supervision, CSA, IIROC, Industry News, MFDA, OSC, Registrants

The Canadian Securities Administrators (CSA) issued CSA Staff Notice 33-319 (the Notice) to provide an update on the “Best Interest Standard” and “Targeted Reforms” proposed last year in an important CSA Consultation Paper that we discussed in a previous post.

Most regulators have decided to abandon the Best Interest Standard which would have introduced a “client best interest” standard against which all registrant-client obligations would be interpreted.

The CSA will still proceed with a refined set of Targeted Reforms. Even in the absence of a Best Interest Standard in most jurisdictions, the Targeted Reforms would nonetheless … Continue Reading

CSA Sets Out Priorities for 2016-2019

Posted in Advisors, Broker-Dealers, Compliance and Supervision, Continuous and Timely Disclosure, CSA, Enforcement, Exempt Market Dealers, Investment Funds, Mutual Funds, Registrants

The Canadian Securities Administrators (CSA) published on July 7, 2016 their priorities for the three-year period 2016 to 2019 under four categories: “Enhanced Investor Protection”, “Fair and Efficient Markets and Reduction of Risks to Market Integrity”, “Enhancement of Enforcement Effectiveness” and “Enhancement of Information Technology”.

The CSA states its strategic objectives without once mentioning the possible impact on it of the proposed national Cooperative Capital Markets Regulatory Authority (CCMRA) some of its members support. On July 22, it was announced that the CCMRA is expected to be operational in 2018.

Enhanced Investor Protection

The CSA proposes to … Continue Reading

Les propositions des ACVM concernant les personnes inscrites ont des effets très importants sur les courtiers et les conseillers au Canada

Posted in Advisors, Amendments, Broker-Dealers, Compliance and Supervision, CSA, IIROC, Industry News, MFDA, Registrants, Requests for Comment

Les Autorités canadiennes en valeurs mobilières (les ACVM) ont publié un important document de consultation dans lequel il est proposé de rehausser considérablement les obligations de tous les conseillers, courtiers et représentants, y compris les membres de l’OCRCVM et de l’ACFM (les personnes inscrites). Les commentaires sur ce document de consultation peuvent être présentés jusqu’au 26 août.… Continue Reading

CSA Registrant Proposals Have Far-Reaching Effects on Dealers and Advisers in Canada

Posted in Advisors, Amendments, Broker-Dealers, Compliance and Supervision, CSA, IIROC, Industry News, MFDA, Registrants, Requests for Comment

Recently, the Canadian Securities Administrators (CSA) released an important Consultation Paper that proposes to significantly increase the obligations of all advisers, dealers and representatives, including IIROC and MFDA members (Registrants). Comments on the Consultation Paper can be made until August 26.

The CSA is proposing two distinct categories of changes that, if adopted, will significantly impact the economics of existing Registrant business models and Registrant compliance costs:

1. Best Interest Standard: A “client best interest” standard against which all Registrant-client obligations would be interpreted.

2. “Targeted Reforms”: A comprehensive set of so-called “targeted reforms” will affect … Continue Reading

OSC Sets Out Priorities for 2016-2017

Posted in Advisors, Broker-Dealers, Compliance and Supervision, Enforcement, Exempt Market Dealers, Mutual Funds, OSC, Registrants

The Ontario Securities Commission (OSC) released its draft Statement of Priorities for 2016-2017. The comment period ends May 9th.

Investor Protection Priorities

Advance Best Interest Standard – The OSC will recommend and conduct consultations on regulatory provisions to create a “best interest” standard for advisors. This standard is controversial for some industry participants but the OSC is committed to it. The OSC will also  continue to focus on advisor compensation practices and identify those that are inconsistent with a “best interest” standard.

Compensation Arrangements in Mutual Funds – The OSC will regulate embedded commissions and … Continue Reading

Le glossaire

Posted in Advisors, Compliance and Supervision, Conformité et supervision, Conseillers en placement, IIROC, OCRCVM

De plus en plus, les clients ont des attentes marquées et précises à l’égard de leur conseiller.

Entre autres, on s’attend du conseiller qu’il soit professionnel, compétent et qu’il respecte les plus hautes normes d’éthique.

L’OCRCVM, en mettant de l’avant le modèle de relation client-conseiller, a tracé la voie sur l’importance et la priorité du client, la transparence dont doivent faire preuve les firmes et la divulgation claire des conflits d’intérêts.

On constate également que depuis plusieurs années, les produits et services financiers sont nombreux. Certains produits sont opaques et leur structure complexe. Un client peut facilement s’y perdre ou … Continue Reading

L’éthique toujours au rendez-vous*

Posted in Advisors, Compliance and Supervision, Conformité et supervision, Conseillers en placement

« Quand vous cherchez des gens à recruter, vous devez rechercher trois qualités : l’intégrité, l’intelligence et l’énergie. Et s’ils ne possèdent pas la première, les deux autres vous tueront. »

Warren Buffet

L’intégrité et l’éthique sont des manières d’agir. Dans le secteur financier et le domaine des valeurs mobilières, ces manières d’agir prennent un rôle clé puisqu’elles inspirent la confiance, une notion qui est au cœur de la relation avec son client.

