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Dec 16 2014

Clients Aren’t Anyone’s Property

Ugly legal fights sometimes break out when investment advisors decamp from one dealer and go to work at another. The advisor typically views his or her clients as a personal “book of business,” built up through hard effort, and thus an asset that rightfully should transfer with the advisor. But the dealer being left behind usually sees the matter quite differently. To the firm, customers are clients of the dealer, whose business the advisor was handsomely paid to develop and secure. Even a moderate exodus can prompt accusations that the advisor and new dealer conspired to illicitly harm the former dealer’s business. All sides quickly lawyer up and, within a day or two, they’re in court arguing about whether an injunction should be granted to prevent further solicitation of accounts…

Dec 09 2014

FAIR Canada Comments on the Governance and Legislative Framework of the Cooperative Capital Markets Regulatory System

FAIR Canada has provided comments to the jurisdictions participating in the Cooperative Capital Markets Regulatory System (“CCMR”) on the proposed governance and legislative framework for the CCMR. FAIR Canada welcomes efforts made by governments and regulators to improve and enhance cooperation with respect to securities regulation and capital markets in Canada. We urge governments and regulators to not lose focus on several important investor-focused initiatives that are currently underway – namely, the mutual fund fees and statutory best interest standard initiatives…

Nov 28 2014

Review of Proficiency Framework Warranted

FAIR Canada’s comments on IIROC’s recent proficiency assurance consultation focus on the need to reevaluate the current proficiency framework. As we point out in our submission, the current proficiency framework was designed, many decades ago, around the sales process, for salespeople. The educational and professional standards for registrants are structured around the particular products representatives are permitted to sell…

Nov 28 2014

Comments on IIROC’s Phase 2 of the Client Relationship Model

FAIR Canada provided comments to the Investment Industry Regulatory Organization of Canada in favour of the proposed amendment contained in the IIROC 2015 and 2016 CRM2 Amendments which will result in investors being provided with more complete information than in the previous IIROC proposed amendment. If the dealer or adviser is the dealer or adviser of record for the client…

Nov 28 2014

Asset Backed Securities Must Retain Risk

FAIR Canada has urged the Canadian Securities Administrators to require retention of risk in securitization as well as stressed the need for transparency and detailed, complete and accurate information about asset-backed securities. It is essential that investors have the information they require to assess the level of risk. In the United States, federal regulatory agencies responsible for implementing regulations under The Dodd-Frank Wall Street Reform and Consumer Protection Act have finalized rules for risk retention requirements in asset-backed securities transactions. FAIR Canada recommends that the CSA do the same…

Nov 10 2014

What needs to be said about what not to say

At long last, we’re reaching implementation of the regulatory initiative known as CRM2 (shorthand for the second phase of the client relationship model). Once it kicks in fully in July 2016, investment firms will have to give clients clear and straightforward information about how their investments are performing and how much they’re paying for the service their advisors provide. In a word, CRM2 is all about transparency. Getting to this point hasn’t been easy. Progress has been slowed by the investment industry’s deep worry that CRM2 may cause seismic upheaval when investors are shown the full cost of products they’ve been sold and…

Nov 05 2014

Does Disclosure Work?

FAIR Canada and Rotman School of Management’s Capital Markets Institute hosted a successful conference on October 28, 2014 entitled “Does Disclosure Work?”. Following a keynote address from Susan Wolburgh Jenah, subject-matter experts Christopher Nicholls , Dilip Soman, and Sunita Sah each presented formally on their area of expertise to set the context for the day’s discussion. Christopher Nicholls…

Oct 29 2014

FAIR Canada Announces Corporate Donations

The Canadian Foundation for Advancement of Investor Rights (FAIR Canada) today announced that Manulife Financial Corporation has committed to provide FAIR Canada with a donation in the amount of $300,000 payable over the next three years. In accordance with FAIR Canada’s corporate donation acceptance policy and at Manulife’s request, the donation is being made entirely on an arms’ length basis and without conditions….

Oct 24 2014

FAIR Canada Releases Accountability Report

We are pleased to present FAIR Canada’s Accountability Report Jan 2012 – Jun 2014. This report covers our activities from January 2012 through June 2014, picking up where our first accountability report left off. The report provides an overview of FAIR Canada’s mission, the need for a retail investor representative in securities regulation, our strategic priories for the next three years, and a summary of our activities. It also includes information about our notable initiatives, organizational milestones and governance, as well as financial information…

Oct 17 2014

SEC’s Investor Advisory Committee Backs Reform of Accredited Investor Definition

The U.S. Securities and Exchange Commission’s (SEC) Investor Advisory Committee recently made recommendations relating to the accredited investor (AI) definition. The Investor Advisory Committee noted that it expects that a closer analysis will reveal that “a significant percentage of individuals who currently qualify as accredited investors are not in fact capable of protecting their own interests…”, noting that “the current definition is, at best, a highly imperfect proxy for financial sophistication and access to information.” The SEC is…

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