Plusieurs firmes ont mis en place des codes d’éthique et demandent à leurs conseillers et employés de prendre connaissance du code d’éthique et d’attester qu’ils l’ont lu … Continue Reading

Le “Book of Business”: quelle en est la réelle valeur?*

Posted in Advisors, Conseillers en placement, Jurisprudence, Litigation

Il est courant pour un conseiller en placement d’acquérir le droit de desservir certains clients par le biais ce qui est communément appelé dans l’industrie un « book », et ce pour plusieurs milliers de dollars. Lors d’une telle acquisition d’un book, la transaction peut donner l’impression que le courtier en placement en devient propriétaire et que le book possède une valeur tangible. Plusieurs questions peuvent se poser afin de déterminer la valeur de ce book, par exemple, en cas de divorce.

Dans le cadre d’une décision récente de la Cour supérieure[1], l’honorable Robert Mongeon, dans … Continue Reading

Registration Exemption Available for Southbound Advice of SEC-Registered Advisers Based in Ontario

Posted in Advisors, OSC, Portfolio Managers, Registration, SEC

The Ontario Securities Commission (OSC) has recently granted a five year exemption from Ontario registration requirements to an SEC-registered adviser operating from Ontario with an exclusively US client base. Kalenjin Advisory Ltd. (Kalenjin) and its Ontario-resident advising representative provide securities advice exclusively to high net worth individuals resident in the United States with respect to securities traded on trading venues outside of Canada (Foreign Securities).

Citing a supervisory memorandum of understanding with the SEC, the OSC exempted Kalenjin and its advising representative from this registration requirement, provided that Kalenjin and its representatives remain appropriately … Continue Reading

OSC Policing Non-Resident Trading and Advising Activities

Posted in Advisors, Autorités canadiennes en valeurs mobilières, Enforcement, Industry News, OSC, Registration

Recently, a foreign bank settled a threatened enforcement action with the Ontario Securities Commission (OSC) based on allegations that the bank’s Toronto foreign bank representative office (FBRO) had engaged in trading and advising activities on behalf of Ontario residents without being registered or being able to rely on an exemption.  The FBRO admitted that its conduct was contrary to Ontario securities laws as well as the public interest, and agreed to make a $500,000 settlement payment to the OSC.

The OSC became aware of irregularities following a 2011 Compliance Review (the results of which are summarized … Continue Reading

L’investisseur a le devoir de dénoncer sans tarder le comportement blâmable de con conseiller en placement

Posted in Advisors, Enforcement, Securities Litigation

Dans son arrêt rendu dans l’affaire Succession Huppé c. Valeurs mobilières Banque Laurentienne, 2014 QCCA 294, la Cour d’appel confirme un jugement de la Cour supérieure rejetant l’action d’un investisseur contre son ancien conseiller en placement et sa maison de courtage au motif que l’investisseur avait trop tardé avant de dénoncer le comportement reproché à son conseiller, sur qui reposait sa réclamation pour les pertes subies à l’occasion de placements.… Continue Reading

Fiduciary Duty for Dealers: Upcoming CSA Panel Discussion

Posted in Advisors, Broker-Dealers, Compliance and Supervision, CSA

The CSA announced on Monday the discussion topics for its panel session on July 23, 2013 from 10:00 a.m. to 12:00 p.m. on the 22nd floor of the OSC’s offices, located at 20 Queen Street West, Toronto, Ontario. The session will be moderated by James E.A. Turner, Vice-Chair of the OSC.

The panel discussion will focus on the following two topics:

  1. Should dealers (and their representatives) be subject to a best interest standard when providing advice to retail clients? What would the consequences be of introducing such a standard?
  2. What other policy options could securities regulators consider in addition, or
Continue Reading

Canadian Regulators Mull Fiduciary Standard for Advisers and Dealers

Posted in Advisors, Broker-Dealers, Continuous and Timely Disclosure, CSA, Requests for Comment, Scholarship Plans

Introduction – A Matter of Investor Protection

The Canadian Securities Administrators (CSA) recently published Consultation Paper 33-403 (Paper) which invites comment on whether a statutory fiduciary duty should apply to registered advisers and dealers (collectively, Advisers). The comment period ends February 22, 2013.

Though undecided on the regulatory course ahead, the CSA appears to be amenable to the introduction of a qualified statutory fiduciary duty for Advisers.… Continue Reading

Canadian Securities Regulatory Requirements Applicable to Non-Resident Broker-Dealers, Advisers and Investment Fund Managers

Posted in Advisors, Broker-Dealers, CSA, Enforcement, Exempt Market Dealers, Investment Funds, Portfolio Managers, Registrants, Registration

The purpose of this paper is to provide a non-resident of Canada with an overview of the dealer registration, adviser registration, investment fund manager registration and prospectus requirements that should be considered and addressed by the non-resident before it begins to trade securities with, or provide investment advice to, any person or company located in Canada, or to act as an investment fund manager in Canada. All currency amounts that are referred to in this paper are denominated in Canadian dollars.

The Canadian Securities Regulatory Framework

Like the United States, Canada has a federal system of government whereby the authority … Continue Reading